RATING RATIONALE
24Nov2021

Texmo Pipes & Products Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 122.20 Crs. of Texmo Pipes & Products Ltd (TPPL or the Company).

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(07 Dec 2020)
Present
Fund Based 63.61 66.20 Long Term BWR BBB /Stable
Reaffirmation
BWR BBB + /Stable
Upgrade
Non Fund Based 63.77 56.00 Short Term BWR A3
Reaffirmation
BWR A2
Upgrade
Grand Total 127.38 122.20 (Rupees One Hundred Twenty Two Crores and Twenty 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

The ratings upgrade reflects the continued improvement in the business and financial performance of the company in FY21 despite Covid-19 induced disruptions and expectation of steady improvement over the medium term, supported by fair revenue growth and effective working capital management. The ratings also factor in the enhanced financial risk profile of the company, marked by a sustained improvement in net worth and improvement in profitability leading to improved capital structure and debt protection metrics over the past few years including in H1FY22.

The ratings, however, are constrained by the company’s relatively moderate scale of operations though growing year on year. The ratings are further constrained by customer concentration in revenue, susceptibility to volatility in raw material prices, and exposure to intense competition. BWR has taken note of the planned capex plan of Rs. 24.46 Crs by the company.

 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has factored in the company’s standalone business and financial risk profile to arrive at the rating. Reference may be made to the Rating Criteria hyperlinked below. BWR has taken on record the consolidated financials.

RATING SENSITIVITIES

Positive Factors

Negative Factors

LIQUIDITY INDICATORS - Adequate

The liquidity position of the company stands adequate in relation to the size of the business. As of 30-Sep-2021, cash on hand stood at Rs. 0.03 Crs and investment in fixed deposits stood at Rs. 9.7 Crs (fully pledge). The net cash accruals are expected to be adequate vis-a-vis the debt repayment obligations of ~Rs. 2.91 Crs and ~Rs. 5.7 Crs in fiscals 2022 and 2023.  Utilised Fund Bank limits were in the range of 50-60%, on average, in the 12 months ending Sep 2021. Further, with 76.86% of non-fund based limits utilised as on 30 Sep, 2021, the company has adequate cushion available in terms of working capital limits.

ABOUT THE ENTITY

TPPL is a public limited company and was incorporated on 3rd July 2008. TPPL is engaged in manufacturing of PVC Pipes, UPVC Casing Pipes, Plumbing Pipes, SWR Pipes, HDPE Pipes, Permanently Lubricated Pipes and HDPE Sprinkler Pipes, Moulded Fittings, etc. Manufacturing facility of TPPL is located in Burhanpur, Madhya Pradesh. Mrs. Rashmi Devi Agrawal is the Chairperson & Whole Time Director of the company. Mr. Sanjay Kumar Agrawal is the Managing Director of the company. TPPL is listed on NSE & BSE. TPPL has a wholly owned subsidiary Tapti Pipes and Products Limited FZE, UAE which is debt free and is non-operational.

 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 421.66 327.95
EBITDA Rs.Crs. 29.04 22.55
PAT Rs.Crs. 11.23 4.33
Tangible Net Worth Rs.Crs. 106.71 91.38
Total Debt/Tangible Net Worth Times 0.26 0.55
Current Ratio Times 1.80 1.47
KEY COVENANTS OF THE FACILITY RATED

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


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NA

ANY OTHER INFORMATION

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 66.20
BWR BBB+/Stable
(Upgrade)
03Feb2020
BWR BBB Stable
(Reaffirmation)
29Jan2019
BWR BBB Stable
(Reaffirmation)
NA
NA
NA
NA
07Dec2020
BWR BBB Stable
(Reaffirmation)
NA
NA
NA
NA
Non Fund Based ST 56.00
BWR A2
(Upgrade)
03Feb2020
BWR A3
(Reaffirmation)
29Jan2019
BWR A3
(Reaffirmation)
NA
NA
NA
NA
07Dec2020
BWR A3
(Reaffirmation)
NA
NA
NA
NA
Grand Total 122.20 (Rupees One Hundred Twenty Two Crores and Twenty 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

Satish Jaiprakash Jewani

Ratings Analyst satish.j@brickworkratings.com

Chintan Dilip Lakhani

Director- Ratings chintan.l@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Texmo Pipes & 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.)
1 Bank of Baroda Cash CreditSanctioned 7.00 _ 7.00
2 Bank of Baroda Bank GuaranteeSanctioned _ 7.00 7.00
3 Bank of Baroda Letter of CreditSanctioned _ 10.00 10.00
4 Central Bank of India Letter of CreditSanctioned _ 9.00 9.00
5 Central Bank of India Bank GuaranteeSanctioned _ 5.00 5.00
6 Central Bank of India Cash CreditSanctioned 6.00 _ 6.00
7 Central Bank of India Term LoanSanctioned 1.20 _ 1.20
8 HDFC Bank Term LoanSanctioned 1.10 _ 1.10
9 Punjab National Bank Term LoanSanctioned 3.50 _ 3.50
10 Punjab National Bank Cash CreditSanctioned 7.00 _ 7.00
11 Punjab National Bank Bank GuaranteeSanctioned _ 5.00 5.00
12 Punjab National Bank Letter of CreditSanctioned _ 5.00 5.00
13 State Bank Of India (SBI) Letter of CreditSanctioned _ 10.00 10.00
14 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 5.00 5.00
15 State Bank Of India (SBI) Cash CreditSanctioned 20.00 _ 20.00
16 State Bank Of India (SBI) Common Covid Emergency Line of Credit (CCECL)Sanctioned 2.40 _ 2.40
17 Un tied portion Term LoanProposed 18.00 _ 18.00
18 Un tied portion Letter of CreditProposed _ _ 0.00
Total 66.20 56.00 122.20
TOTAL (Rupees One Hundred Twenty Two Crores and Twenty lakhs Only)
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