Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.8.00 Crs. of Shree Siddheshvari Oil Industries
ParticularsFacility** | Amount (Rs.Crs) | Tenure | Rating* |
---|---|---|---|
Fund Based | |||
Cash Credit Sanctioned | 08.00 | Long Term | BWR B + (Stable) |
Sub Total | 08.00 | ||
Grand Total | 08.00 | (Rupees Eight Crores Only) |
BWR believes that Shree Siddheshvari Oil Industries 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
BWR has essentially relied upon the audited financial statements of Shree Siddheshvari Oil Industries of FY18-19,FY19-20,FY20-21 ,provisional financial statements of FY21-22 and projected financial statements of FY22-23, publicly available information and information / clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the partner/s and moderate financial risk profile. However, the rating is constrained by low business margin and a rather plateaued volume of business, coupled with Partnership nature of Business constitution leaving it susceptible to capital withdrawal risk and competition from other established players in the market.
Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities.
Credit Strengths:
The firm has Five partners in partnership. Mr. Hareshbhai Patel and Mrs. Ranjitaben Patel have an average more than 11 years of experience in this firm.
The debt protection metrics of the company remained at a comfortable level during FY 21 as ISCR at 1.04x and DSCR at 1.11x and Networth has increased from Rs. 1.30 Crs in FY 21 to Rs. 1.90 Crs. for FY 22(Provisional).
The firm is exposed to intense competition in the fragmented cotton industry. Major raw material is raw cotton, prices of which are volatile and the firm, on account of low value added and commoditized nature of its products, has lower bargaining ability with its large customers. Any sharp volatility in input prices would adversely impact operating margins.
The partnership nature of firm leaves the company exposed to risk of Capital withdrawal by Partners, in past partners have withdrawn and reinfused capital in the firm, leaving phases of slight lower networth affecting leverage ratios.
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
Positive :
. Significant improvement in profit margins and Networth of the firm.
. Higher Debt Protection metrics of the firm.
Negative :
. Adverse hike in Maximum Support Price (MSP) may impact the input cost.
. Any decline in scale of operations and/or profitability leading to sustained deterioration of liquidity and/or debt protection parameters.
PROFILEEstablished in 2009, Shree Siddheshvari Oil Industries is a Partnership Firm. There are five partners in the firm. The firm is engaged in Manufacturing of Cotton Bales, Ginning, Cotton Seed Oil and trading in cotton. The firm is situated at Visnagar- Kada Road, Visnagar in Gujarat State.
KEY FINANCIAL INDICATORSKey Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 49.30 | 47.08 |
EBITDA | Rs.Crs. | 0.76 | 0.84 |
PAT | Rs.Crs. | 0.03 | 0.03 |
Tangible Net Worth | Rs.Crs. | 1.30 | 1.89 |
Total Debt/Tangible Net Worth | Times | 5.92 | 3.65 |
Current Ratio | Times | 1.13 | 1.10 |
S.No | Current Rating (2022) | Rating History | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Facilities | Tenure | Amount (Rs.Crs) | Rating | 2021 | 2020 | 2019 | ||||
Fund Based | ||||||||||
1 | Cash Credit - Sanctioned | Long Term | 08.00 | BWR B+(Stable) | NA | NA | NA | |||
Total | 08.00 | (Rupees Eight 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 | |
---|---|
Joshi Vishalkumar Dinkarkumar Lead Analyst vishalkumar.j@brickworkratings.com |
Dileep Narayan Singh Director dileep.s@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
---|---|---|---|---|---|
1 | The Mehsana Urban Co-operative Bank | Cash CreditSanctioned | 8.00 | _ | 8.00 |
Total | 8.00 | 0.00 | 8.00 | ||
TOTAL (Rupees Eight 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 |
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