Bindaas Foods Pvt. Ltd.

Brickwork Ratings revises the ratings and removes the ratings from "Issuer not cooperating" category for the Bank Loan Facilities of Rs. 58.60 Crs. of Bindaas Foods Pvt. Ltd.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (05 Jun 2023)	Present
Fund Based	45.00	58.60	Long Term	BWR BB /Stable Downgrade/ISSUER NOT COOPERATING*	BWR BBB - /Stable Upgrade and Removed from the INC category
Grand Total	45.00	58.60	(Rupees Fifty Eight Crores and Sixty lakhs Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure

RATING ACTION / OUTLOOK

BWR has revised the ratings to BWR BBB-/Stable and removed them from "Issuer not cooperating" category for the bank loan facilities of Bindaas Foods Pvt. Ltd.

BWR had initially assigned a rating of BWR BBB-/Stable for the long term facilities for the bank loan facilities as on 29 March 2022. The ratings were due for renew in March 2023. On 05 June, 2023, the ratings were downgraded to BWR BB/Stable and migrated to "Issuer not cooperating" category.

The rating draws strength from from the rich experience of the promoters of the company, moderate financial risk profile, improving scale of operations and strong and widespread clientbase. The rating of the company is constrained by competition in the industry and climate risk and fluctuations in raw materials.

BWR believes that the business risk profile of “Bindaas Foods Pvt. Ltd.” 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 there is significant improvement in revenues, and profit margins of the company. The rating outlook may be revised to “Negative” if there is any deterioration in the financial risk profile including liquidity of the company.

KEY RATING DRIVERS

Credit Strengths:

Extensive experience of promoters :
Bindaas Foods Pvt Ltd has been incorporated in the year 2014.The company is a family business concern. The key promoters of the company are Mr. Bal Krishan Garg and Mr. Jayant Garg who are actively involved in the working of the company. The directors were earlier associated in the firm Shankar Agro Foods, involved in the same line of work of rice processing. Mr. Bal Krishan Garg has rich experience in the rice industry and have been engaged in this business since past 30 years.The long industry presence has helped the entity to withstand various economic cycles and has also helped in building good relationship with various customers and suppliers. Mr. Bal Krishan Garg is the president of Rice Miller Association in Punjab for both basmati and non basmati rice which helped the company in establishing market position and gaining reputed client based. Ms Radhika Garg (second generation) has joined the business and aims to bring more technological advancement . She has completed her higher education from Duke university and handles various departments like budgeting , forecasting , marketing and treasury operations.
Moderate Financial Risk Profile :
The ISCR remained constant at 1.18x during FY23 (PY: 1.18x). The DSCR stood at 1.00x during FY23 (PY: 1.04x). The company has comfortable current ratio of 1.33x in FY23(PY: 1.42x). The total debt/TNW remained improved marginally to 2.62x as on March 31, 2023 (PY: 2.65x). The TOL/TNW improved to 2.89x as on March 31, 2023 (PY: 3.22x).
Improving Scale Of Operations :
The revenue of the company has been increasing on a Y-o-Y basis. The total operating income has increased by 26.93% in FY23 to Rs. 225.47 cr (PR: Rs. 177.64 cr). It has earned revenue of Rs.140.91 cr during April 2023-Sep 2023. The OPBDIT has increased to Rs. 7.92 cr during FY23 (PY: Rs. 5.34 cr). The profitability of the company has decreased to Rs. 1.62 cr duirng FY23 (PY: 1.98 cr.). The operating profit margin has increased marginally in FY23 to 3.51% (PY: 3.01%).The net profit margin has marginally decreased to 0.72% in FY23(PY: 1.11%).
Strong and Widespread client base :
The company has a long standing business relationship with customers in the domestic as well as overseas market resulting in repeat orders form the customers. The top 5 customers contribute only 35.61 % of the total sales. The customers of the company are widespread in more than 10 countries apart from India contributing to 41.33% of the total sales to exports.

Credit Risks:

Intense Competition and homogeneous product :
The rice milling business is highly fragmented and the consequent intense competition may continue to constrain scalability, pricing power and profitability. Further, the operating margin is susceptible to any unfavourable change in government regulations.Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability
Climate risk and fluctuations in raw materials prices :
Being an agricultural product, the crop production is exposed to the vagaries of monsoon and availability of labor while the prices remain volatile due to fluctuating demand, regulatory control by the government in terms of deciding the minimum support price (MSP) and various other market dynamics. Further the performance of the company is linked to the rice industry, with cyclical changes in demand and price volatility. As paddy is a seasonal crop, the company is thus exposed to fluctuation in raw material prices.

ANALYTICAL APPROACH - Standalone

Standalone - For arriving at its ratings, BWR has considered the standalone performance of Bindaas Foods Pvt. Ltd.. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the company to improve its financial risk profile and maintaining adequate liquidity will remain the key rating sensitivities.

Positive: Rating may be upgraded in case of substantial improvement in revenues and profit margins of the company, or on account of any other favorable factor.

Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the firm including the liquidity of the company or on account of any unforeseen unfavorable events.

LIQUIDITY INDICATORS - Adequate

The company has no associate companies. The cash and bank balance stood at Rs. 0.06 cr cr as on March 31, 2023 (Aud.). The company also has FDR for Rs. 0.03 cr. The long term borrowings as on March 31, 2023 (Aud.) stood at Rs. 5.12 cr which includes GECL term loans of Rs.4.63 cr, term loan of Rs. 0.42 cr and car loan of Rs. 0.06 cr. The current portion of term debt stood at Rs. 2.36 cr as on March 31, 2023 (Aud.). The company has expected cash accruals of Rs. 4.09 cr during FY24 (Aud.). The CC limits are utilized at approx 58.1% during the 6 month period ending Oct 2023. The current ratio stood at 1.33x as on March 31, 2023 (Aud). ISCR has stood at 1.18x as on March 31, 2023 and the DSCR has stood at 1.00x as on March 31, 2023 (Aud). The conversion cycle stood at 171 days as on as on March 31, 2023 (Aud).

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Fast Moving Consumer Goods	Fast Moving Consumer Goods	Agricultural Food & other Products	Other Agricultural Products

M/s Bindaas Foods Private limited was incorporated in the year 2014 by Mr. Bal Kishan Garg and has its registered office at Mudki Road, Baghapurana district Monga, Punjab. The company is engaged in the business of manufacturing and sorting of varieties of Rice and it’s by products. The promoters of the company is in the same line of business of Rice processing and its by products since 1990. Earlier the they were operating under the firm name Shankar Agro Foods which was later discontinued by September 2016. Presently the company is spearheaded by Mr. Jayant Garg and Mr. Bal Krishan Garg in the capacity of directors and his daughter Ms. Radhika Garg as CFO. Mr. Bal Krishan Garg is the president of Rice Miller Association in Punjab for both basmati and non basmati rice. The company is an ISO 22000:2018 certified, fssai, IEC, HACCP and government recognized star export house. Bindaas Foods Pvt. Ltd. is one of the trusted names in Basmati Rice. The company sells its basmati rice in export market under brands like “Bindaas”, “Blue Star”, “Mashoor”, etc and in domestic market “Bindaas”,“Gold Farm”, “Gold India” etc. The company is selling under the brand name " Bindaas" premium rice in Dmart Pan India and other super stores. The Company is already selling Export quality Rice to Overseas buyers in Qatar , Saudi Arabia , Canada , UAE ,Oman and Kuwait. A Variety of Rice being processed and sold are given below : 1. 1121 Steam Basmati Rice 2. 1121 Creamy Sella/Parboiled Basmati Rice 3. 1121 Raw Basmati Rice 4. 1121 Golden Sella/Parboiled 5. 1401 Pusa Steam Basmati Rice 6. 1401 Pusa Raw Basmati Rice 7. 1509 Steam Basmati Rice 8. Traditional Basmati Rice 9. PR11 Steamed Long Grain Rice 10. PR11 Creamy Sella/Parboiled Long Grain Rice

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21 - 22 (Audited)	FY 22 - 23 (Audited)	FY 23 - 24 (Unaudited - Midterm-H1)
Operating Revenue	Rs.Crs.	177.64	225.47	140.91
EBITDA	Rs.Crs.	5.34	7.92	Not Available
PAT	Rs.Crs.	1.98	1.62	Not Available
Tangible Net Worth	Rs.Crs.	21.52	37.00	Not Available
Total Debt / Tangible Net Worth	Times	2.65	2.62	Not Available
Current Ratio	Times	1.42	1.33	Not Available

KEY COVENANTS OF THE FACILITY RATED

Nil.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not rated under "Issuer not cooperating" category with other CRA.

ANY OTHER INFORMATION

Nil.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2023)			2023 (History)		2022		2021		2020
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	58.60	BWR BBB-/Stable (Upgrade and Removed from the INC category)	05Jun2023	BWR BB Stable (Downgrade/ISSUER NOT COOPERATING*)	29Mar2022	BWR BBB- Stable (Assignment)	NA	NA	NA	NA
Grand Total		58.60	(Rupees Fifty Eight Crores and Sixty lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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

Analytical Contacts
Vaishali Khandelwal Rating Analyst vaishali.k@brickworkratings.com	V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Bindaas Foods Pvt. Ltd.

ANNEXURE-I

Details of Bank Facilities rated by BWR

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Axis Bank Ltd.	Cash Credit - Sanctioned	18.60	_	18.60
2	Axis Bank Ltd.	Export Packing Credit (EPC) - Sanctioned	40.00	_	40.00
3	Axis Bank Ltd.	Cash Credit - EPC - Proposed	_	_	0.00
4	State Bank Of India (SBI)	Cash Credit - Sanctioned	_	_	0.00
5	State Bank Of India (SBI)	Export Packing Credit (EPC) - Sanctioned	_	_	0.00
Total			58.60	0.00	58.60
TOTAL (Rupees Fifty Eight Crores and Sixty lakhs Only)

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