The Globe Radio Co.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.10 Crs. of The Globe Radio Co.

Particulars

Facilities**	Amount(Rs.Crs)	Tenure	Rating*
Fund Based	2.10	Long Term	BWR BB - (Pronounced as BWR Double B minus) (Outlook: Stable)
Non-Fund Based	5.00	Short Term	BWR A4 (Pronounced as BWR A Four )
Total	7.10	(Rupees Seven Crores and Ten lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I
Note: The firm has been rated by BWR under MSE ratings as 'MSE 4' dated 25th April 2019 RATING ACTION / OUTLOOK : Stable

BWR believes the The Globe Radio Co. business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive'in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures

KEY RATING DRIVERS

BWR has essentially relied upon the audited financial statements of The Globe Radio Co. from FY16 to FY18 and projected financial statements of FY19 and FY20, publicly available information and information / clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the partners, established track of operations and moderate financial risk profile. However, the rating is constrained by the moderate scale of operations, constitution of the firm and liquidity position.

Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be the key rating sensitivities

Strengths

• Experienced Management The firm was established since 1965.
• Customer/ supplier relationship The firm has maintained good relationship with its suppliers and customers. Their top five suppliers and customers are doing business with them for at least 10 years.
• Revenue from Operations The firm's revenue from operations has grown by 194.07% in the FY18 vis-à-vis FY17
• Debt Protection Metrics DSCR and ISCR of the firm stand at 2.18 and 2.87 respectively in FY18 indicating firm’s financial ability to meet its debt obligations

Weakness

• Liquidity position The current ratio for FY18 stands at 1.10, which is below par. This indicates a stressed liquidity position.
• Constitution Withdrawal of capital by the partners for any personal contingency would adversely affect the capital structure of the firm.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For ariving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

LIQUIDITY POSITION

The current ratio of the firm stands at 1.10 times in FY18, which is below par and is estimated to increase to 1.68 in FY19. This shows a stressed liquidity position. 

PROFILE

Globe Radio Company are the manufacturers of machinery for making paper pulp, paper, paper board and articles of paper board. They design and manufacture diverse machinery including paper mill finishing house equipments mainly Slitter Rewinders.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 17-18	FY 16-17
Operating Revenue	Rs.Crs	31.80	10.81
EBITDA	Rs.Crs	4.49	2.17
PAT	Rs.Crs	1.88	0.08
Tangible Net Worth	Rs.Crs	10.62	8.14
Total Debt/Tangible Net Worth	Times	0.18	0.52
Current Ratio	Times	1.10	1.00

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
1	Fund Based	Long Term	2.10	BWR BB- (Pronounced as BWR Double B minus) (Outlook: Stable)	NA	NA	NA
2	Non-Fund Based	Short Term	5.00	BWR A4 (Pronounced as BWR A Four )	NA	NA	NA
Total			07.10	(Rupees Seven Crores and Ten lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf Investors queries can be sent to info@brickworkratings.com.

Hyperlink/Reference to applicable Criteria :

• General Criteria
• Approach to Financial Ratios
• Manufacturing Companies

For More Information Contact:

Analytical Contacts	Investor Contacts
Priyanka RS priyanka.rs@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
R Varadarajan Associate Director-Ratings varadarajan.r@brickworkratings.com
1-860-425-2742

SL.No.	Name of the Bank	Long Term(Rs.Crs)		Short Term(Rs.Crs)	Total(Rs.Crs)
		CC	TL
1	Central Bank Of India	2.1	0	5	7.1
	TOTAL (Rupees Seven Crores and One lakhs Only)	2.1	0	5	7.1

Note: The firm has been rated by BWR under MSE ratings as 'MSE 4' dated 25th April 2019