Brickwork Ratings reaffirms the long- term rating at BWR BB+ and short- term rating at BWR A4+, for the Bank Loan Facilities of Rs. 26.09 Crs. of Lamina Suspension Products Ltd
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (16 Mar 2021) |
Present | ||
Fund Based | 17.34 | 17.34 | Long Term |
BWR BB+ /Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
Non Fund Based | 8.75 | 8.75 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
Grand Total | 26.09 | 26.09 | (Rupees Twenty Six Crores and Nine lakhs Only) |
Brickwork Ratings has reaffirmed the Long- term rating of Lamina Suspension Products Ltd. for Bank loan facilities at BWR BB+(Stable)/ and short term rating to A4+. Brickwork Ratings(BWR) has essentially relied on the audited financial statements of Lamina Suspension Products Ltd. (LSPL or the company) upto FY21, projections upto FY23 publicly available information and information​/​clarifications provided by the company’s management and its bankers to arrive at the present ratings.
The rating continues to factor in the longstanding experience of promoters in auto components industry with management expertise remaining intact. The rating further draws strength from improving profit margins, current ratio, scale of operations and a moderate capital structure. The rating is partially offset by coverage ratio and high gearing ratio.
Going forward the ability of the company to improve its margins, scale of operations, working capital cycle, gearing, along with strengthening its overall financial risk profile would be its key rating sensitivity.
KEY RATING DRIVERSCredit Strengths:
Lamina Suspensions is promoted by Mr N.V Hegde, Mr. T R Shenoy and Mr Guruprasad Adyanthaya, who are in company as managing director, Technical Director and Sales Director respectively. Promoters have around 4 decade of experience in the auto components industry with management expertise remaining intact.
The current ratio of the company stands at 1.44X in FY21 & is expected to be 1.47X in FY22. NPM is at moderate level at 1.31% in FY21 than 1.54% in FY20 & is expected to be 1.13% in FY22. OPM is at adequate level 8.17% in FY21 & expected 7.40% in FY22. TNW is increasing every year i.e. Rs 8.20 Crs in FY21 from Rs 7.92 Crs in FY20 & is expected Rs 9.12 Crs in FY22.
The promoters of the company have been introducing funds in form of unsecured loans. Unsecured loans in tune of Rs 19cr have been subordinated to the bank leading to a moderate analyzed Tangible Net Worth of Rs 27.20cr resulting in a low gearing of 0.74X in FY21 forming a moderate capital structure.
PAT has increased to Rs 1.03 Crs in FY22 as on Dec 21 than Rs 0.98 Crs in FY21.
Revenue increased by 1.84% in FY22 to Rs 75.01 Crs for 11 months vis-a-vis Rs 74.86 Crs in FY21.
DSCR has declined to 1.07X in FY21 than 1.11X in FY20, which is at a low level & projected 0.94 times in FY22. ISCR has remained in the range of 1.35X in FY21 & FY20 & projected 1.34 times in FY22.
Gearing ratio (Total Debt/TNW) is at higher level 4.76 in FY21 v/s 5.16 in FY20 & is expected to decline 4.00 in FY22. TOL/TNW is at higher level 5.67 in FY21 v/s 5.11 in FY20 & is expected to decrease 4.65 in FY22.
Going forward the ability of the company to improve its margins, scale of operations, maintain its working capital cycle, gearing, along with maintaining its overall financial risk profile would be its key rating sensitivity.
Upward factors
LIQUIDITY INDICATORS - Adequate
Established in 1978, Lamina Suspension Product Ltd is leaf spring manufacturer based in Mangalore, Karnataka. In 2004 it started manufacturing of Parabolic Springs and Air links for Air Suspensions which find use in trucks, buses and other commercial vehicles. LSPL has a subsidiary co Lamina Foundries Ltd and a group company Lamina International. LSPL’s focuses on replacement market of automobile industry, both domestically and internationally. With a production capacity of 12000 tpa, company’s plant has Parabolic Rolling Machine,Induction End Heating Furnace,Heat Treatment Line,Stress & Shot Peening Machine,Fatigue Testing Machine, and Fully equipped Laboratory, so as to cater requirements of end to end production process. Complementing Lamina's product base is its fully automated foundry unit started near Mangaluru in 1983 with a production capacity of 19200 tpa. It manufactures grey iron and alloy iron casting for industrial applications.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 74.86 | 73.29 |
EBITDA | Rs.Crs. | 6.11 | 6.66 |
PAT | Rs.Crs. | 0.98 | 1.13 |
Tangible Net Worth | Rs.Crs. | 8.20 | 7.92 |
Total Debt/Tangible Net Worth | Times | 4.76 | 5.16 |
Current Ratio | Times | 1.44 | 1.54 |
Facilities | Current Rating (2022) | 2021 | 2020 | 2019 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 17.34 |
BWR BB+/Stable
(Reaffirmation) |
16Mar2021 |
BWR BB+ Stable
(Reaffirmation) |
03Jan2020 |
BWR BB+ Stable
(Upgrade) |
NA |
NA
|
Fund Based | ST | 0.00 |
NA
|
16Mar2021 |
BWR A4+
(Reaffirmation) |
03Jan2020 |
BWR A4+
() |
NA |
NA
|
Non Fund Based | ST | 8.75 |
BWR A4+
(Reaffirmation) |
16Mar2021 |
BWR A4+
(Reaffirmation) |
03Jan2020 |
BWR A4+
() |
NA |
NA
|
Grand Total | 26.09 | (Rupees Twenty Six Crores and Nine 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 | |
---|---|
Suman Prabitra Paul Ratings Analyst suman.p@brickworkratings.com |
Sushil Kumar Chitkara Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@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 | HDFC Bank | Term LoanSanctioned | 2.51 | _ | 2.51 | |
2 | HDFC Bank | Term LoanSanctioned | 4.00 | _ | 4.00 | |
3 | HDFC Bank | Cash CreditSanctioned | 10.83 | _ | 10.83 | |
4 | HDFC Bank | Bank GuaranteeSanctioned | _ | 1.25 | 1.25 | |
5 | HDFC Bank | Letter of CreditSanctioned | _ | 7.50 | 7.50 | |
Total | 17.34 | 8.75 | 26.09 | |||
TOTAL (Rupees Twenty Six Crores and Nine lakhs Only) |
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