Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 40.00 Crs. of Shri Anant Syntex Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (03 Jun 2020) |
Present | ||
Fund Based | 31.42 | 39.00 | Long Term |
BWR BB+/Stable
Assignment |
BWR BB +
/Stable Reaffirmation |
Non Fund Based | 0.50 | 1.00 | Short Term |
A4+
Assignment |
BWR A4 +
Reaffirmation |
Grand Total | 31.92 | 40.00 | (Rupees Forty Crores Only) |
BWR reaffirms the rating as BWR BB+(Stable)/ A4+ assigned to Shri Anant Syntex.
The rating draws strength from company old existence, management experience and Client relations also moderate financial risk profile . However, the rating is constrained by Stretched Liquidity, Limited Price Flexibility, with profits exposed to volatility in Yarn Price and High competition. BWR believes that Shri Anant Syntex Pvt. Ltd. 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 there is a deterioration in financial risk profile. KEY RATING DRIVERSCredit Strengths:
The company is in existence since 1986 and the management comprises of experienced promoters who have decades of experience in the textile Industry. The promoters have long term business associations with its clients, both suppliers and customers.
The total revenues increased by 9.45% yoy from Rs.95.35 crs in FY19(A) to Rs.104.37 crs in FY20(A). The total revenues declined by 12.48% yoy from Rs.104.37 crs in FY20(A) to Rs.91.34 crs in FY21(P). The gross sales generated till 31.08.2021 is Rs.24 crs in FY22. The tangible networth have shown improvement to Rs.26.19 crs in FY20 (A) from Rs.24.29 crs in FY19 (A). ISCR and DSCR is at 2.31x and 1.18x in FY20(A).ISCR deteriorated from 2.33x in FY19(A) to 2.31x in FY20(A) and DSCR improved to 1.18x in FY20(A) from 1.11x in FY19(A). Net Profit Margin decreased to 1.81% in FY20(A) from 1.96% in FY19(A) and Operating Profit Margin increased to 11.26% in FY20(A) from 10.36% in FY19(A). The current ratio increased to 1.36x in FY20(A) from 1.26x in FY19(A)
The liquidity metrics of the company are on a stagnant level as the CC utilization of the company is above 92.40% for last 6 months.
Any adverse movement in the price of raw materials could have an adverse impact on the company’s margins.
Shri Anant Syntex may expose high risk due to intense competition from the existing major players, local and entry barriers in the textile manufacturing sector. Intense competition reduces the pricing power of the industry players.
Going forward, the ability of the company to improve its revenues and Debt protection metrics would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and profit margins going forward.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the company including Debt protection metrics and current ratio.
LIQUIDITY INDICATORS - Adequate
1. Sunford Synthetics Pvt. Ltd, Perfect Infosys Pvt. Ltd., Plaza tex India Pvt. Ltd. are group companies of Shri anant syntex and these firms have no business transaction with each other.
2. Long term borrowings of Rs.28.49 crs in FY20 comprises secured loans of term loans from Punjab National Bank of Rs.9.89 crs, Vehicle Loan of Rs.0.04 crs. The unsecured loans from family and friends Rs. 13.81 crs. and from companies Rs. 4.75 crs. In FY 20 entity has cash surplus of Rs.6.66 crs and CPLTD of Rs.2.21 crs in FY20(A).
2. Cash and cash equivalent in FY21(P) is Rs.0.95 crs.
3. ISCR and DSCR is at 2.31x and 1.18x in FY20(A). ISCR and DSCR is at 2.15x and 1.56x in FY21(P).
4. The current ratio is at 1.36x in FY20(A) and 1.41x in FY21(P).
5. The conversion cycle is at 61 day in FY20(A) and 127 days in FY21(P).
6. There is around 92.19% average limit Utilization of CC limit for the last six months i.e. from March 2021 to August 2021.
Shri Anant Syntex Limited established as a private limited firm in May 1986, now converted to a Limited Company since May 1997 has its registered office in Charbhujanath, L.N.T. Road, Bhilwara, Rajasthan. The firm is currently managed by three directors namely Mr. Anil Soni, Mr. Sunil Soni and Mr. Satvik Soni. The Company has two divisions. The company indulges in Weaving & Processing of fabrics & in Trading of the processed fabrics. One Unit is engaged in processing & dyeing of cloth on job work basis and Second unit is engaged in manufacturing of Fabrics, both of which units are located in Bhilwara, Rajasthan. The processing capacity of the manufacturing facility is 437.50 Lacs Mtrs. per Annum.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 104.37 | 95.35 |
EBITDA | Rs.Crs. | 11.76 | 9.87 |
PAT | Rs.Crs. | 1.89 | 1.87 |
Tangible Net Worth | Rs.Crs. | 26.19 | 24.29 |
Total Debt/Tangible Net Worth | Times | 1.79 | 1.89 |
Current Ratio | Times | 1.36 | 1.26 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 39.00 |
BWR BB+/Stable
(Reaffirmation) |
03Jun2020 |
BWR BB+Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
Non Fund Based | ST | 1.00 |
BWR A4+
(Reaffirmation) |
03Jun2020 |
A4+
(Assignment) |
NA |
NA
|
NA |
NA
|
Grand Total | 40.00 | (Rupees Forty 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 CriteriaAnalytical Contacts | |
---|---|
Vishesh Phogaat Ratings Analyst vishesh.p@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@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 | Punjab National Bank | Cash CreditSanctioned | 10.00 | _ | 10.00 | |
2 | Punjab National Bank | Cash CreditSanctioned | 9.50 | _ | 9.50 | |
3 | Punjab National Bank | Term LoanSanctioned | 14.16 | _ | 14.16 | |
4 | Punjab National Bank | GECLSanctioned | 5.34 | _ | 5.34 | |
5 | Punjab National Bank | Inland Letter of GuaranteeSanctioned | _ | 1.00 | 1.00 | |
Total | 39.00 | 1.00 | 40.00 | |||
TOTAL (Rupees Forty Crores Only) |
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