Samata Lok Shikshan Samiti Trust

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.13.65 Crs. of Samata Lok Shikshan Samiti Trust

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Term Loan - Sanctioned Term Loan - Out-standing	06.54 07.11	Long Term	BWR B + (Stable)
Sub Total	13.65
Grand Total	13.65	(Rupees Thirteen Crores and Sixty Five lakhs Only)

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

BWR believes that Samata Lok Shikshan Samiti Trust 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:

• Experience and reputation of the trustees :

  Mr. Bhojaraj Ramchandrappa Patil (B. R. Patil), chairman and founder of the trust having 34 years of experience, is an Indian politician from the state of Karnataka. He is a three-term member of the Karnataka Legislative Assembly representing Aland Taluka in Kalaburgi District and was also a Member of Legislative Council. Mr. Ramchandra K Patil is the secretary of the trust having 14 years of experience. The other trustee Mr. Vibhakarao Patil, Mr. Suryakant Guddagi, Mr. Neelkantrao Deshmukh, Mr. Satyajit Patil have immense experience. The extensive experience and reputation of the trustees will continue to support the trust risk profile.

• Diversified and extended benefits of institutions :

  The trust owns 4 schools, 3 pharmacy colleges, one bachelor's degree college and one college offering PU courses. The student to faculty ratio of all schools combined is 20, that of PU course college is 35, for degree college is 22 and pharma college have a ratio of 12. The institutions provide various facilities to students such as separate girls and boys hostel, transportation, broadband facility, competitive exam coachings such as NEET and JEET, sports, arts facilities, etc. The trust owns the only CBSE affiliated school in Aland Taluka. The pricing structure of the institutions is based to target the students based in rural areas. These objectives of the trust extend the benefits to the younger generation and improve the quality of education as well as helps to generate profitability for the trust to manage the operations effectively.

Credit Risks:

• Moderate scale of operations :

  Despite of having an operational track record of more than two decades and having a number of diversified institutions, the scale of operations remains to be moderate with total operating income of Rs. 4.73 Crs. in FY18 and 5.85 Crs. in FY19.

• Susceptibility to regulatory changes and intense competition in the education sector: :

  The education sector is highly regulated in India. The trust has to comply with specific operational and infrastructure norms laid down by regulatory bodies and other state educational authorities. Any non-compliance will result in cancellation of affiliation, license, etc. leading to loss of reputation and revenue for the trust.

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).

LIQUIDITY POSITION

Liquidity: Adequate

The corpus of the trust has been increasing Y-o-Y and is at Rs. 6.29 Crs. in FY19 as against Rs. 5.31 Crs. The trust has set aside sufficient funds for the capital work in progress. The net excess of income over expenditure for the fiscal ended 31st March 2019 stood at Rs. 0.97 Crs. which was sufficient to cover the interest and finance costs which is also reflected in ISCR of 2.24 times. 

PROFILE

Samata Lok Shikshan Samiti Trust was founded in 1998 by Mr. B.R. Patil. The trust runs various educational institutions like state board schools and CBSE affiliated schools offering classes from 1st standard to 10th standard and also nursery education, colleges offering PU courses, bachelor degrees, and pharma degrees. The trust in total owns 12 educational institutions.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	5.85	4.73
EBITDA	Rs.Crs.	1.76	0.81
PAT	Rs.Crs.	0.97	0.98
Tangible Net Worth	Rs.Crs.	6.29	5.31
Total Debt/Tangible Net Worth	Times	1.37	1.38
Current Ratio	Times	0.00	0.00

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2020)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2019	2018	2017
Fund Based
1	Term Loan - Sanctioned Term Loan - Out-standing	Long Term	06.54 07.11	BWR B+ (Stable)	NA	NA	NA
Total			13.65	(Rupees Thirteen Crores and Sixty Five 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.

Hyperlink/Reference to applicable Criteria :

• General Criteria
• Approach to Financial Ratios

For More Information Contact:

Analytical Contacts	Investor Contacts
Umang Pardasani Ratings Analyst B : +91 80 4040 9940 Ext : 370 umang.p@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	Term Loan - Sanctioned	6.54	_	6.54
2	Term Loan - Out-standing	7.11	_	7.11
Total				13.65
TOTAL (Rupees Thirteen Crores and Sixty Five lakhs Only)