Shrijee Lifestyle Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 143.61 Crs. of Shrijee Lifestyle Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	77.61	Long Term	BWR BBB - /Positive Assignment
	64.00	Short Term	BWR A3 Assignment
Non Fund Based	2.00	Short Term	BWR A3 Assignment
Grand Total	143.61	(Rupees One Hundred Forty Three Crores and Sixty One 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

BWR has assigned the long-term rating of BWR BBB-/Positive and short-term rating of BWR A3 for the bank loan facilities of Shrijee Lifestyle Pvt. Ltd.

The rating draws strength from the extensive experience of the promoters in the textile business, a moderate financial risk profile, an established business profile with diversified product mix and adequate liquidity. However, the rating is constrained on account of stretched working capital cycle, the presence in a highly fragmented and competitive industry, and susceptibility of profitability to volatile Raw Material prices.

The rating outlook has been assigned as "Positive" as BWR believes that Shrijee Lifestyle Pvt. Ltd.’s business risk profile will improve, going by the infusion of unsecured loan as quasi-capital and the new digital printer has acquired as the company has begun manufacturing higher-value fabrics such as digitally printed fabrics, linen fabrics, and linen-blended fabrics. The rating outlook may be revised to 'Stable' if the revenues go down, profit margins show lower than expected figures, or with the decrease in debt protection metrics.

KEY RATING DRIVERS

Credit Strengths:

• Widely experienced directors and management team of the company :

  The leadership team at Shrijee Lifestyle Pvt. Ltd. is comprised of experienced professionals with diverse backgrounds and expertise. Mr. Brijendra Kagzi, the Managing Director, has been associated with the Company for over 3 decades since 1992. His vast international experience provided a strong marketing base to the Company. He was instrumental in setting up Shrijee Design Centre to develop designs and Forecast trends. Abhay Kagzi, Director, is Young and dynamic with a Master’s in Business Innovation from the UK. He currently heads The fast growing Digital Printing Division and is well-versed in this technology. Mr. Purshottam Das Saraf, another Director, has over 5 decades of experience in the textile industry.

  The directors are actively associated with the production and marketing of the products. They are supported by a blend of highly qualified and well-experienced technicians, to ensure the products meet the international standards of processing and support the various operations.

• Moderate financial risk profile :

  Overall financial risk profile continued to be moderate with overall gearing stood at 1.32 times in FY24 and 1.12 times in FY25. TOL/TNW stood moderate at 2.03 times in FY24 and 1.65 times in FY25. The Interest coverage stood comfortable at 1.75 times in FY25 and is expected to improve to 1.96 times in FY26. Liquid cash and equivalents (Rs. 2.24 Cr) provide immediate coverage for short-term needs. This strong liquidity buffer, including significant promoter support in the form of unsecured loans, enhances the company’s financial flexibility and its ability to meet obligations.

• Established business profile with diversified product mix :

  SLPL is primarily engaged in processing/designing/printing and exports of Fabrics. It processes/prints fabrics in ladies wear (blouse material/dress material/salwar suits) as well as high-end shirting fabrics in cotton/blended varieties. Shrijee derives its competitive edge through expertise in printing (including digital printing) of processed fabrics. It also sells fabrics under the name “Shrijee. Shrijee’ s competitive edge in designing and printing helps it to cater to more clients with a differentiated product mix and earn better realizations. The company also has digital printing facilities, which have better quality output and is of high demand in the market.

Credit Risks:

• Stretched working capital cycle :

  SLPL procures fabrics and processes/prints it and sells it in the domestic and export markets. To ensure availability and visibility to the domestic and export customers, the company has to maintain stock to meet the demand in a timely manner. The operating cycle has increased from 173 days in FY23 to 257 days in FY24 and to 407 days in FY25.

• Intense Competition :

  The textile industry is highly fragmented and there is significant competition among players; as a result, their bargaining power is moderate and thus, resulting in thin profit margins.

• Susceptibility of profitability to volatile Raw Material prices :

  SLPL's profitability is highly susceptible to volatility in fabric prices, driven by the inherent cyclicality of the textile industry and fluctuating raw material costs. The company remains vulnerable to changes in government policies, such as Minimum Support Price (MSP), import-export duties, and market regulations, which can impact procurement costs and overall margins. Any adverse policy changes or price fluctuations could strain profitability, affecting cost competitiveness and working capital management.

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Going forward, the ability of the company to improve the scale of operations and profitability, maintain a strong liquidity position, effectively manage working capital, and strengthen the overall credit profile would be the key rating sensitivities.

Positive :

• Steady increase in turnover or profitability, leading to increased cash accruals. Growth in operating income to more than Rs. 350.00 Crs with the operating margin (OPM) rising above 15% and the net margin (NPM) exceeding 2% on a sustained basis
• Maintenance of an optimum capital structure, increase in liquidity position, and TNW on a continuous basis, while a reduction in Total Debt/TNW below 1.0x would indicate lower leverage dependency.

Negative: 

• Decline in revenue, a drop in net margins below 0.50% and deterioration of the financial position of the Company, including deterioration in liquidity, leverage, and TNW on a continuous basis, while an increase in Total Debt/TNW above 2.0x would indicate higher leverage risk.
• Delayed payments of its debt obligations.

LIQUIDITY INDICATORS - Adequate

• The company maintained a cash and bank balance of Rs 2.24 Crores In FY25,
• The average utilization of the cash credit facility over the past 12 months stood at a moderate 80.40%.
• Net Cash accruals stood at Rs.11.17 Crs in FY25(Provisional) and are projected to be at Rs.14.32 Crs in FY26 against CPLTD of Rs. 11.05 Crs in FY25 & Rs. 8.56 Crs in FY26.
• The Debt Service Coverage Ratio (DSCR) is reasonable at 0.99 times in FY25 and is projected to be at 1.11 times in FY26.
• The Interest Service Coverage Ratio (ISCR) remained comfortable at 1.72 times in FY25 and is projected to be at 1.96 times in FY26.
• Additionally, the current ratio stood at an adequate 1.44 times, indicating a stable liquidity position.
• Total Debt/TNW remained comfortable at 1.12 times.

ABOUT THE ENTITY

Shrijee Lifestyle Pvt. Ltd. (SLPL) is a renowned name in the textile industry with a legacy that began in 1944. Originally incorporated as M/s Parekh Brothers Pvt. Ltd., the company was acquired by Shri Deshbandhu Kagzi in the 1970s. Under his visionary leadership, the company expanded its footprint, becoming a leader in blouse fabrics, particularly known for its 2x2 Rubia. The baton was later passed to his son, Brijendra Kagzi, who further expanded the company’s reach both domestically and internationally, into markets like the UK, Europe, the Middle East, and Latin America.  Shrijee is primarily engaged in processing/designing/printing of Fabrics. Shrijee derives its competitive edge through expertise in designing and printing (including digital printing) of processed fabrics. It has its processing, printing & garmenting facility at MIDC Dombivli, Mumbai.

Shrijee is recognized for its quality, consistency, and innovation in shirting, women’s wear, and kids' wear, offering value-added and digitally printed fabrics. The company’s in-house brands include Shrijee, Avant Moda, Cranberry, Gizanni

KEY COVENANTS OF THE FACILITY RATED

• The Unsecured loan of Rs. 24.89 Crs is subordinate to the bank and cannot be withdrawn during the currency of the loan.
• The terms of sanction include standard covenants normally stipulated for bank loan facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CARE	CARE has downgraded the rating to CARE BBB-/Stable/A3 under Issuer Not Cooperating Category on account of a lack of information for monitoring of the rating.	28Feb2025

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	77.61	BWR BBB-/Positive (Assignment)	NA	NA	NA	NA	NA	NA
Fund Based	ST	64.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	2.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		143.61	(Rupees One Hundred Forty Three Crores and Sixty One lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Manufacturing Company

Analytical Contacts
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com	Niraj Kumar Rathi Director Ratings niraj.r@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com	Customer Support | CustSupport@brickwrokratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Canara Bank	Term Loan - Out-standing	11.53	_	11.53	Simple##
2	Canara Bank	Cash Credit - Sanctioned	56.00	_	56.00	Simple##
3	Canara Bank	Forward Contract - Sanctioned	_	2.00	2.00	Simple##
4	Canara Bank	GECL - Out-standing	10.08	_	10.08	Simple##
5	Canara Bank	EPC/ PCFC/ FBP/ PSFC - Sanctioned	_	64.00	64.00	Simple##
Total			77.61	66.00	143.61
TOTAL (Rupees One Hundred Forty Three Crores and Sixty One 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.