RATING RATIONALE
10Dec2021
Sunplast Electronics Pvt. Ltd.
Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 49.00 Crs. of Sunplast Electronics Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (02 Nov 2020) |
Present | ||
| Fund Based | 29.00 | 34.00 | Long Term |
BWR BBB-/Stable
Upgrade |
BWR BBB -
/Stable Reaffirmation |
| (0.00) | (15.00) | ||||
| (0.00) | (34.00) | Short Term |
|
BWR A3
Reaffirmation |
|
| Non Fund Based | 5.00 | 15.00 | Short Term |
BWR A3
Upgrade |
BWR A3
Reaffirmation |
| (0.00) | (10.00) | ||||
| (0.00) | (10.00) | ||||
| (0.00) | (10.00) | ||||
| (0.00) | (15.00) | ||||
| (0.00) | (15.00) | ||||
| Grand Total | 34.00 | 49.00 | (Rupees Forty Nine Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK
BWR has reaffirmed the long term and short term rating at BWR BBB- (Stable)/BWR A3 for the bank loan facilities of Sunplast Electronics Pvt. Ltd. (SEPL) ['the company'].
The rating draws strength from extensive experience of promoters, reputed clients and suppliers, diversified product portfolio and moderate financial risk profile. However, the rating is constrained by susceptibility of the profitability margins to raw material price volatility, susceptibility to changes in government regulations and intense competition in the industry.
BWR believes that the business risk profile of “Sunplast Electronics Pvt. Ltd.” 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:
-
Extensive Experience of Promoters :
The company is managed and controlled by Mr. Prem Gupta, Mr. Pushkar Gupta, Mr. Chacko Mathew and Ms. Deepa Gupta. Mr. Prem Gupta and Mr. Pushkar Gupta are Post Graduates and Ms. Deepa Gupta and Mr. Chacko Mathew are Graduates and have a decade long experience in the plastic injection molding business , which helps the company in securing repeated business orders. Their extensive experience helps them in understanding the dynamics of the local market and establish healthy relationships with suppliers and customers. Further, they are supported by a team of professionals who are highly experienced in their respective domains.
-
Reputed clients and suppliers and diversified product portfolio :
SEPL has established relationship with customers such as LG Electronics Pvt. Ltd., Havells India Ltd., Symphony Ltd. and suppliers such as Reliance Industries Ltd., LG Electronics India Pvt. Ltd., Kingfa Science and Technology India Ltd and Samsung India Electronics Pvt. Ltd.. The company has a large and diversified portfolio for plastic moulded products which helps the company to cater to consumer electronics, home and kitchen appliances and automotive industries, resulting in low dependency on any particular sector. The company manufactures and supplies transparent parts for refrigerator, washing machine and water purifiers; interior and exterior parts for consumer electronics; Jumbo packing crates; assembly, paintable ABS body parts & performance parts for 2W/4W, centralised conveyor, LED back covers. It also added cooler assembly for Symphony and also added indoor unit assembly line for Split AC and Extension Board Assembly Line.
-
Moderate financial risk profile :
The company has moderate financial risk profile with total operating income of Rs. 315.88 crs. in FY20 (Aud.). which increased from Rs. 283.18 crs. in FY19 (Aud.). Further, the total operating income increased to Rs. 334.65 cr. in FY21 (Prov.). The total operating income of the company stood at Rs. 176.96 crs. in 6MFY22 (Prov.) against total operating income Rs. 400.75 cr. projected for FY22. The operating profit margin of the company has declined in FY20 (Aud.) to 5.05% from 5.84% in FY19 (Aud.). The net profit margin of the company has declined to 1.57% in FY20 (Aud.) from 1.70% in FY19 (Aud.). The company has generated a net profit of Rs. 4.96 cr. in FY20 (Aud.) against net profit of Rs. 4.80 cr. in FY19 (Aud.). The tangible networth of the company stood at Rs. 24.12 crs. as on March 31, 2020 (Aud.) which improved from Rs. 19.19 cr. as on March 31, 2019 (Aud.). The tangible networth (analyzed) of the company stood at Rs. 40.87 crs. in FY20 (Aud.) which improved from Rs. 33.38 crs. in FY19 (Aud.). The Total Debt/TNW ratio stood at 2.09 times as on March 31, 2020 (Aud.) against 2.45 times as on March 31, 2019 (Aud.). The Total Debt/TNW (analyzed) ratio stood at 0.82 times as on March 31,2020 (Aud.) against 0.98 times as on March 31, 2019 (Aud.). The company has Interest Service Coverage Ratio (ISCR) of 5.83 times in FY20 (Aud.) which improved from 5.49 times in FY19 (Aud.). The Debt Service Coverage Ratio (DSCR) stood at 3.73 times as on March 31, 2020 (Aud.) against 4.11 times as on March 31, 2019 (Aud.).
-
Susceptibility of the profitability margins to raw material price volatility and susceptibility to changes in government regulations. :
The margins are exposed to volatility because prices of raw materials are linked to crude oil prices. The company manufactures plastic packaging products and hence is exposed to government regulations pertaining to production of plastics, pollution and crude oil. Any change in regulations by the government may impact production capacity and price margins.
-
Intense competition in the industry :
SEPL is exposed to intense competition in the plastic injection moulding industry due to presence of other large organised players in the market as well as several local players, constraining the bargaining power with customers.
Going forward, the ability of the company to improve its revenues and financial risk profile would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and profitability margins of the company.
Negative: Rating may be downgraded in case there is deterioration in the financial risk profile and liquidity position of the company.
LIQUIDITY INDICATORS - Adequate
The company has cash and bank balances of Rs. 0.37 cr. as on March 31, 2020 (Aud.) and Rs. 3.46 cr. as on March 31, 2021 (Prov.). The current ratio of the company stood at 1.44 times as on March 31, 2020 (Aud.). The working capital cycle of the company stood at 49 days as on March 31, 2020 (Aud.). The company has long term borrowing of 26.69 cr. as on March 31, 2020 (Aud.) which comprises of term loans of Rs. 6.80 cr., and unsecured loans of Rs. 19.89 cr. as on March 31, 2020 (Aud.) against which the CPLTD stood at Rs 0.55 cr. as on March 31, 2020 (Aud.) and cash surplus of Rs 11.71 crores. The Long Term Borrowings of Rs. 26.29 cr. as on March 31, 2021 (Prov.) comprises of term loan of Rs. 6.55 cr. Vehicle loan of Rs. 0.31 cr., and unsecured loans of Rs. 19.43 cr. The company has average utilisation of 41% for May 2021 to Nov 2021. The company has Interest service coverage ratio of 5.83 times and debt service coverage ratio of 3.73 times in FY20 (Aud.). Overall liquidity of the company remained adequate.
ABOUT THE ENTITYSunplast Electronics Pvt Ltd. (SEPL) is a is a part of Sunvoice Group, promoted by Mr. Prem Gupta. Sunvoice Electronics Pvt Ltd. started its operations in 1984 & is engaged in complete Speaker solution for last 25 years with technical guidance from M/s Itsuwa Shoji Kaisha Inc, Japan.With a vision to diversify and start new business operations in the field of plastics, Sunplast Electronics Pvt. Ltd. (SEPL) was incorporated in 2010 by Mr. Prem Gupta, Mr. Pushkar Gupta and Mr.Chacko Mathew. Sunplast is a plastic injection moulding company providing total moulding solutions to its customers like tooling , moulding, assembly and painting. Sunplast is manufacturing plastic injection-moulded parts for consumer durable electronics industry such as refrigerator, washing machine, water purifiers, water coolers, ACs etc. and automobile industry mainly 2-wheelers and 4-wheelers and is a Tier I supplier to various white good OEMs and Tier II system supplier to 2W/4W Auto OEM’S. It has a single manufacturing plant located in Greater Noida. In 2019, it has around 71 injection moulding machines . The total plastic processing capacity is around 18000 MT per annum.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 315.88 | 283.18 |
| EBITDA | Rs.Crs. | 15.96 | 16.53 |
| PAT | Rs.Crs. | 4.96 | 4.80 |
| Tangible Net Worth | Rs.Crs. | 24.12 | 19.19 |
| Total Debt/Tangible Net Worth | Times | 2.09 | 2.45 |
| Current Ratio | Times | 1.44 | 1.35 |
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
NA
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 34.00 |
BWR BBB-/Stable
(Reaffirmation) |
02Nov2020 |
BWR BBB-Stable
(Upgrade) |
13Jun2019 |
BWR BB+Stable
(Assignment) |
NA |
NA
|
| FB SubLimit | LT | (15.00) |
BWR BBB-/Stable
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| FB SubLimit | ST | (34.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Non Fund Based | ST | 15.00 |
BWR A3
(Reaffirmation) |
02Nov2020 |
BWR A3
(Upgrade) |
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (10.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
13Jun2019 |
BWR A4+
(Assignment) |
NA |
NA
|
| NFB SubLimit | ST | (10.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (10.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (15.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (15.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 49.00 | (Rupees Forty Nine 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.
| Analytical Contacts | |
|---|---|
|
Adhiraj Singh Ratings Analyst adhiraj.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 | HDFC Bank | Cash CreditSanctioned | 34.00 | _ | 34.00 | |
| Sub-Limit (Bank Guarantee [sublimit of cash credit]) Sanctioned | (10.00) | |||||
| Sub-Limit (ILC/FLC [sublimit of cash credit]) Sanctioned | (10.00) | |||||
| Sub-Limit (SBLC [sublimit of cash credit]) Sanctioned | (10.00) | |||||
| Sub-Limit (WCDL [sublimit of cash credit]) Sanctioned | (34.00) | |||||
| 2 | HDFC Bank | ILC/FLCSanctioned | _ | 15.00 | 15.00 | |
| Sub-Limit (Bank Guarantee [sublimit of ILC/FLC]) Sanctioned | (15.00) | |||||
| Sub-Limit (Cash Credit [sublimit of ILC/FLC]) Sanctioned | (15.00) | |||||
| Sub-Limit (SBLC [sublimit of ILC/FLC]) Sanctioned | (15.00) | |||||
| Total | 34.00 | 15.00 | 49.00 | |||
| TOTAL (Rupees Forty Nine Crores Only) | ||||||
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