RATING RATIONALE
29Nov2021

BSL Ltd.

Brickwork Ratings reaffirms the ratings with change in outlook from Negative to Stable for the Bank Loan Facilities of Rs. 217.28 Crs. of BSL Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(27 Oct 2020)
Present
Fund Based 84.54 90.38 Long Term BWR BBB+/Negative
Reaffirmation and change in Outlook
BWR BBB + /Stable
Reaffirmation and change in Outlook
91.77 89.50 Short Term BWR A2
Reaffirmation
BWR A2
Reaffirmation
Non Fund Based 47.40 37.40 Short Term BWR A2
Reaffirmation
BWR A2
Reaffirmation
Grand Total 223.71 217.28 (Rupees Two Hundred Seventeen Crores and Twenty Eight 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

Brickwork Ratings (BWR) has reaffirmed the long-term rating at BWR BBB+ with a change in the outlook from Negative to Stable and the short-term rating was reaffirmed at BWR A2 for the bank loan facilities of BSL Limited (BSL or the company). The Outlook has been revised to Stable from Negative on account of improving performance over the last few quarters, viz. the average EBITDA and PAT margin is 10.35% and 3.24% simultaneously for the last 3 quarters. The company registered revenue of approximately Rs 202.80 Crs in H1FY22,

The rating reaffirmation continues to factor in the extensive experience of the management, established position of the company as an integrated textile player in India on account of being part of LNJ Bhilwara group, established brand in domestic and exports market, reasonable scale of operations and order book position, besides reasonable debt protection metrics. However, the ratings are constrained by thin profit margins, high gearing, foreign exchange and raw material price fluctuations risk.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has factored in the standalone business parameters and financial risk profile of the trust to arrive at the rating. Reference may be made to the detailed Rating Criteria hyperlinked

 

RATING SENSITIVITIES

Upward : The outlook may be revised to positive or the rating may be upgraded if there is significant improvement in the scale of operations and financial risk profile of the company. 
Downward : BWR may revise the ratings downwards if the company achieves notably lower revenue than expected and deterioration in debt protection metrics and liquidity.  
 

LIQUIDITY INDICATORS - Adequate

The company had cash accruals (profit after tax + depreciation) of Rs 13.53 Crs against current portion of long term debt (CPLTD) of Rs 6.30 Crs in FY21 and the expected cash flows are above Rs 14 Crs against CPLTD of Rs 11.70 Crs for FY22 and debt service coverage ratio(DSCR) is expected to be expected to be above 1.05x for FY22. The working capital utilization is around 80%-90% provides further cushion to the liquidity of the company.

ABOUT THE ENTITY

Incorporated in 1970 at Bhilwara, Rajasthan, BSL Ltd. is engaged in manufacturing a wide range of yarns and fabrics including woollen/worsted yarn, synthetics yarn, blended viscose fabrics,silk fabrics, furnishing and fashion fabrics. The company exports to around 54 countries located primarily in North and South America, Europe, Middle East and the Far East.BSL Ltd. is listed on BSE and NSE.

The Company has currently two wind power plants of 2.4 MW (for outside sales) and 2 MW capacity (for captive use) located in Village Gorera, Jaisalmer and Village Ola, Jaisalmer respectively and generation of wind power contributes around 0.28% of total revenue It has also already installed a 4.17 MW rooftop solar plant at its existing site under OPEX Model. BSL Ltd. is promoted by Mr. L N Jhunjhunwala, Chairman of LNJ Bhilwara group and is managed by Mr. A K Churiwal (Chairman and Managing director). Shri Nivedan Churiwal is the Joint Managing Director, Shri Ravi Jhunjhunwala and Shri Shekhar Agarwal are the other directors. Shri Sushil Jhunjhunwala, Shri A.N. Choudhary, Shri G P Singhal and Smt. Abhilasha Mimani are the independent directors.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 321.42 390.04
EBITDA Rs.Crs. 28.91 29.12
PAT Rs.Crs. 1.36 1.66
Tangible Net Worth Rs.Crs. 78.13 74.84
Total Debt/Tangible Net Worth Times 2.07 2.17
Current Ratio Times 1.22 1.07
KEY COVENANTS OF THE FACILITY RATED

NA


NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

NA

ANY OTHER INFORMATION

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) 2021 (History) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating Date Rating
Fund Based LT 90.38
BWR BBB+/Stable
(Reaffirmation and change in Outlook)
NA
NA
27Oct2020
BWR BBB+Negative
(Reaffirmation and change in Outlook)
11Sep2019
BWR BBB+ Stable
(Reaffirmation)
14Sep2018
BWR BBB+Stable
(Reaffirmation)
Fund Based ST 89.50
BWR A2
(Reaffirmation)
NA
NA
27Oct2020
BWR A2
(Reaffirmation)
11Sep2019
BWR A2
(Reaffirmation)
14Sep2018
BWR A2
(Reaffirmation)
Non Fund Based ST 37.40
BWR A2
(Reaffirmation)
NA
NA
27Oct2020
BWR A2
(Reaffirmation)
11Sep2019
BWR A2
(Reaffirmation)
14Sep2018
BWR A2
(Reaffirmation)
Grand Total 217.28 (Rupees Two Hundred Seventeen Crores and Twenty Eight 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

Raman Thakur

Senior Rating Analyst Board : +91 11 2341 2232 raman.t@brickworkratings.com

Tanu Sharma

Director - Ratings tanusharma@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
BSL 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 Export Import Bank of India Term LoanSanctioned 4.80 _ 4.80
2 IDBI Bank Cash CreditSanctioned 3.50 _ 3.50
3 IDBI Bank Forward ContractSanctioned _ 3.00 3.00
4 IDBI Bank Funded Interest Term LoanSanctioned _ _ 0.00
5 IDBI Bank GECLSanctioned 5.10 _ 5.10
6 IDBI Bank ILC/FLC/BGSanctioned _ 13.00 13.00
7 IDBI Bank PC/PCFCSanctioned _ 23.50 23.50
8 Punjab National Bank PC/PCFCSanctioned _ 27.00 27.00
9 Punjab National Bank ILC/FLC/BGSanctioned _ 12.00 12.00
10 Punjab National Bank GECLSanctioned 10.02 _ 10.02
11 Punjab National Bank Funded Interest Term LoanSanctioned _ _ 0.00
12 Punjab National Bank Forward ContractSanctioned _ 2.50 2.50
13 Punjab National Bank Cash CreditSanctioned 22.00 _ 22.00
14 Punjab National Bank Common Covid Emergency Line of Credit (CCECL) _ _ 0.00
15 State Bank Of India (SBI) Forward ContractSanctioned _ 1.90 1.90
16 State Bank Of India (SBI) Cash CreditSanctioned 20.00 _ 20.00
17 State Bank Of India (SBI) Funded Interest Term LoanSanctioned _ _ 0.00
18 State Bank Of India (SBI) GECLSanctioned 14.38 _ 14.38
19 State Bank Of India (SBI) Term LoanSanctioned 10.58 _ 10.58
20 State Bank Of India (SBI) ILC/FLC/BGSanctioned _ 5.00 5.00
21 State Bank Of India (SBI) PC/PCFCSanctioned _ 39.00 39.00
22 State Bank Of India (SBI) Common Covid Emergency Line of Credit (CCECL) _ _ 0.00
Total 90.38 126.90 217.28
TOTAL (Rupees Two Hundred Seventeen Crores and Twenty Eight lakhs Only)
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