Jamuna Sand

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 6.07 Crs. of Jamuna Sand.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (13 Nov 2020)	Present
Fund Based	6.60	6.07	Long Term	BWR B/Stable Reaffirmation	BWR B /Stable Reaffirmation
Grand Total	6.60	6.07	(Rupees Six Crores and Seven lakhs 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 reaffirms the rating at BWR B/ Stable for the Bank Loan Facilities of Rs.6.07 Crore of Jamuna Sand (JS). BWR believes that Jamuna Sand business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term.

BWR has essentially relied upon the audited financial statements of Jamuna Sand for FY20, FY21 and Key figures for FY22(Provisional) and projections of FY22 and FY23 and publicly available information and information/clarifications provided by the firm's management.

The rating reaffirmations continue to take into account the Experienced partners in managing business, locational advantage. The rating is constrained by nascent stage and small scale of operations, leveraged capital structure and weak debt coverage indicators, working capital intensive nature of operation, highly competitive nature of the industry and constitution of the entity being a partnership firm.

KEY RATING DRIVERS

Credit Strengths:

Experienced partners in managing business :
The firm is being managed by Mr. Rajesh Patel, Mr. Vinodkumar Patel, Mr.Mohanlal Patel and Mr. Sureshkumar Patel. The partners has considerable experience of around more than a decade in the same line of business through their association with group company.
Locational Advantage :

The firm is located in Nashik cluster and thus has a competitive advantage in terms of labor, logistics, production knowledge and vendors making the firm more efficient and cost-effective

Credit Risks:

Nascent stage and small scale of operations :
The firm has started its commercial operations from November 2019 and has a relatively short track record of operations. However, the partners have considerable experience in the same line of business. The scale of operations of the firm remained small marked by total operating income and gross cash accruals of Rs.5.93 crore and Rs.0.44 crore respectively during FY21(A). The small scale limits the firm’s financial flexibility in times of stress and deprives it from scale benefits. However, the risk is partially mitigated by the fact that the scale of operation is growing continuously from Rs.3.37 crore in FY20 to Rs.5.93 crore in FY21 with TOI achieved in 10MFY22 stood at Rs.11.28 crore
Leveraged capital structure and weak debt coverage indicators :
The capital structure of JS remained leveraged on account of decline in its networth bases as on balance sheet date from Rs.2.52 crore to Rs.1.62 crore thus the Total Debt /TNW remained leveraged at 4.53 times (vis-a vis 2.48 times as on March 31, 2020). Further, owing to leveraged capital structure and lower cash accruals, the debt service coverage indicators of JS remain weak with ISCR and DSCR stood at 1.63 times and 0.79 times as on March 2021
Working capital intensive nature of operation :

The operations of the company are working capital intensive, reflected by high conversion cycle days of 69 days for FY21 . The firm allows an average credit period of around 60 to 90 days to its customers resulting in an average collection period of 89 days with payable period at 95 days as the firm gets the credit period upto 90 days. Furthermore, inventory days remained high at 75 days as the firm has to maintain inventory to gauge its customers' demand.
Highly competitive nature of the industry :

JS operates in a highly fragmented industry wherein entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability
Constitution of the entity being a partnership firm :
JS constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner’s capital at the time of personal contingency and the firm being dissolved upon the death/retirement/insolvency of partners. Moreover, partnership firms have restricted access to external borrowing as credit worthiness of partners would be the key factors affecting credit decision for the lenders.

ANALYTICAL APPROACH - Standalone

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

Positive: Significant growth in revenue and overall improvement in financial performance of the firm.

Negative: Lower than expected revenues affecting the profitability margins, coverage ratios, liquidity and gearing ratios are the key negative sensitivities

ABOUT THE ENTITY

Jamuna Sand(JS) a part of Jamuna group of companies which was formed in 1996. JS is a partnership firm established in September 2018. JS is managed by Mr. Rajesh Patel, Mr. Vinodkumar Patel, Mr.Mohanlal Patel and Mr. Sureshkumar Patel The firm is engaged in stone crushing with an installed capacity of 30000 ton per month. The product portfolio includes lCrushed stone is segregated into various sizes like 35mm,20mm, 12mm, etc for different uses. Crushed stone aggregates are used for construction of roads, bridges, housing, industrial building construction and other cement based products like RCC pipes, PSC poles, premoulded slabs, frames and beems, etc for fabrication. The stone crushing unit is located near Igatpuri (Waghere Village) in Nasik district.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	5.93	3.27
EBITDA	Rs.Crs.	1.22	1.64
PAT	Rs.Crs.	-0.40	-0.35
Tangible Net Worth	Rs.Crs.	1.62	2.49
Total Debt/Tangible Net Worth	Times	4.53	2.48
Current Ratio	Times	2.85	2.35

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Nil

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	6.07	BWR B/Stable (Reaffirmation)	NA	NA	13Nov2020	BWR BStable (Reaffirmation)	19Aug2019	BWR BStable (Assignment)
Grand Total		6.07	(Rupees Six Crores and Seven lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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
Durga Lalit Purohit Ratings Analyst durga.lp@brickworkratings.com	Ajit S Jagnade Senior Manager - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 ajit.j@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Jamuna Sand

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	Term Loan - Sanctioned	5.07	_	5.07
2	Canara Bank	Cash Credit - Sanctioned	1.00	_	1.00
Total			6.07	0.00	6.07
TOTAL (Rupees Six Crores and Seven lakhs Only)

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