RATING RATIONALE
30 Jul 2021
Glassco Laboratory Equipments Pvt. Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.16.03 Crs. of Glassco Laboratory Equipments Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Packing Credit in Foreign Currency (PCFC) Sanctioned | 16.00 | Short Term | BWR A3 |
| Sub Total | 16.00 | ||
| Non-Fund Based | |||
| Credit Exposure Limit (CEL) Sanctioned | 00.03 | Short Term | BWR A3 |
| Sub Total | 00.03 | ||
| Grand Total | 16.03 | (Rupees Sixteen Crores and Three lakhs Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK :
BWR has assigned the rating as “BWR A3'' Equivalent to BBB- for the bank loan facilities of Glassco Laboratories Equipments Pvt. Ltd.
The rating draws strength from experienced partners & Moderate Financial Risk Profile. However, the rating is constrained on account of High Competition in the Industry and Raw Material Availability and price risk.
BWR believes that Glassco Laboratories Equipments Pvt. Ltd. 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 any deterioration in financial risk profile.
Credit Strengths:
Experienced Partners: The firm has 2 partners. Mr. Sameer Jain and Mrs. Manisha Jain, both partners are postgraduates and have more than 2 decades of experience in the same line of business. Mr. Sameer Jain is the MD of the firm and Mrs. Manisha Jain manages the marketing of the firm. They have a considerable track record in the industry which has resulted in long-term relationships with customers and suppliers.
Moderate Financial risk profile: The revenue of the firm in FY20(A) is INR 81.69 crores as against INR 93.14 crores in FY19(A). The company has achieved revenue of INR 93.89 crores in FY21 (P). Tangible Net Worth is at INR 68.46 Crores in FY20(A), which improved from the previous INR 62.31 Crores in FY19(A). Net profit Margin/Operating Profit Margin at 16.86%/28.43% in FY19(A) has deteriorated to 7.54%/15.86% in FY20(A). The debt-equity ratio was at 0.20x in FY20(A) which has improved from the previous 0.21x in FY19(A). ISCR/DSCR is at 17.034X/10.77X in FY20(A) which has deteriorated from the previous 45.70/25.93 in FY19(A). The current ratio is at 3.23X in FY20(A) which has deteriorated from the previous 3.49X in FY19(A).
Credit Weakness:
High Competition in the industry: Entity exports in more than 70 countries due to which it faces competition from larger and well-established players in the industry.
Raw material availability and price risk: Company is dependent on China and the Chezch Republic for procurement of glass which is the key ingredient. Other raw materials are sourced from distant parts of India. Thus continuous availability of raw materials at affordable prices is a key business risk.
ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA
For arriving 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).
RATING SENSITIVITIES
Going forward, the ability of the firm to improve its financial risk profile and maintaining top-line & bottom-line will remain the key rating sensitivities.
Positive: The rating may be upgraded if the firm inter alia, is able to improve its top-line and its operating margins, or on account of any other favorable factor.
Negative: The rating may be downgraded if the firm inter alia, there is any deterioration in financial risk profile, fails to maintain adequate liquidity or on account of any unforeseen unfavourable events.
The company has two group companies Glassco Laboratories Instruments and DAN Logitech instruments Pvt. Ltd. Glassco Laboratories Equipments Pvt. Ltd. has receivables of INR 0.19 crores on both the companies. The company has Cash & Bank balances of Rs. 2.86 Crs in FY20(A) and INR 17.72 crores in FY21(P). Long Term Borrowings of INR 0.66 Crores in FY20(A) include Vehicle loan from Daimler financial services of INR 0.25 crores and Vehicle loan from HDFC Bank of INR 0.41 crores. The cash flow statement has not been submitted by the company. Long Term Borrowings in FY21(P) is INR 1.16 crores. Cash flow statement has not provided by the client for FY21(P). Average PCFC utilization of the Last 6 Months comes out to be ~61.70%. The current ratio is 3.23x in FY20(A). ISCR and DSCR are at 17.03x and 10.77x respectively in FY20(A). The conversion cycle is of 237 days in FY20(A).
The overall liquidity of the firm is Strong.
PROFILEGlassco Laboratory Equipments Pvt. Ltd. situated and set up in Ambala, Haryana, is a glass products manufacturing company. The company is managed and run by Mr. Sameer Jain and Ms. Manisha Jain who have more than 2 decades of experience in the same line of business. The company mainly indulges in manufacturing of glass products such as VOLUMETRIC GLASSWARE, JOINTED GLASSWARE, FILTRATION PRODUCTS, GENERAL GLASSWARE which are used in medical industries. The company is a 100% EXPORT ORIENTED UNIT and only manufactures and exports GLASSWARE to nearly 70 countries including Europe, USA, Japan, Africa and others.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 81.69 | 93.14 |
| EBITDA | Rs.Crs. | 12.96 | 26.48 |
| PAT | Rs.Crs. | 6.16 | 15.70 |
| Tangible Net Worth | Rs.Crs. | 68.46 | 62.31 |
| Total Debt/Tangible Net Worth | Times | 0.20 | 0.21 |
| Current Ratio | Times | 3.23 | 3.49 |
NON-COOPERATION WITH PREVIOUS RATING AGENCY ,IF ANY
| CRA Name | Date | Amount | Rating |
|---|---|---|---|
| CARE | 03 Apr 2020 | 20.00 | CARE A3 |
| CARE | 24 Sep 2020 | 20.00 | CARE A4+ |
| CARE | 03 Jun 2021 | 20.00 | Withdrawal |
| S.No | Current Rating (2021) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2020 | 2019 | 2018 | ||||
| Fund Based | ||||||||||
| 1 | Packing Credit in Foreign Currency (PCFC) - Sanctioned | Short Term | 16.00 | BWR A3 | NA | NA | NA | |||
| Non-Fund Based | ||||||||||
| 2 | Credit Exposure Limit (CEL) - Sanctioned | Short Term | 00.03 | BWR A3 | NA | NA | NA | |||
| Total | 16.03 | (Rupees Sixteen Crores and Three lakhs Only) | ||||||||
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 : For More Information Contact:| Analytical Contacts | |
|---|---|
|
Vishesh Phogaat Lead Analyst vishesh.p@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings B : +91 11 2341 2232 kukreja.vk@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|---|
| 1 | State Bank Of India (SBI) | Packing Credit in Foreign Currency (PCFC)Sanctioned | _ | 16.00 | 16.00 |
| 2 | State Bank Of India (SBI) | Credit Exposure Limit (CEL)Sanctioned | _ | 0.03 | 0.03 |
| Total | 0.00 | 16.03 | 16.03 | ||
| TOTAL (Rupees Sixteen Crores and Three lakhs Only) | |||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
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