Asterix Reinforced Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.21.19 Crs. of Asterix Reinforced Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Cash Credit - Sanctioned Term Loan - Sanctioned Term Loan - Sanctioned Term Loan - Sanctioned Covid -19 Emergency Line Credit - Sanctioned	09.00 02.08 00.93 00.88 02.30 00.00	Long Term	BWR BB + (Stable)
Sub Total	15.19
Non-Fund Based
Letter of Credit - Sanctioned	06.00	Short Term	BWR A4 +
Sub Total	06.00
Grand Total	21.19	(Rupees Twenty One Crores and Nineteen lakhs 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 Asterix Reinforced 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

Credit Strengths:

• Experienced and qualified promoters :

  The promoter Mr. Pavwan Drolia has rich experience in this industry, where in he started with trading of chemicals and after gaining experience started with manufacturing unit to produce UPR.

• Moderate levels of operations :

  The company has moderate levels of operations as revenues have increased to Rs. 91.49crs in FY19 as compared to Rs. 66.21crs in FY18 on account of increase in orders. There is further slight improvement to Rs. 100.78 crs FY20(Prov).

• Covid Impact :

  There is a general decline in overall macroeconomic scenario and effects of COVID-19 on all sector. The company was shut down for period 23rd march 2020- 30th April 2020, due to nationwide lockdown however the company resumed its operations from 1st May 2020.There is not much impact on the business as contrary the COVID has positive opportunities for the company has few international companies which were importing from China have given orders to Asterix.

• Moderate coverage ratio & moderate current ratio :

  Moderate coverage ratio with ISCR and DSCR standing at 3.20x and 2.66x in FY19 and it declined compared to 5.14x and 3.13x in FY18.However the company has further decline at 2.45x and 1.66x in FY20(Prov) but adequate.Current ratio stand at 1.44x in FY19 and it has improved as compared to 1.36x in FY18. Current ratio further improved at 1.59x in FY20(Prov).

• Moderate gearing: :

  Total debt to TNW and TOL/TNW standing at 0.72x and 1.78x respectively in FY19 and it declined as compared to FY18 at 0.26x and 1.27x respectively but moderate. Further in FY20 (Prov) it declined further standing at 0.91x and 2.00x respectively.

Credit Risks:

• Modest profitability margin: :

  Modest profitability margin: with NPM and OPM standing at 0.78% and 4.78% in FY19 as compared to 0.98% and 4.66% in FY18. Profitability slightly improved in FY20 (Prov) with NPM and OPM standing at 0.87x and 1.59x.

• Foreign exchange fluctuation risk :

  The company is exposed to foreign fluctuation risk as company imports raw material and has started exporting of company products.

• Supplier concentration- :

  High supplier concentration with Top 5 suppliers contributed 54.42% of the purchases in FY20.

• Susceptibility to profit margins due to volatility in raw material prices: :

  The raw materials required for manufacturing of unsaturated polyester Resin and SMC Moulding is Propylene Glycol, Diethylene Glycol, Phthalic Anhydride, etc. prices of which are fluctuating as per demand-supply factors with reference to crude oil prices.

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

Key Rating Sensitivities: Going forward, the ability of the Entity to accelerate & execute its project timely, increase its profit margins, Compliance of Bank's sanction terms, efficiently manage its working capital and cash flows for timely servicing of interest/debt obligations and strengthening of overall financial risk profile shall be the key rating sensitivities.;

Positive: The rating will be upgraded if the company is able to achieve significant growth in revenue and improvement in profitability backed by a favourable industry scenario.

Negative : The rating may be downgraded in case the revenues of the company and profits substantially plunge from the current levels and gearing and debt service metrics deteriorates.

LIQUIDITY POSITION

Adequate- The average CC utilization for the last 8  stands at 81.09% . The cash and cash equivalents stand at Rs. 0.07 crs in FY19 as compared to Rs. 0.09crs in FY18 and it shows further improvement  in FY20(Prov) at Rs. 2.28crs . The current ratio stands at 1.44x in FY19 as it improved from 1.36x in FY18,it shows further improvement to  1.59x in FY20(Prov) . The Net Cash Accruals to Long term debt stand at 0.18x in FY19 as compared to 0.41x in FY18, it declined at 0.14x in FY20(Prov) . ISCR and DSCR stand at  3.20x &  2.66x respectively in FY19  as compared to 5.14x & 3.13x in FY18, however FY20(Prov)  shows slight decline at 2.45x & 1.66x respectively but adequate.

PROFILE

Asterix Reinforced Limited (ARL) was originally established in 2007, under the name of “Orson Petrochemicals Limited” and changed its name to “Bombay Highpolymer Chemical Product Limited in 2009.The company is ARL was engaged in trading of Unsaturated Polyester Resin till FY16. Subsequently, in December 2016, company changed its name to Asterix Reinforced Limited and engaged in manufacturing of unsaturated polyester resin, Gelcoat, SMC (Sheet Moulding Compound). The company is under the leadership of Mr. Pawan Drolia, Mr. Pashupati Thakur and Mr. Ravi Kanojia. ARL operates through its registered office in Jogeshwari, Mumbai and factories are at Silvasa and Murbad in Maharashtra.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	77.39	57.68
EBITDA	Rs.Crs.	3.70	2.69
PAT	Rs.Crs.	0.60	0.57
Tangible Net Worth	Rs.Crs.	19.12	18.69
Total Debt/Tangible Net Worth	Times	0.72	0.26
Current Ratio	Times	1.44	1.36

NON-COOPERATION WITH PREVIOUS RATING AGENCY ,IF ANY

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2020)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2019	2018	2017
Fund Based
1	Cash Credit - Sanctioned Term Loan - Sanctioned Term Loan - Sanctioned Term Loan - Sanctioned Covid -19 Emergency Line Credit - Sanctioned	Long Term	09.00 02.08 00.93 00.88 02.30 00.00	BWR BB+ (Stable)	NA	NA	NA
Non-Fund Based
2	Letter of Credit - Sanctioned	Short Term	06.00	BWR A4+	NA	NA	NA
Total			21.19	(Rupees Twenty One Crores and Nineteen lakhs 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
• Manufacturing Companies
• Short Term Debt

For More Information Contact:

Analytical Contacts	Investor Contacts
Shweta Manohor Ratings Analyst B : +91 22 2831 1426 Ext : 653 shweta.m@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.)
Total				21.19
TOTAL (Rupees Twenty One Crores and Nineteen lakhs Only)