Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.30.77 Crs. of Autotech Nonwovens Pvt. Ltd.
ParticularsFacility** | Amount (Rs.Crs) | Tenure | Rating* |
---|---|---|---|
Fund Based | |||
Term Loan
Sanctioned
Term Loan Sanctioned Cash Credit Sanctioned Cash Credit Sanctioned Covid -19 Emergency Line Credit Sanctioned |
02.20
11.10 05.00 07.50 00.47 |
Long Term | BWR BB - (Stable) |
Sub Total | 26.27 | ||
Non-Fund Based | |||
Bank Guarantee
Sanctioned
Letter of Credit Sanctioned |
02.00
02.50 |
Short Term | BWR A4 |
Sub Total | 04.50 | ||
Grand Total | 30.77 | (Rupees Thirty Crores and Seventy Seven lakhs Only) |
BWR believes that Autotech Nonwovens 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 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 Autotech Nonwovens Pvt. Ltd. of FY18, FY19, FY20, and provisional financial (CA certified) statements of FY21, and Projected financial of FY22, publicly available information and information/clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the director/s, established track of operations, and above-average financial risk profile. However, the rating is constrained by the scale of operations, constitution of the company and high competition from other established players in the market.
Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities
Strength:
The promoters, Mr. Ankit Desai and Mr. Nitin Shah, have a combined experience of more than four decades in the industry. The Company's quality-focused approach has resulted in a strong relationship with customers and suppliers with the company obtaining the industry gold standard of IATF 16949:2016 certification by TUV Nord.
Moreover, the promoters have extended funding support and are expected to continue to do so over the medium term, whenever required.
Though the technical textile industry is currently at a nascent stage, the products have a wide range of niche application in industries ranging from agriculture and hygiene to defense, the industry is therefore likely to grow at a healthy rate going forward, especially in the light of the spread of COVID-19 in the medium term, with increasing demand for the non-woven spun-bond fabric for the production of Personal Protective Equipments (PPE): gowns, masks, etc. The higher demand is expected to continue going forward as precautionary hygiene and healthcare practices are expected to
prevail.
Weaknesses:
Operations are working capital intensive with gross current assets (GCA) at 227 days, driven by inventory days at 149days and debtors at 78 days estimated as of March 31, 2021. GCA over the past 3 years has been in the range of 200-250days.
The financial risk profile is average with a moderate net worth at Rs 11.23 crore Debt protection metrics are moderate with net cash accrual to adjusted debt at 1.21 time and interest coverage at 2.28 times estimated for fiscal 2021.
The Indian technical textile industry, though having high growth potential, is highly competitive and fragmented because of the low capital and technology requirements, small gestation period, and availability of raw materials leading to low entry barriers.
KEY FINANCIAL INDICATORS:
FY 20-21* |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
||
---|---|---|---|---|
Operating Revenue | Rs.Crs. | 51.48 | 53.58 | 45.7 |
EBITDA | Rs.Crs. | 10.24 | 7.41 | 10.41 |
PAT | Rs.Crs. | 1.37 | -2.38 | 0.12 |
Tangible Net Worth | Rs.Crs. | 11.23 | 10.81 | 12.18 |
Total Debt/Tangible Net Worth | Times | 5.34 | 5.83 | 5.66 |
Current Ratio | Times | 1.22 | 1.22 | 1.23 |
*Provisional figures (CA Certified)
Note : BWR has essentially relied upon the audited financial statements of Autotech Nonwovens Pvt. Ltd. of FY18, FY19, FY20, and provisional financial (CA certified) statements of FY21.
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
Upward factor:
Downward factor
Liquidity: Stretched
The liquidity position of ANPL remains Stretched reflected by high working capital utilization. The firm’s average working capital utilization is 85-90% with HDFC Bank & 62 % in BOB for the last 12 months.Net cash acc was not enough to service its CPLTD in FY20 whereas it is expected almost equal in FY21. Further, expected cash accruals of around Rs 5.6 crore in fiscal 2022 and Rs 6.25 crore in fiscal 2023 against a current portion of long-term debts of around Rs 5.3 crore in fiscal 2022 and Rs 3.15 crore in fiscal 2023. The current ratio is moderate estimated at 1.22 times on March 31, 2021. The promoters are likely to extend support in the form of unsecured loans to meet its working capital requirements and repayment obligations. Cash and cash equivalents are expected to be low at Rs.0.94 Cr. in FY21.
PROFILEANPL, incorporated in May 1991, is promoted by Mr. Ankit Desai and the Shahlon group. The company manufactures nonwoven technical textiles at its unit in Surat, Gujarat. In addition, since last year ANPL is also manufacturing nonwovens for critical PPE Coveralls (Breathable and Non-Breathable) and N95 masks, Needlepunch, PP Spunbond, Spunlace, and Thermal bonded fabrics for Medical Hygiene.
KEY FINANCIAL INDICATORSKey Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 53.58 | 45.70 |
EBITDA | Rs.Crs. | 7.41 | 10.41 |
PAT | Rs.Crs. | -2.38 | 0.12 |
Tangible Net Worth | Rs.Crs. | 10.81 | 12.18 |
Total Debt/Tangible Net Worth | Times | 5.83 | 5.66 |
Current Ratio | Times | 1.22 | 1.23 |
NA
S.No | Current Rating (2021) | Rating History | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Facilities | Tenure | Amount (Rs.Crs) | Rating | 2020 | 2019 | 2018 | ||||
Fund Based | ||||||||||
1 | Term Loan - SanctionedTerm Loan - SanctionedCash Credit - SanctionedCash Credit - SanctionedCovid -19 Emergency Line Credit - Sanctioned | Long Term | 02.2011.1005.0007.5000.47 | BWR BB-(Stable) | NA | NA | NA | |||
Non-Fund Based | ||||||||||
2 | Bank Guarantee - SanctionedLetter of Credit - Sanctioned | Short Term | 02.0002.50 | BWR A4 | NA | NA | NA | |||
Total | 30.77 | (Rupees Thirty Crores and Seventy Seven 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 | |
---|---|
Urvi Shah Rating Analyst urvi.s@brickworkratings.com |
Dileep Narayan Singh Director dileep.s@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 | Bank of Baroda | Term LoanSanctioned | 2.20 | _ | 2.20 |
2 | Bank of Baroda | Term LoanSanctioned | 11.10 | _ | 11.10 |
3 | Bank of Baroda | Cash CreditSanctioned | 5.00 | _ | 5.00 |
4 | Bank of Baroda | Covid -19 Emergency Line CreditSanctioned | 0.47 | _ | 0.47 |
5 | Bank of Baroda | Bank GuaranteeSanctioned | _ | 2.00 | 2.00 |
6 | HDFC Bank | Letter of CreditSanctioned | _ | 2.50 | 2.50 |
7 | HDFC Bank | Cash CreditSanctioned | 7.50 | _ | 7.50 |
Total | 26.27 | 4.50 | 30.77 | ||
TOTAL (Rupees Thirty Crores and Seventy Seven 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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