RATING RATIONALE

27Feb2026

Sri Ayyappa Raw and Boiled Rice Mill

Brickwork Ratings reaffirms the long-term and short-term ratings for the Bank Loan Facilities of Rs. 34.00 Crs. of Sri Ayyappa Raw and Boiled Rice Mill

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (26 Feb 2025)	Present
Fund Based	27.00	32.00	Long Term	BWR BB /Stable removal from ISSUER NOT COOPERATING* category/Upgraded	BWR BB /Stable Reaffirmation
Non Fund Based	2.00	2.00	Short Term	BWR A4+ removal from ISSUER NOT COOPERATING* category/Upgraded	BWR A4 + Reaffirmation
Grand Total	29.00	34.00	(Rupees Thirty Four Crores 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

Brickwork Ratings (BWR) reaffirms the long-term and short-term ratings at “BWR BB/Stable” and “BWR A4+” for the rating of the credit facilities availed from the lender. The ratings assigned for the bank facilities of Sri Ayyappa Raw and Boiled Rice Mill continue to drive strength from experienced partners and management, achievable profitability, stretched liquidity and moderate financial risk profile of the firm and BWR has relied upon the FY 24, FY 25 Audited.

The rating outlook has been assigned as "Stable" as BWR believes that Sri Ayyappa Raw and Boiled Rice Mill 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 revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

KEY RATING DRIVERS

Credit Strengths:

Company Existence and Experienced partners :
The firm has been in existence for more than 30 years and has experienced complete business cycles, with the partners possessing extensive experience in the industry.

Sri Ayyappa Raw and Boiled Rice Mill is a partnership firm comprising of nine partners, with Mr. Sathi Venkata Reddy serving as the Managing Partner having over 35 years of experience in the rice industry. All the other partners are having more than a decade of experience in the field of rice mill business. Sathi Srinivasa Reddy, Sathi Adi Reddy are some of the partners of Sri Ayyappa Raw and Boiled Rice Mill.
Locational advantages :
The processing unit is located at major rice-growing belt of East Godavari, Andhra Pradesh which ensures availability of raw material (Paddy) directly from farmers and it incurs lower transport costs. East Godavari district is known as the rice bowl of Andhra Pradesh. The fertile area with lush paddy fields and coconut groves between the Godavari and Krishna rivers is known as the rice bowl of Andhra Pradesh.
Constant Demand :
Rice is in stable demand as it is a staple food for a large portion of the country's population.

Credit Risks:

Competition in the Industry :
Entry barriers in the rice milling industry are low on account of limited capital & technology requirements and low differentiation in the end product. This leads to intense competition and limits players’ pricing power, resulting in lower profitability. The price of paddy (key raw material) is highly volatile as it is dependent on demand-supply scenario, monsoon, and crop cycles. Also, since the cost of procuring paddy accounts for the bulk of the production expense, even a slight variation in price can drastically impact profitability.
Constitution of the entity :
Constitution as a partnership firm has the inherent risk of a possible withdrawal of the capital by partners, which can adversely affect its capital structure.
Price fluctuation in Paddy :
The agro-based industry faces seasonal challenges due to its dependence on weather-sensitive raw materials. Rice prices follow paddy prices closely, which are impacted by climate conditions. Unfavorable weather can reduce supply and increase raw material costs.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of Sri Ayyappa Raw and Boiled Rice Mill. 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 firm's ability to manage the working capital efficiently, improve the scale of operations, and improve and maintain profitability, along with the debt servicing capability and liquidity, will be key rating sensitive.

Upward -

Improvement in Scale of operations with improvement in operating and net profit margin.
Improvement in Debt metrics ratios with DSCR improving above 1.25x and maintaining Total Debt/TNW at satisfactory levels.

Downward :

Decline in revenue by 15% and operating margin falling below 4%.
Decline in the DSCR below the current level.

LIQUIDITY INDICATORS - Stretched

Tightly matched accruals to repayment obligations, with highly utilized bank limits and modest cash reserves.

The company has net cash accruals of Rs. 1.19 Crores as against the CPLTD of Rs. 2.70 Crores in FY25. The Net Cash Accruals are expected to increase to Rs. 1.21 Crores in FY26. ISCR remained comfortable at 1.48 times in FY25 and DSCR at 0.74 times in FY25. The company's EBITDA stood at Rs. 4.74 Crores in FY25 (audited financials) against interest and finance charges of Rs. 3.20 Crores. The EBITDA level remained adequate to service the interest obligations year on year. The tangible net worth of the company stood at Rs. 19.97 Crores in FY25.Hence, the liquidity position of the firm is considered to be stretched.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Fast Moving Consumer Goods	Fast Moving Consumer Goods	Agricultural Food & other Products	Other Agricultural Products

Sri Ayyappa Raw and Boiled Rice Mill was established in 1990 as a partnership firm at Polamuru Anaparthi Mandal, East Godavari District, Andhra Pradesh. The partnership firm comprises of nine partners, with Mr. Sathi Venkata Reddy serving as the Managing Partner having experience of over 30 years in the field of rice industry. The firm purchases paddy and processes them to sell raw rice and boiled rice. The firm also sells Rava, rice flour, and other by-products. The firm is selling its products under the brand names of Swastik, Gemini, and Jaiho. The firm is engaged in the CMR activity also. The installed capacity of the firm is 10,08,000 quintals per annum. Firm’s key customers are from Kerala and Andhra Pradesh. SARBR’s rice milling unit is in East Godavari, which is a favorable location for producing rice in Andhra Pradesh.

ESG Profile

The company demonstrates a Adequate ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks are driven by moderate water usage, waste generation, and reliance on energy-intensive processes, making disclosures on water consumption, waste-management practices, renewable energy share.

Social: Social factors hinge on adherence to labor laws with metrics such as workforce mix, safety performance and training initiatives offering insights into operational resilience.

Governance: Governance assessment focuses on board independence, committee effectiveness, and robustness of compliance systems, supported by readily available disclosures on board structure, audit mechanisms, and risk-management practices.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)
Operating Revenue	Rs.Crs.	95.30	96.14	99.18
EBITDA	Rs.Crs.	4.79	4.58	4.74
PAT	Rs.Crs.	0.71	0.74	0.77
Tangible Net Worth	Rs.Crs.	19.74	19.83	19.97
Total Debt / Tangible Net Worth	Times	1.72	1.66	1.56
Current Ratio	Times	1.91	1.86	1.72

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for such facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

No Other Information.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	32.00	BWR BB/Stable (Reaffirmation)	26Feb2025	BWR BB Stable (removal from ISSUER NOT COOPERATING* category/Upgraded)	05Apr2024	BWR BB- Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	11Apr2023	BWR BB Stable (ISSUER NOT COOPERATING* /Downgrade)
Non Fund Based	ST	2.00	BWR A4+ (Reaffirmation)	26Feb2025	BWR A4+ (removal from ISSUER NOT COOPERATING* category/Upgraded)	05Apr2024	BWR A4 (Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)	11Apr2023	BWR A4 (ISSUER NOT COOPERATING* /Reaffirmation)
Grand Total		34.00	(Rupees Thirty Four Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
R Sriranjani Rating Analyst sriranjani.r@brickworkratings.com	Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Sri Ayyappa Raw and Boiled Rice Mill

ANNEXURE-I

Details of Bank Facilities rated by BWR

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	Union Bank of India	Cash Credit - Sanctioned	32.00	_	32.00	Simple##
2	Union Bank of India	Bank Guarantee - Sanctioned	_	2.00	2.00	Simple##
Total			32.00	2.00	34.00
TOTAL (Rupees Thirty Four Crores 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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