RATING RATIONALE
06Dec2024

Mehsana Dairy And Food Products Ltd.

Brickwork Ratings reaffirms the long term and short term ratings and removes the ratings from Issuer Not Cooperating category for the Bank Loan Facilities of Rs. 48.92 Crs. of Mehsana Dairy And Food Products Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(11 Sep 2023)
Present
Fund Based 37.93 47.92 Long Term BWR D
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
BWR D
removal from ISSUER NOT COOPERATING* category/Reaffirmed
Non Fund Based 1.00 1.00 Short Term BWR D
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
BWR D
removal from ISSUER NOT COOPERATING* category/Reaffirmed
Grand Total 38.93 48.92 (Rupees Forty Eight Crores and Ninety Two 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
*** Previously BWR had rated for Cash Credit limit aggregating Rs.9.50 Cr, Term Loan Out standing Rs. 28.43 Crs and Bank Guarantee Rs.1.00 Cr of State Bank of India. However at present the client had requested for surveillance cum enhancement rating with Multiple Banking arrangement with Banks namely - State Bank of India, Mehsana Urban Coperative Bank, The Mehsana Nagrik sahakari Bank and New India Co-operative Bank aggregating to Rs. 48.92 Cr.


RATING ACTION / OUTLOOK

BWR has essentially relied on Audited financials up to FY 2023-24, provisional financial for H1 FY 2025, publicly available information and information & clarifications provided by management. The rating is downgraded based on the banker’s feedback and bank statement analysis which shows that there were delays in repayment of debt obligations. It may however be noted that, the company has started repaying debt obligation regularly. If the same is maintained for a period of 90 days the above stance may be reviewed as per SEBI guideline on recognition of default.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

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

The ability of the company to ensure timely completion of the ongoing projects without cost overrun, improve the sales and collections and prudently manage its debt and inventory would be the key rating sensitivities.

Upward :

LIQUIDITY INDICATORS - Stretched

MDFPL has a cash and bank balance of  Rs.1.52 Cr in FY 2024 and The current ratio of the company stands at 0.93 times in FY2024 however as the company current ration is below 1, it indicates that the company facing difficulties to cover it's short term obligations. The current portion of long term debt is 8.74 Cr and the net cash accruals is 17.55 Cr in FY2024 which is includes Rs.6.11 Cr of subsidy income. ISCR of the company stands at 2.38 times in FY2024. The DSCR of the company stands at 1.37 times in FY2024. Taking all the above points into consideration the firm liquidity position is defined as Stretched.

ABOUT THE ENTITY
Macro Economic Indicator Sector Industry Basic Industry
Fast Moving Consumer Goods Fast Moving Consumer Goods Food Products Dairy Products

Mehsana Dairy & Food Products Ltd., known as MDFL, is a public limited company situated in an abundant milk-producing area of North Gujarat. MDFL has its beginning in “Bharat dairy”. Bharat Dairy was started in 2010 by an entrepreneur Mr Kiritbhai B Patel.MDFL is the largest private sector green field dairy project in Gujarat. It is situated on a state highway at only 7 km from   Mehsana, a well-known district town in North Gujarat. Erstwhile Bharat Dairy was marketing their products under the “Bharat“ brand.

MDFL has undertaken a big exercise of creating a new brand, that is “ BHARAT HORNS”. The brand transition was successfully concluded and now all products of MDFL are sold under this new brand “ BHARAT  HORNS”. The company has its own chilling/ milk collection centers at Vadnagar and Diyodar. It also receives milk directly at its main plant at Aloda.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 22 - 23
(Audited - Annual)
FY 23 - 24
(Audited - Annual)
FY 24 - 25
(Provisional - Midterm-H1)
Operating Revenue Rs.Crs. 146.22 210.59 103.83
EBITDA Rs.Crs. 17.96 18.93 10.00
PAT Rs.Crs. 3.59 8.83 4.24
Tangible Net Worth Rs.Crs. 22.09 31.62 42.37
Total Debt / Tangible Net Worth Times 3.04 2.45 1.75
Current Ratio Times 0.70 0.93 1.74
KEY COVENANTS OF THE FACILITY RATED

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities.


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating AgencyStatus and Reason for Non-CooparationDate of Press Release
CRISILCRISIL Ratings has been consistently following up with Mehsana Dairy and Food Products Limited (MDFPL) for obtaining information through letter and email dated November 04, 2024, apart from telephonic communication. However, the issuer has remained non cooperative. Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of MDFPL. Therefore, on account of inadequate information and lack of management cooperation, CRISIL Rating has migrated the ratings on bank facilities of MDFPL to ‘CRISIL D/CRISIL D Issuer not cooperating' as on November 19, 2024.19Nov2024

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2024) 2023 2022 2021
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 47.92
BWR D
(removal from ISSUER NOT COOPERATING* category/Reaffirmed)
11Sep2023
BWR D
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
21Sep2022
BWR B Stable
(Downgrade/ISSUER NOT COOPERATING*)
16Apr2021
BWR D
(Downgrade)
0.00
NA
NA
NA
NA
NA
03Sep2021
BWR B+ Stable
(Upgrade)
Non Fund Based ST 1.00
BWR D
(removal from ISSUER NOT COOPERATING* category/Reaffirmed)
11Sep2023
BWR D
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
21Sep2022
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*)
16Apr2021
BWR D
(Downgrade)
0.00
NA
NA
NA
NA
NA
03Sep2021
BWR A4
(Upgrade)
Grand Total 48.92 (Rupees Forty Eight Crores and Ninety Two lakhs Only)
*** Previously BWR had rated for Cash Credit limit aggregating Rs.9.50 Cr, Term Loan Out standing Rs. 28.43 Crs and Bank Guarantee Rs.1.00 Cr of State Bank of India. However at present the client had requested for surveillance cum enhancement rating with Multiple Banking arrangement with Banks namely - State Bank of India, Mehsana Urban Coperative Bank, The Mehsana Nagrik sahakari Bank and New India Co-operative Bank aggregating to Rs. 48.92 Cr. Hyperlink/Reference to applicable Criteria
Analytical Contacts

Krishnappa Murugesh

Ratings Analyst krishnappa.m@brickworkratings.com

V Ramachandra

Director - Ratings ramachandra.v@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Mehsana Dairy And Food Products 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.) Complexity of the Instrument
1 New India Co-operative Bank Ltd Term LoanOut-standing 4.36 _ 4.36 Simple##
2 State Bank Of India (SBI) Cash CreditSanctioned 22.00 _ 22.00 Simple##
3 State Bank Of India (SBI) Term LoanOut-standing 4.68 _ 4.68 Simple##
4 State Bank Of India (SBI) Term LoanOut-standing 3.63 _ 3.63 Simple##
5 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 1.00 1.00 Simple##
6 The Mehsana Nagrik Sahakari Bank Ltd. Over DraftSanctioned 3.25 _ 3.25 Simple##
7 The Mehsana Urban Co-operative Bank Cash CreditSanctioned 10.00 _ 10.00 Simple##
Total 47.92 1.00 48.92
TOTAL (Rupees Forty Eight Crores and Ninety Two lakhs Only)
* Previously BWR had rated for Cash Credit limit aggregating Rs.9.50 Cr, Term Loan Out standing Rs. 28.43 Crs and Bank Guarantee Rs.1.00 Cr of State Bank of India. However at present the client had requested for surveillance cum enhancement rating with Multiple Banking arrangement with Banks namely - State Bank of India, Mehsana Urban Coperative Bank, The Mehsana Nagrik sahakari Bank and New India Co-operative Bank aggregating to Rs. 48.92 Cr.

## 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.

ANNEXURE-II
INSTRUMENT DETAILS

InstrumentIssue DateAmount (Rs.Crs)Coupon Rate (%)Maturity DateISIN ParticularsComplexity of the Instrument
NilNilNilNilNilNilNil

ANNEXURE-III
List of entities consolidated

Name of Entity% OwnershipExtent of consolidationRationale for consolidation
NilNilNilNil

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