Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 25.00 Crs. of JVL Steel Pvt. Ltd. (erstwhile JSL Ispat (P) Ltd)
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (23 Jul 2021) |
Present | ||
| Fund Based | 20.00 | 25.00 | Long Term |
BWR B+ /Stable
Downgrade/ISSUER NOT COOPERATING* |
BWR BB
/Stable Upgrade |
| Grand Total | 20.00 | 25.00 | (Rupees Twenty Five Crores Only) | ||
BWR upgrade the long term rating to BWR BB Stable and remove from Issuer not cooperating* Category.
The rating draws strength from the experienced promoters & long track record of business, Moderate Financial Risk Profile & Improvement in Revenues Y-O-Y. The rating of the company is constrained by low profitability margins, Competition from various organised and unorganised players, .
BWR believes that the business risk profile of “JVL Steel Private Limited (Erstwhile JSL Ispat (P) Limited.” 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 there is significant improvement in revenues, and profit margins of the company. The rating outlook may be revised to “Negative” if there is any deterioration in the financial risk profile including liquidity of the company.
KEY RATING DRIVERSCredit Strengths:
The Promoters of the company is into the trading of steel and tubes from last ten years that helps to maintain their better relation with their customers and suppliers .The Promoters of the company has rich experience of more than 50 years in the same line of business.
The company has moderate financial risk profile with revenues of Rs 181.70 crores in FY21 (Audited), Further the company has achieved revenues of Rs 145.00 crores till October 2021 and Projected to achieved revenues of Rs 250.00 crores in FY22, along with PAT of Rs 2.18crores in FY21 (Audited). The company has Moderate Net Worth of Rs 11.65 crores in & TNW (Analysed) of Rs 16.03 Crores in FY21 (Audited). The company has low gearing level with TD/TNW of 2.08 Times & TD/TNW (Analysed) of 1.24 Times in FY21 (Audited) along with moderate debt service indicators Interest Service Coverage Ratio of 2.41 Times & Debt Service Coverage Ratio of 2.01 Times in FY21 (Audited).The company has moderate current ratio of 1.82 Times in FY21 (Audited).
The company revenues has improved Y-O-Y from Rs 145.16 crores in FY20 (Audited) to Rs 181.70 crores in FY21 (Audited) and further the company has achieved revenues of Rs 145 crores till October 2021 and Projected to achieve revenues of Rs 250.00 crores in FY22.
The company has low Profitability Margins with Net Profit Margins of 1.20% and Operating Profitability Margins of 2.89% in FY21 (Audited).
As the company engaged in trading business of steel and pipes as there is much competition in trading sector.
Going forward, the ability of the company to improve its profitability margins and financial risk profile would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and able to improve profit margins of the company.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the company including the liquidity of the company
LIQUIDITY INDICATORS - Adequate
(1) The company has nil associate concern or subsidiary concern.
(2). The company has cash & bank balances of Rs. 0.15 crs in FY21 (Audited).
(3). The company has average utilisation of 85% for last six months of cash credit limit.
(4). The company has long term borrowings of Rs 9.15 crores in FY21 (Audited which comprises of unsecured loans from friends & relatives of Rs 8.76 crores, and car loans of Rs 0.40 crores in FY21 (Audited) ,The company has cash accruals of Rs 2.39 crores in FY21 (Audited) against the CPLTD of Rs 0.17 crores.
(5). The company has Interest service coverage ratio of 2.41 times and Debt Service Coverage Ratio of 2.01 times in FY21 (Audited).
(6) The company has conversion cycle of 65 days in FY21 (Audited)
(7) . The current ratio has been 1.82 as at FY21 (Audited)
ABOUT THE ENTITYJVL Steel Private Limited (Erstwhile JSL Ispat Private limited) was established in 20/10/2005. The company changes its name from JSL Ispat (Private) Limited to JVL Steel Private Limited on 12.07.2021. The company is engaged in trading of various types of Mild Steel Tubes, Black and Galvanized steel tubes/pipes . The company is currently managed by Mr Satyanarayan Kokra, Mr Azad Kumar Kokra and other family members. The company has its registered office located at Asaf Ali Road, New Delhi.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 181.70 | 145.16 |
| EBITDA | Rs.Crs. | 5.25 | 1.59 |
| PAT | Rs.Crs. | 2.18 | 0.61 |
| Tangible Net Worth | Rs.Crs. | 11.65 | 9.47 |
| Total Debt/Tangible Net Worth | Times | 2.08 | 2.58 |
| Current Ratio | Times | 1.82 | 1.85 |
N.A
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2021) | 2021 (History) | 2020 | 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 25.00 |
BWR BB/Stable
(Upgrade) |
23Jul2021 |
BWR B+ Stable
(Downgrade/ISSUER NOT COOPERATING*) |
11May2020 |
BWR BB- Stable
(Reaffirmation/ISSUER NOT COOPERATING*) |
27Feb2019 |
BWR BB- Stable
(Assignment) |
NA |
NA
|
| Grand Total | 25.00 | (Rupees Twenty Five 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.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Aman sharma Rating Analyst Board : +91 172 5032 295 / 6 aman.s@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Jammu and Kashmir Bank | Cash CreditSanctioned | 25.00 | _ | 25.00 | |
| Total | 25.00 | 0.00 | 25.00 | |||
| TOTAL (Rupees Twenty Five Crores Only) | ||||||
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