Brickwork Ratings reaffirms/revises the ratings for the Bank Loan Facilities of Rs.7.00 Crs. of Goyal Automobiles
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||||
|---|---|---|---|---|---|---|---|
| Previous | Present | Previous(26 Nov 2019) | Present | ||||
| Fund Based | |||||||
| Over Draft Sanctioned | 07.00 | 07.00 | Long Term | BWR BB - /Stable Reaffirmation | BWR BB - /Stable Reaffirmation | ||
| Sub Total | 7.00 | 7.00 | |||||
| Grand Total | 7.00 | 7.00 | (Rupees Seven Crores Only) | ||||
BWR has reaffirmed the long term rating of BWR BB- Stable for bank facilities of Goyal Automobiles.
The ratings take into account the extensive experience of the promoter in car dealership business and moderate financial risk profile. However the rating is constrained by low profitability margins, risk related to proprietorship constitution and exposure to industrial cyclicality, government regulations.
BWR believes that the business risk profile of Goyal Automobiles 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 if there is a significant improvement in firm revenues and profitability margins. The rating outlook may be revised to 'Negative' if there is any further deterioration in the financial risk profile of the firm.
KEY RATING DRIVERSBWR has essentially relied upon the audited financial statements of Goyal Automobiles of FY18,FY19,FY20 and projected financial statements of FY21,FY22, publicly available information and information / clarifications provided by the entity’s management.
Credit Strengths:
The promoter of the firm have rich experience of more than 30 years in the auto dealership business that helps them to maintain a better relationship with there customers and suppliers as well.
The firm has moderate financial risk profile with revenues of Rs 70.23 crores in FY20 (Audited), Although the revenues has declined marginally from Rs 70.81 crores in FY19 (Audited), the firm is able to achieved revenues of Rs 46.00 crores till December 2020 and projected to achieved revenues of Rs 69.00 crores till FY21 (Projected), along with moderate gearing level TD/TNW (Analysed) of 2.34 Times, Interest Service Coverage Ratio of 1.10 Times along with moderate current ratio of 1.33 Times in FY20 (Audited).
Credit Risks:
The firm has low profitability margins with Net Profit Margins of 0.22% & Operating Profit Margins of 1.57% in FY20 (Audited).
Being a Proprietorship firm it is exposed to the risk of withdrawal of capital due to personal exigencies.
The business is susceptible to inherent cyclicality in the automotive industry and is linked to the performance of the economy. Also exposure to regulatory changes, variation in emmission norms, and intense competition in the market.
Going forward,improvement in revenues, and profitability margins will be the key rating sensitivities.
Positive : The rating will be upgraded if the firm is able to make significant improvement in their revenues, and profitability margins.
Negative : The rating will be downgraded if there is any deterioration in the financial risk profile of the firm.
LIQUIDITY INDICATORS - Stretched
The firm has no associate concern or subsidiary concern.
The firm has cash & Bank balances in FY20 (Audited) is Rs 1.04 Crs.
The firm has average utilisation of 52 % of their od limit from last six months.
The firm has long term debt of Rs. 3.32 crs as at FY20 (Audited) which comprises of Unsecured Loans from friends & promoter of Rs 3.32 crores in FY20 (Audited).
The firm has Interest service coverage ratio of 1.10 times and Debt Service Coverage Ratio of 0.83 times in FY20 (Audited).
The current ratio has been 1.33 Times as at FY20 (Audited).
The firm has conversion cycle of 65 days in FY 20 (Audited).
Goyal Automobile (GA) Patiala, Punjab is proprietorship concern established in 2008 by Mr. Dharam Pal Goyal. The firm is an authorized dealer of Hyundai passengers cars. It provides 3S services (Sales, spares & service) to its customers at its showroom and service centre situated at Rajpura Road, Patiala with total area of around 5000 sq.yds. In August 2018, the Firm has started another 3S Hyundai showroom at Nabha, Punjab. Both the showroom has a display capacity of 7 cars each. The firm majorly deals with Hyundai Models like, CRETA, VERNA, i-20, GRAND, i10, EON & TUSCAN.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 70.23 | 70.81 |
| EBITDA | Rs.Crs. | 1.10 | 1.01 |
| PAT | Rs.Crs. | 0.15 | 0.13 |
| Tangible Net Worth | Rs.Crs. | 3.98 | 3.87 |
| Total Debt/Tangible Net Worth | Times | 3.73 | 2.54 |
| Current Ratio | Times | 1.33 | 1.75 |
| Key Parameters | Units |
|
|
|---|---|---|---|
| Operating Revenue | Rs.Crs. | Not Available | Not Available |
| EBITDA | Rs.Crs. | Not Available | Not Available |
| PAT | Rs.Crs. | Not Available | Not Available |
| Tangible Net Worth | Rs.Crs. | Not Available | Not Available |
| Total Debt/Tangible Net Worth | Times | Not Available | Not Available |
| Current Ratio | Times | Not Available | Not Available |
| Facilities | Current Rating (2021) | Rating History (2020) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount | Rating | NA | |||||||
| Fund Based | |||||||||||
| Over Draft - Sanctioned | Long Term | 07.00 | BWR BB-/Stable | NA | |||||||
| Grand Total | 7.00 | (Rupees Seven Crores Only) | |||||||||
| Facilities | Current Rating (2021) | Rating History (2019) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount | Rating | 26Nov2019 | |||||||
| Fund Based | |||||||||||
| Over Draft - Sanctioned | Long Term | 07.00 | BWR BB-/Stable | BWR BB -/Stable | |||||||
| Grand Total | 7.00 | (Rupees Seven Crores Only) | |||||||||
| Facilities | Current Rating (2021) | Rating History (2018) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount | Rating | 19Sep2018 | |||||||
| Fund Based | |||||||||||
| Over Draft - Sanctioned | Long Term | 07.00 | BWR BB-/Stable | BWR BB -/Stable | |||||||
| Grand Total | 7.00 | (Rupees Seven 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 | |
|---|---|
|
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. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | ||
|---|---|---|---|---|---|---|
| 1 | Over DraftSanctioned | 7.00 | _ | 7.00 | ||
| Total | 7.00 | 0.00 | 7.00 | |||
| TOTAL (Rupees Seven Crores Only) | ||||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
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About Brickwork RatingsBrickwork 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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