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.
ParticularsFacilities** | 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) |
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 DRIVERSCredit Strengths:
Directors of the company have an extensive experience of more than 20 years in the dairy industry through Bharat Dairy; a group concern in the same line of business.
The company has managed to increase its revenue on YOY basis and has moderate scale of operations.
The company faces intense competition from various local brands manufacturing dairy products in and around Mehsana along with well established brands like Amul and Britannia. This might create pressure on the profit margins of the company.
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.
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 :
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 ENTITYMacro 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 |
The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities.
Creadit Rating Agency | Status and Reason for Non-Cooparation | Date of Press Release |
---|---|---|
CRISIL | CRISIL 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 |
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) |
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 |
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) |
## 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.
Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
---|---|---|---|---|---|---|
Nil | Nil | Nil | Nil | Nil | Nil | Nil |
Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
---|---|---|---|
Nil | Nil | Nil | Nil |
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