Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 23.91 Crs. of ASP Sealing Products Ltd
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (08 May 2020) |
Present | ||
Fund Based | 12.50 | 19.75 | Long Term |
BWR BB Stable
Reaffiirm |
BWR D
Downgrade |
Non Fund Based | 8.16 | 4.16 | Short Term |
BWR A4+
Reaffiirm |
BWR D
Downgrade |
Grand Total | 20.66 | 23.91 | (Rupees Twenty Three Crores and Ninety One lakhs Only) |
BWR downgrades the ratings of Savi Leathers.
The revision in the rating is due to the delay in servicing of interest/instalments in CECL/GECL. The rating continues to draw strength from the experience of its promoters. However, the rating is constrained by elongated conversion cycle, intense competition in the industry, delay in interest and instalment servicing.
Going forward, the company’s ability to timely service its debt obligations will be the key rating sensitivity.
KEY RATING DRIVERSCredit Strengths:
The business is run by family members viz MD and chairman Mr. Gurdeep Singh Anand, directors Ms Jatinder Kaur and Ms Rishipal Singh Anand. The promoters are having around four decades of experience in the industry and have advantage of enjoying long term relationship with customers and suppliers.
Credit Risks:
The conversion cycle of the company is high at 102 days due to high days receivables of 142 in FY20. Historically the receivables have been at higher levels viz 105 in FY18 and 107 in FY19, thus straining the liquidity.
The company faces stiff competition from other numerous large and small players which limits the pricing flexibility of the industry participants and consequently exerts pressure on margins.
There is regular delay in servicing of interest/installments in CC and GECL account.
As per the auditor's report, there is an outstanding amount due on account of income tax related to AY12,13,14 and 15 which has not been deposited till 31.03.2020.
Going forward, the ability of the firm to improve its scale of operations by improving its profitability margins and efficiently manage its liquidity would remain the key rating sensitivities.
Upgrade : The rating may be upgraded in case the revenues and profit show sustained improvement backed by healthy liquidity and servicing of interest and instalments in time and on completion of the curing period.
LIQUIDITY INDICATORS - Stretched
Liquidity of the company is Stretched as there are delays in servicing of the interest/instalments in CC and GECL accounts. Liquidity stress is due to high conversion cycle of 102 days.
ABOUT THE ENTITY
ASP Sealing Products Ltd was incorporated on 1st May, 1989 in the name of Anand SAIAG Pvt. Ltd. Thereafter on 07/11/1994 it was converted into closely held Public Limited Company and on 19.08.1996 the name of the Company was changed to ASP Sealing Products Ltd (ASP). The registered office of the company is in New Delhi. The manufacturing facility is in Gajraula, U.P. Regional offices are located in Kolkata, Mumbai, Chennai & Pune. The company is manufacturing items like EPDM door seals rubber profiles for Automobiles Industries and industrial hoses. Presently, Mr. Gurdeep Singh Anand, Mrs. Jatinder Kaur Anand and Mr. Rishipal Singh Anand are the Directors.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 72.92 | 90.00 |
EBITDA | Rs.Crs. | 7.13 | 6.83 |
PAT | Rs.Crs. | 0.99 | 0.95 |
Tangible Net Worth | Rs.Crs. | 28.71 | 26.54 |
Total Debt/Tangible Net Worth | Times | 0.75 | 0.86 |
Current Ratio | Times | 1.11 | 1.39 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 19.75 |
BWR D
(Downgrade) |
08May2020 |
BWR BB Stable
(Reaffiirm) |
NA |
NA
|
16Feb2018 |
BWR BB Stable
(Assignment) |
Non Fund Based | ST | 4.16 |
BWR D
(Downgrade) |
08May2020 |
BWR A4+
(Reaffiirm) |
NA |
NA
|
16Feb2018 |
BWR A4+
(Assignment) |
Grand Total | 23.91 | (Rupees Twenty Three Crores and Ninety One 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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Shweta Tandon Rating Analyst Board : +91 11 2341 2232 shweta.t@brickworkratings.com |
Hari Kishan Yadav Associate Director - Ratings hari.ky@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 | State Bank Of India (SBI) | Cash CreditSanctioned | 16.00 | _ | 16.00 | |
2 | State Bank Of India (SBI) | GECLSanctioned | 2.50 | _ | 2.50 | |
3 | State Bank Of India (SBI) | CECLSanctioned | 1.25 | _ | 1.25 | |
4 | State Bank Of India (SBI) | Letter of CreditSanctioned | _ | 4.00 | 4.00 | |
5 | State Bank Of India (SBI) | Credit Exposure Limit (CEL)Sanctioned | _ | 0.16 | 0.16 | |
Total | 19.75 | 4.16 | 23.91 | |||
TOTAL (Rupees Twenty Three Crores and Ninety One lakhs Only) |
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