RATING RATIONALE
06 Dec 2019
Tirupati Minerals Pvt. Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.14.00 Crs. of Tirupati Minerals Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Cash Credit Sanctioned | 12.00 | Long Term | BWR BB (Stable) |
| Sub Total | 12.00 | ||
| Non-Fund Based | |||
| Letter of Credit Sanctioned | 02.00 | Short Term | BWR A4 |
| Sub Total | 02.00 | ||
| Grand Total | 14.00 | (Rupees Fourteen Crores Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable
BWR believes that Tirupati Minerals 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.
KEY RATING DRIVERS
BWR has essentially relied upon the audited financial statements of Tirupati Minerals Pvt. Ltd. of FY17,FY18,FY19 publicly available information and information / clarifications provided by the entity’s management.
The rating draws strength from the vast business experience of the directors, 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.
Credit Strengths:
- Growth the Operating Revenues :
The revenues of the company have increased substantially by 87.74% in FY19.
- Moderate Financial Risk Profile :
The coverage ratios as indicated by DSCR (Adjusted) and ISCR of the company stand at 3.79X and 7.11X respectively in FY19 indicating company’s adequacy to meet its debt obligations.The current ratio of the company stands at 1.17X in FY19 indicating a relatively moderate liquidity position. The gearing as reflected by the TD/TNW(analyzed) stands at 1.469X in FY19 which is considered as normal.
Credit Risks:
- Intense Competition In the Coal Trading Industry :
The coal trading industry is highly fragmented with presence of many organised and unorganised players. Limited value addition in trading activities restricts the pricing flexibility and in turn exertspressure on the company’s margins.
- Regulatory Risk :
Coal being a critical natural resource,adhering to regulatory guidelines and adapting the same remains a concern.
- Deteriorating Profit Margins :
The profit margins of the company have marginally deteriorated in FY19.
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 increase its scale of operations, improve profitability, efficiently manage its working capital and strengthen its overall credit profile would be the key rating rating sensitivities.
Positive: The outlook may be revised to 'Positive' if higher growth in revenue, stable operating margin, or sustainable improvement in working capital cycle strengthens the financial risk profile.
Negative: The outlook may be revised to 'Negative' if substantially lower profitability or revenue or stretched working capital cycle weakens the financial risk profile.
LIQUIDITY POSITION
Liquidity profile of the company is driven by current ratio of 1.17X in FY19.The average working capital utilization stood at 66.81% in the past six months. Its cash &equivalents balance was reported at Rs.1.68cr. Company has no current investments as on FY19.
PROFILEIncorporated in 2009 at Chhattisgarh, Tirupati Minerals Pvt Ltd is engaged in trading of coal of all types with GCV 3400 to 4500KCAL, iron ore & pellets, coal, iron ore & iron pellets lifting, transporting along with railway transportation & lifting work for mineral. The head office is located at Champa with branches at Jairamnagar, Bilaspur, & Raigarh in the State of Chhattisgarh. Mr. Anshuman Murarka & Mr Pramod Agarwal are the Directors, have to their credit 10years’ experience in this business.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 305.53 | 172.54 |
| EBITDA | Rs.Crs. | 11.62 | 6.84 |
| PAT | Rs.Crs. | 3.42 | 3.69 |
| Tangible Net Worth | Rs.Crs. | 10.58 | 7.16 |
| Total Debt/Tangible Net Worth | Times | 2.62 | 2.17 |
| Current Ratio | Times | 1.16 | 1.15 |
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 | 12.00 | BWR BB(Stable) | NA | NA | NA | |||
| Non-Fund Based | ||||||||||
| 2 | Letter of Credit - Sanctioned | Short Term | 2.00 | BWR A4 | NA | NA | NA | |||
| Total | 14.00 | (Rupees Fourteen Crores 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 | Investor Contacts |
|---|---|
|
Siddhi Kadakia Ratings Analyst D : +91 22 6745 6648 B : +91 22 2831 1426, +91 22 2831 1439 siddhi.k@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 | 12.00 | _ | 12.00 |
| 2 | Letter of CreditSanctioned | _ | 2.00 | 2.00 |
| Total | 14.00 | |||
| TOTAL (Rupees Fourteen Crores 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 |
Ratings are not a recommendation or suggestion ,directly or indirectly, to you or any other person, to buy sell, make or hold on any investement,loan or security or to undertake any investement strategy with respect to any investment,loan or security or any issuer.
Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services. NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.