Aggarwal Laminates

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.00 Crs. of Aggarwal Laminates

Particulars

Facilities**	Amount(Rs.Crs)	Tenure	Rating*
Fund Based	7.00	Long Term	BWR B (Pronounced as BWR Single B ) (Outlook: Stable)
Total	7.00	(Rupees Seven 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 believes that Aggarwal Laminates 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 revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

• Family-owned business :

  The entire operations of the firm are managed by the members of the same family thereby ensuring smooth functioning of operations.

Credit Risks:

• Limited experience in the line of business :

  The Aggarwal family is a second-generation entrepreneur. They have previously engaged in the business which was allied and/or ancillary to the manufacturing of laminates. Thus they have some experience in the line of business.

• New project :

  The business activities have commenced on 01st April 2019, and 2019-20 is the ist year of operations. The business is in the initial phase of its life cycle. It needs to be seen if the projected revenue and profit figures are achieved.

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 entity to improve revenue & profitability margins, manage liquidity, infuse capital, achieve projected financials and timely repayment of debt obligations would be key rating sensitivities.

Positive: The rating outlook may be revised to 'Positive' in case the revenues, profit, and liquidity position show sustained improvement.

Negative: The rating may be downgraded if there is any deterioration in the financial position and capacity utilisation.

PROFILE

The partnership deed of M\S Aggarwal Laminates was executed on 01.07.18 with 3 partners namely Aarti Aggarwal, Ruchi Aggarwal, and Charu Aggarwal with an objective of manufacturing laminates of all sizes & thickness. On 17.04.19 the deed was altered to admit Ravinder Kumar as a partner. The registered office and manufacturing unit are located in Pathankot, Punjab. The commercial production has begun in April 2019. The total manufacturing capacity of the plant is 5400 MTPA and the estimated capacity utilization is 60%, 70%, 80% and 90% in the 1st (FY19-20), 2nd, 3rd and 4th year respectively. The factory will be operational 18 hours\day, 300 days\year, currently employing 65 employees across all categories. Actual sales figures for Q1 FY19-20 is Rs.3.46 crs.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 20-21	FY 19-20
Operating Revenue	Rs.Crs.	26.30	21.74
EBITDA	Rs.Crs.	2.61	2.14
PAT	Rs.Crs.	0.49	0.01
Tangible Net Worth	Rs.Crs.	4.84	4.34
Total Debt/Tangible Net Worth	Times	1.22	1.54
Current Ratio	Times	1.20	1.06

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	7.00	BWR B (Pronounced as BWR Single B ) (Outlook: Stable)	NA	NA	NA
Total			07.00	(Rupees Seven 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.

For More Information Contact:

Analytical Contacts	Investor Contacts
Chaitanya T. Ratings Analyst B : + 91 22 2831 1426/6745 6666 Ext : 616 chaitanya.t@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
Satvinder Kumar Gakhar Associate Director - Ratings B : +91 11 2341 2232 satvinder.g@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	Canara Bank	1	6		7
	TOTAL (Rupees Seven Crores Only)	1	6	0	7