Aditya Steel Rolling Mills Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.26.36 Crs. of Aditya Steel Rolling Mills Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Cash Credit - Sanctioned Term Loan - Out-standing	17.00 00.36	Long Term	BWR B (Stable)
Sub Total	17.36
Non-Fund Based
Bank Guarantee - Sanctioned	09.00	Short Term	BWR A4
Sub Total	09.00
Grand Total	26.36	(Rupees Twenty Six Crores and Thirty Six lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I
Note: Conduct of account is satisfactory. RATING ACTION / OUTLOOK : Stable

BWR believes that Aditya Steel Rolling Mills 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 revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

• Locational Advantage :

  The company/Firm is located in Visakhapatnam cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.

• Management Experience :

  The directors are well experienced.

• Company’s Existence :

  The company is in existence for 25 years and has seen complete business cycles.

Credit Risks:

• Competition in the Industry :

  Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability.

• Liquidity Crunch :

  Working capital utilisation is 100%. Adhoc limit was also enjoyed by the company which indicates there is liquidity crunch.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

PROFILE

Aditya Steel Rolling Mills Pvt. Ltd (ASRMPL) is a prominent steel product manufacture which is incorporated on 6th September 1994. The company is situated in Visakhapatnam, Andhra Pradesh. The company has sustained the operations since 1994. It is a manufacturing as well as trading unit which manufactures and trades Mild Steel bars,TMT bars, Squares, Rounds of different Diameters and also Wire Rods.It procures 80-90% of its raw materials and tradable goods from Vizag Steel Plant. The company is one of the 25 authorised dealers of Vizag Steel’s TMT bars and other steel intermediaries in Vishakhapatnam. Suresh Kumar Khemka is the Managing Director and Pradeep Kumar Khemka is the other director of the company.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Provisional)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	359.22	261.34
EBITDA	Rs.Crs.	6.83	5.70
PAT	Rs.Crs.	0.61	0.39
Tangible Net Worth	Rs.Crs.	10.21	9.61
Total Debt/Tangible Net Worth	Times	4.53	5.57
Current Ratio	Times	1.85	1.68

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
Fund Based
1	Cash Credit - Sanctioned Term Loan - Out-standing	Long Term	17.00 0.36	BWR B (Stable)	NA	NA	NA
Non-Fund Based
2	Bank Guarantee - Sanctioned	Short Term	9.00	BWR A4	NA	NA	NA
Total			26.36	(Rupees Twenty Six Crores and Thirty Six lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

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.

For More Information Contact:

Analytical Contacts	Investor Contacts
Rasmita Mishra Ratings Analyst B : +91 023310161 rasmita.m@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K Nagaraj Associate Director - Ratings B : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Bank Guarantee - Sanctioned	_	9.00	9.00
2	Cash Credit - Sanctioned	17.00	_	17.00
3	Term Loan - Out-standing	0.36	_	0.36
Total				26.36
TOTAL (Rupees Twenty Six Crores and Thirty Six lakhs Only)

Note: Conduct of account is satisfactory.