Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.9.50 Crs. of Aristo Steel Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Cash Credit Sanctioned | 09.50 | Long Term | BWR BB - (Stable) |
| Sub Total | 09.50 | ||
| Grand Total | 09.50 | (Rupees Nine Crores and Fifty lakhs Only) | |
BWR has assigned a rating of BWR BB- to Aristo Steel Pvt Ltd on account of extensive experience of the promoters, moderate coverage ratios, moderate profit margins, increase in the scale of operations along with due consideration of stretched gearing due to low level of owned funds and stretched liquidity position.
The ratings have been assigned a stable outlook on account of the potential growth in demand in the Indian stainless steel industry especially the kitchenware industry resulting in an increase in the number of unorganised players in the organised market. BWR believes that Aristo Steel Pvt Ltd business risk profile will be maintained over the medium term.
KEY RATING DRIVERS
Credit Strengths:
The promoters have been in the same field for over a decade.
Moderate coverage ratios with the ISCR and DSCR standing at 2.02x and 1.20x respectively in Fy18 as compared to 2.09x and 1.18x respectively in Fy17 although slightly declined but still adequate.
Moderate profit margins with NPM and OPM standing at 1.40% and 6.37% respectively in Fy18 as compared to 0.81% and 8.67% respectively in FY17. Th same has increased to 4.62% and 8.86% in FY19.
Modest scale of operations with TOI increasing to Rs 35.78 Cr in FY18 as compared to Rs 18.26 Cr in FY17. The same has increased to Rs 39.54 Cr in Fy19.
Low level of owned funds with the TNW standing at Rs 1.81 Cr in FY18 as compared to Rs 1.31 Cr in Fy17 due to retention of profits. The same has increased to Rs 3.25 Cr in Fy19 provisionals.The analysed TNW has increased to Rs 4.30 Cr in FY18. This has resulted in stretched gearing with the total debt/ TNW standing at 7.19x in Fy18 as compared to 5.28x in FY17 whereas, the TOL/TNW is standing at 10.04x in Fy18 as compared to 4.81x in FY17 due to increase in the unsecured loans taken from friends and family. Whereas, the analysed gearing stands at 2.44x in FY18 which has improved in FY19 to 1.86x.
Stretched liquidity profile with the current ratio standing at 1.10x in FY18 as compared to 1.13x in Fy17. The same stands at 1.14x in FY19 provisionals.
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).
RATING SENSITIVITIES
Going forward the company’s ability to improve the scale of operations, improve and maintain profitability, the debt servicing capability & liquidity will be the key rating sensitivities.
Positive: The rating will be upgraded if the company is able to achieve significant growth in revenue and profitability backed by a favourable industry scenario and optimum utilisation of capacities, and simultaneous improvement working capital management.
Negative: The rating may be downgraded if there is lower than expected revenues affecting the profitability margins, coverage ratios, liquidity and gearing ratios adversely.
LIQUIDITY POSITION
LIQUIDITY POSITION: Stretched
The cash and cash equivalents of ASPL stand at Rs 0.08 Cr in FY18. The company has no long term debt obligations. The current ratio of the company stands at 1.10x in FY18. The average CC utilization for the last 6 months stands at ~90%.
PROFILEAristo Steel Pvt Ltd was founded in the year 1986 by Vasantlal Dungarshi Chheda, Mohan Murji Gada and Ratilal Gaugbhai Dedhia. Headquarter is located in Mumbai, including headquarter there are seven branches of Aristo steel at C.P Tank Mumbai. The two manufacturing plants are situated at Vasai East, Mumbai. Aristo Steel pvt ltd provide variety of range in each segment for instance Dabbas, Thalis, Vatis, Tiffin etc. product range is extended as almost 500 plus variant.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 17-18 |
FY 16-17 |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 35.78 | 18.26 |
| EBITDA | Rs.Crs. | 2.28 | 1.58 |
| PAT | Rs.Crs. | 0.50 | 0.15 |
| Tangible Net Worth | Rs.Crs. | 1.81 | 1.31 |
| Total Debt/Tangible Net Worth | Times | 7.19 | 5.28 |
| Current Ratio | Times | 1.10 | 1.13 |
| S.No | Current Rating (2019) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2018 | 2017 | 2016 | ||||
| Fund Based | ||||||||||
| 1 | Cash Credit - Sanctioned | Long Term | 9.50 | BWR BB-(Pronounced as BWR Double B minus)(Outlook: Stable) | NA | NA | NA | |||
| Total | 09.50 | (Rupees Nine Crores and Fifty lakhs Only) | ||||||||
BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf a > Investors queries can be sent to info@brickworkratings.com.
For More Information Contact:| Analytical Contacts | Investor Contacts |
|---|---|
|
Saloni R Singh Ratings Analyst D : +91 22 6745 6647 B : +91 22 2831 1426, +91 22 2831 1439 saloni.s@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
Sushil Kumar Chitkara Associate Director - Ratings B : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|
| 1 | Cash CreditSanctioned | 9.50 | _ | 9.50 |
| Total | 9.50 | |||
| TOTAL (Rupees Nine Crores and Fifty 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 |
Brickwork Ratings (BWR) is India's home grown credit rating agency built with superior analytical prowess from industry's most experienced credit analysts, bankers and regulators. Established in 2007, Brickwork Ratings aims to provide reliable credit ratings by creating new standards for assessing risk and by offering accurate and transparent ratings. Brickwork Ratings provides investors and lenders timely and in-depth research across the Structured Finance, Public Finance, Financial Institutions, Project Finance and Corporate sectors.
Brickwork Ratings has employed over 350 credit analysts and credit market professionals across 8 offices in India. Our experienced analysts have published over 12,000 ratings across asset classes. Brickwork Ratings is committed to provide the investment community with the products and services needed to make informed investment decisions. Brickwork Ratings is a registered credit rating agency by Securities and Exchange Board of India (SEBI) and a recognized external credit assessment agency (ECAI) by Reserve Bank of India (RBI) to carry out credit ratings in India.
Brickwork Ratings is promoted by Canara Bank, India's leading public sector bank. More on Canara Bank available at www.canarabank.co.in
For more information, visit www.brickworkratings.com
Copyright © 2019 by Brickwork Ratings India Pvt. Ltd., 3rd Floor, Raj Alkaa Park, 29/3 & 32/2, Bannerghatta Main Rd, Kalena Agrahara, Bengaluru, Karnataka 560076.Telephone: +91 80 4040 9940. Fax: +91 80 4040 9941. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings, Brickwork Ratings relies on factual information it receives from issuers and underwriters and from other sources Brickwork Ratingsbelieves to be credible. Brickwork Ratings conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Brickwork Ratings' factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Brickwork Ratings' ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Brickwork Ratings relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Brickwork Ratings and to the market in offering documents and other reports. In issuing its ratings Brickwork Ratings must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts.As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed.
THE INFORMATION IN THIS REPORT IS PROVIDED "AS IS" WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND. A Brickwork Ratings rating is an opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that Brickwork Ratings is continuously evaluating and updating. Therefore, ratings are the collective work product of Brickwork Ratings and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Brickwork Ratings is not engaged in the offer or sale of any security. All Brickwork Ratings reports have shared authorship. Individuals identified in a Brickwork Ratings report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Brickwork Ratings rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Brickwork Ratings. Brickwork Ratings does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Neither Brickwork Ratings nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, "BWR Reps") guarantee the accuracy, completeness or adequacy of the Report, and no BWR Reps shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of this publication. In no event shall any BWR Reps be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages. Brickwork Ratings receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities.