Aryas Grains Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.8.00 Crs. of Aryas Grains Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Cash Credit - Sanctioned	04.00	Long Term	BWR B + (Stable)
Sub Total	04.00
Non-Fund Based
Bank Guarantee - Sanctioned Bank Guarantee - Proposed	01.00 03.00	Short Term	BWR A4
Sub Total	04.00
Grand Total	08.00	(Rupees Eight Crores Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR has assigned a long term rating of BWR B+ and short term rating of BWR A4 for the bank loan facilities of Aryas Grains Pvt Ltd. The rating draws strength from the reasonable business experience of the promoters, growth in scale of operations, moderate financial risk profile, and adequate liquidity. However, the rating is constrained by the leveraged capital structure, customer concentration risks, agro-climatic risks and sensitivity to external factors including high level of competition from other established players in the market.

The rating has been assigned a 'Stable' outlook as business risk profile ie the growth and profitability is expected to be maintained over the medium term.

KEY RATING DRIVERS

Credit Strengths:

• Reasonable Experience of Promoters :

  Aryas Grains Pvt Ltd is led by promoters who have on average, experience of over half a decade in the business of rice milling and logistics. Reasonable experience of the promoters, their growing grasp over industry dynamics, and healthy relationships with clients and suppliers should support business risk profile.

• Growth in Scale of Operations :

  TOI, although at a modest level, has improved and stood at 24.39 cr (FY19) v/s 12.70 cr (FY18) on account of normalisation of sales and increased limit of BG. TOI comprises of income from Rice/paddy sales as well income from goods transportation and milling work for the State Government to the extent of 8.42% of the total revenue in FY19 Provisional 6MFY20 shows TOI standing at 9.54 cr.

• Moderate Financial Risk Profile :

  NPM was at an adequate level and increased to 1.04% in FY19 from 0.52% in FY18 due to increase in revenue. However, OPM has marginally decreased to 7.77% in FY19 from 8.37% in FY18 due to overall increase in operating expenses.ISCR stood at a moderate level and has improved to 3.18x in FY19 v/s 2.03x in FY18 due to increase in OPBDIT while interest cost has remained at the same level while DSCR stood at 2.52x in FY19.

• Adequate Liquidity :

  Current Ratio stood at an adequate level of 1.26x in FY19 marginally up from 1.22x in FY18 due to an increase in amount of current portion of long term debts.

Credit Risks:

• Leveraged Capital Structure :

  TNW (A) remains at a modest level and has increased to 3.53 cr in FY19 from 2.76 cr in FY18 mainly on account of infusion of quasi equity (USL). TD/TNW(A) is at a moderate level at 1.60x in FY19 down from 2.29x in FY18 due to increase in TNW and simultaneous marginal decrease in Total Debt.

• Customer Concentration Risk :

  The rating is constrained by company’s dependence on a few large clients, which renders its revenues susceptible to their business plans and performance, with ~80% of Revenue base derived from just 5 customers.

• Agro-Climatic Risks :

  The rice-milling industry is exposed to vagaries of monsoon and other climatic risks which might affect the availability of paddy in adverse weather conditions.

• Sensitivity to external factors :

  Rice Milling industry is highly fragmented with low barriers to entry and intense competition from large number of unorganised players. Intense Competition coupled with availability of Raw materials may increase price volatility risk. However, Company also earns some revenue through providing logistical services in its locality which may slightly mitigate revenue risk.

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).

RATING SENSITIVITIES

The ability of the concern to achieve projections and improve its capital structure, scale of operations, customer base as well as  liquidity position would be its key rating sensitivity.

LIQUIDITY POSITION

Liquidity was adequate with Current Ratio stood at 1.26x in FY19. Cash & Cash Equivalent stood at Rs. 0.04 cr. Working Capital facility utilisation is around 85% on average.  However, there is sufficient cushion in accruals vis-à-vis repayment obligations.

PROFILE

Aryas Grains Pvt Ltd (AGPL) was set up on 16th July 2014 and is led by directors Mr. Rajendra Singh and Mrs. Savita Dhankar and Mr. Dharampal Singh with its registered office located in Raipur, Chhattisgarh. The Company is engaged in rice milling with its processing unit set up in Raipur, CH with an aggregate production capacity of 6000 quintals per day. AGPL also provides job work services of rice milling to the State government as well as logistical services in its locality.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19	FY 17-18
Operating Revenue	Rs.Crs.	24.39	12.70
EBITDA	Rs.Crs.	1.90	1.06
PAT	Rs.Crs.	0.25	0.07
Tangible Net Worth	Rs.Crs.	2.34	2.08
Total Debt/Tangible Net Worth	Times	2.94	3.35
Current Ratio	Times	1.26	1.22

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
Fund Based
1	Cash Credit - Sanctioned	Long Term	4.00	BWR B+ (Pronounced as BWR Single B plus) (Outlook: Stable)	NA	NA	NA
Non-Fund Based
2	Bank Guarantee - Sanctioned Bank Guarantee - Proposed	Short Term	1.00 3.00	BWR A4 (Pronounced as BWR A Four )	NA	NA	NA
Total			08.00	(Rupees Eight Crores 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
• Short Term Debt
• Manufacturing Companies

For More Information Contact:

Analytical Contacts	Investor Contacts
Sumanth P Ratings Analyst B : + 91 22 2831 1426/6745 6666 Ext : 689 sumanth.p@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 Credit - Sanctioned	4.00	_	4.00
2	Bank Guarantee - Sanctioned	_	1.00	1.00
3	Bank Guarantee - Proposed	_	3.00	3.00
Total				8.00
TOTAL (Rupees Eight Crores Only)