RATING RATIONALE
24Jan2022

R.S. Enterprises (Bangalore) Pvt. Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 11 Crs. of R.S. Enterprises (Bangalore) Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(13 Nov 2020)
Present
Fund Based 8.50 11.00 Long Term BWR BB+ /Stable
Reaffirmation
BWR BB + /Stable
Reaffirmation
Grand Total 8.50 11.00 (Rupees Eleven 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

BWR has essentially relied upon the audited financials upto FY20, Provisionals financials of FY21, publicly available information and information/clarifications provided by the firm's management.
The rating reaffirms factors of promoters experience and operational track record of the company, strong financial profile, reputed customers and low customer concentration risk. However, the rating is constrained by medium scale of operations , working capital intensive nature of operation, geographical and supplier concentration risk,  competition in the industry.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR expects that R S Enterprises' business risk profile will be maintained over the medium term. The outlook may be revised to Positive in case of better than expected operating income and improvement in financial risk profile debt-protection indicators. The outlook may be revised to Negative if the operating metrics weaken or if larger than anticipated capex leads to deterioration in credit metrics and liquidity

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

As it is a firm, a standalone approach has been adopted and BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale). 

RATING SENSITIVITIES

Positive: The rating may be positively revised if the Company shows substantial increase in revenue and improvement in profit margins while maintaining its strong financial profile.

Negative: The rating would be adversely affected if the revenues and profit margins declines and also if there is any deterioration in the financial risk profile, and any other factors validating for downgrade

LIQUIDITY INDICATORS - Adequate

Adequate liquidity profile of the firm is marked by decrease in Inventory days in FY20 from 78 days to 67 days and receivables days have increased in FY20 from 110 days to 114 days. The conversion cycle has considerably increased to 143 days in FY20 from 138 days in FY19 due to increase in receivables days. Though the firm has a current ratio of 3.28 times in FY20, adequate net cash accruals of  Rs. 3.77 Crs, and Rs. 2.22 Crs to cover CPLTD of Nil for audited FY20 & Rs. 0.06 Cr for Provisional Financials FY21

CPLTD is Nil for fy20 & Rs. 0.06 Cr for Provisional Financials FY21as against net cash accruals of Rs.3.77 Crs, and Rs. 2.22 Crs as on  31st March 2020,  as on  31st March 2021 provisionals, which is adequate to meet them.

ABOUT THE ENTITY

Established in 1987 as R.S.Enterprises and later incorporated in 1998 as R.S.Enterprises (Bangalore) Pvt. Ltd, the company is promoted by the family members of Mr.Prakash Revankar. The registered office of the company is located at Mahalakshmipuram, Bangalore - Karnataka. RSEPL is a wholesale dealer of Pharmaceuticals manufactured by Indian Pharmaceutical Companies and Distributor of “SERJUN” brand Surgical Gloves a preferred brand in Karnataka. It has a unique portfolio of products starting with Pharma Products, Surgicals, Joint replacements, Equipments. The Company has a presence in all the leading Hospitals, Nursing Homes, Diagnostic Centers IVF Centers etc. The Company has a well supported team of 70 odd staff and with branches in Belgaum, Mangalore and Mysore. 
Prakash P.Revankar, Saroj P.Revankar are the directors of the company. Prakash P.Revankar is the managing director of the company and he is taking care of the day to day activities of the company.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 88.48 81.11
EBITDA Rs.Crs. 6.09 5.52
PAT Rs.Crs. 3.63 3.30
Tangible Net Worth Rs.Crs. 33.86 30.23
Total Debt/Tangible Net Worth Times 0.39 0.35
Current Ratio Times 3.28 2.81

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

CRISIL B/Stable (ISSUER NOT COOPERATING*; Rating Withdrawn)* on Oct 23, 2020.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 11.00
BWR BB+/Stable
(Reaffirmation)
NA
NA
13Nov2020
BWR BB+ Stable
(Reaffirmation)
15May2019
BWR BB+ Stable
(Assignment)
Grand Total 11.00 (Rupees Eleven Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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

Madithati Alekya Reddy

Ratings Analyst madithati.r@brickworkratings.com

Nagaraj K

Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
R.S. Enterprises (Bangalore) Pvt. Ltd.
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.)
1 Canara Bank Cash CreditSanctioned 11.00 _ 11.00
Total 11.00 0.00 11.00
TOTAL (Rupees Eleven Crores Only)
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About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,400 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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