RATING RATIONALE
04Nov2019
Aggarwal Laminates
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.00 Crs. of Aggarwal Laminates
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | |
|---|---|---|---|---|
| Grand Total | 7.00 | (Rupees Seven Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK
BWR believes that Aggarwal Laminates 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 DRIVERSCredit Strengths:
- Family-owned business :
The entire operations of the firm are managed by the members of the same family thereby ensuring smooth functioning of operations.
Credit Risks:
- Limited experience in the line of business :
The Aggarwal family is a second-generation entrepreneur. They have previously engaged in the business which was allied and/or ancillary to the manufacturing of laminates. Thus they have some experience in the line of business.
- New project :
The business activities have commenced on 01st April 2019, and 2019-20 is the ist year of operations. The business is in the initial phase of its life cycle. It needs to be seen if the projected revenue and profit figures are achieved.
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).
RATING SENSITIVITIES
Going forward, the ability of the entity to improve revenue & profitability margins, manage liquidity, infuse capital, achieve projected financials and timely repayment of debt obligations would be key rating sensitivities.
Positive: The rating outlook may be revised to 'Positive' in case the revenues, profit, and liquidity position show sustained improvement.
Negative: The rating may be downgraded if there is any deterioration in the financial position and capacity utilisation.
ABOUT THE ENTITYThe partnership deed of M\S Aggarwal Laminates was executed on 01.07.18 with 3 partners namely Aarti Aggarwal, Ruchi Aggarwal, and Charu Aggarwal with an objective of manufacturing laminates of all sizes & thickness. On 17.04.19 the deed was altered to admit Ravinder Kumar as a partner. The registered office and manufacturing unit are located in Pathankot, Punjab. The commercial production has begun in April 2019. The total manufacturing capacity of the plant is 5400 MTPA and the estimated capacity utilization is 60%, 70%, 80% and 90% in the 1st (FY19-20), 2nd, 3rd and 4th year respectively. The factory will be operational 18 hours\day, 300 days\year, currently employing 65 employees across all categories. Actual sales figures for Q1 FY19-20 is Rs.3.46 crs.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA ANY OTHER INFORMATION RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended) 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.
| Analytical Contacts | |
|---|---|
|
Chaitanya T. Ratings Analyst Board : + 91 22 2831 1426/6745 6666 chaitanya.t@brickworkratings.com |
Satvinder Kumar Gakhar Associate Director - Ratings Board : +91 11 2341 2232 satvinder.g@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | ||
|---|---|---|---|---|---|---|
| 1 | Cash CreditSanctioned | 1.00 | _ | 1.00 | ||
| 2 | Term LoanSanctioned | 6.00 | _ | 6.00 | ||
| Total | 7.00 | |||||
| TOTAL (Rupees Seven Crores Only) | ||||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
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