RATING RATIONALE
07Nov2022

Color Granito Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 86.19 Crs. of Color Granito Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
()
Present
Fund Based 0.00 79.69 Long Term
BWR BBB - /Stable
Assignment
Non Fund Based 0.00 6.50 Short Term
BWR A3
Assignment
Grand Total 86.19 (Rupees Eighty Six Crores and Nineteen 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
Note: This rating pertains to an existing assignment received prior to 6 October 2022.


RATING ACTION / OUTLOOK

Brickwork Ratings has assigned  BWR BBB-/ Stable/ A3 ratings to the bank facilities of  Color Granito Pvt. Ltd. (CGPL).

BWR has relied on the company’s audited financial statements till FY22, financial projections  till FY24 and various other developments to arrive at the rating.

The ratings reflect the adequate experience of CGPL’s promoters in the ceramic industry, locational advantage and steady improvement in financial risk profile. These strengths are partly offset by the improving yet average scale of operations, susceptibility to volatile raw material costs,  vulnerability of profitability and cash flows to cyclicality in real estate industry and Intense competition in ceramic industry. 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

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: BWR could upgrade entity's ratings if there is an improvement in its revenue performance along with a significant improvement in its profitability margins, leading to an improvement in the credit profile on a consistent basis. 

- Improvement in operating income by more than 20% and margin by 200 basis points

- Significant increase in cash accrual generation and efficient working capital management

- Significant improvement in the financial risk profile either through larger-than-expected capital infusion  or higher cash generation from operations

Negative: Pressure on the ratings could arise in case there is significant decline in its turnover and/or profitability levels, leading to lower cash accruals, which will result in deterioration in its credit profile.  

- Operating income declines by more than 30% over FY22

- Fall in profitability

- Deterioration in the financial risk profile

 

LIQUIDITY INDICATORS - Adequate

Liquidity profile is adequate marked by expected cash accruals of Rs 20.17 crore against term debt obligations of Rs 7.47 crore for FY23. Current ratio of 1.74x for FY22 is reasonable. Average working capital utilization is around 92% for the last 7 months ending 30 Sep 2022. The liquidity is further supported in form of promoters’ USL.

ABOUT THE ENTITY

Incorporated in Sep 2015, Color Granito Private Limited is promoted by Mr. Vipul Patel  and Mr. Sandip Patel . It is engaged in manufacturing of vitrified tiles of different sizes.  The company is ISO 9001 : 2008 Certified. 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 187.52 136.52
EBITDA Rs.Crs. 19.61 18.05
PAT Rs.Crs. 2.23 6.40
Tangible Net Worth Rs.Crs. 32.87 30.64
Total Debt/TNW Times 2.73 1.33
Current Ratio Times 1.27 1.47
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

NA

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 79.69
BWR BBB-/Stable
(Assignment)
NA
NA
NA
NA
NA
NA
Non Fund Based ST 6.50
BWR A3
(Assignment)
NA
NA
NA
NA
NA
NA
Grand Total 86.19 (Rupees Eighty Six Crores and Nineteen 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

Priya Depala

Senior Rating Analyst priya.d@brickworkratings.com

Dileep Narayan Singh

Director dileep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Color Granito 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 HDFC Bank Term LoanSanctioned 15.88 _ 15.88
2 HDFC Bank Term LoanSanctioned 6.34 _ 6.34
3 HDFC Bank Term LoanSanctioned 32.47 _ 32.47
4 HDFC Bank Cash CreditSanctioned 25.00 _ 25.00
5 HDFC Bank Bank GuaranteeSanctioned _ 6.50 6.50
Total 79.69 6.50 86.19
TOTAL (Rupees Eighty Six Crores and Nineteen lakhs 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 12,000 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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