RATING RATIONALE
27Jan2021

Shreenathji Developers

Brickwork Ratings reaffirms/revises the ratings for the Bank Loan Facilities of Rs.18.29 Crs. of Shreenathji Developers

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous(22 Nov 2019) Present
Fund Based
Term Loan Sanctioned 23.29 18.29 Long Term BWR BB /Stable Reaffirmation BWR BB /Stable Reaffirmation
Sub Total 23.29 18.29
Grand Total 23.29 18.29 (Rupees Eighteen Crores and Twenty Nine 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

The reaffirmation of the rating factors an adequate experience of the partners in the industry, the group’s track record of executing real estate projects successfully, the strategic location in Surat, Gujarat, and the completion of the project before schedule. The Firm has repaid a part of the loan availed for the project. The resultant finance cost-saving has partially offset the challenges posed by the sluggish market conditions and a slow down in the real estate sector, as also competition from the presence of established players in the market.

OUTLOOK: STABLE The ratings have been assigned a stable outlook as the Firm’s business risk profile is expected to be maintained over the medium term. The outlook may be revised to positive in case of better realization of sales as compared to projections. It may be revised to negative if sales realization for the remaining units is at a lower than expected price.

KEY RATING DRIVERS

BWR has essentially relied upon the audited financial statements of Shreenathji Developers 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:


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

Going forward, the ability of the company to scale up its operations and to improve its profit margins while maintaining its gearing at low would be the key rating sensitivities.

Upward: The rating may be positively revised if there is further growth in revenue and profit margins while maintaining a healthy overall financial profile.

Downward: The rating may be adversely affected if there is deterioration in capital structure, profit margins, and any delays in payment of its debt obligations.

LIQUIDITY INDICATORS - Stretched

Liquidity is stretched, The entity is having low debt protection metrics, ISCR & DSCR stood at 1.61x & 0.58x in FY19-20. 
The firm has low cash balances of Rs.0.41cr. The company is regular in its repayment obligations as confirmed by Bank. The Company has a current ratio of 7.44 for FY19- 2020. 

ABOUT THE ENTITY

M/s  Shreenathji Developers was established on 02.10.2015 to develop a commercial project named “Avadh Textile Market” with built-up area of approx 5,76,511.11 Sq feet situated at Plot No. 75, Survey No. 35, City Survey No. 2175, O. P. No. 44, T. P. S. No.8, Village Umrawada, Taluka - Puna (Surat City), Surat Kadodara Road, Surat - 394210. The Group is lead by Mr. Lavjibhai Daliya one of the main promoters and founder of the group. The group is one of the leading players of Surat city in the construction sector. The group has developed both residential and commercial projects in Surat, Ahmedabad, Navsari, Bardoli, Amreli, and Vapi.
 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 55.71 26.38
EBITDA Rs.Crs. 4.80 6.15
PAT Rs.Crs. 2.19 1.83
Tangible Net Worth Rs.Crs. 35.78 64.27
Total Debt/Tangible Net Worth Times 0.64 0.64
Current Ratio Times 8.52 7.44
KEY COVENANTS OF THE FACILITY RATED

Not Applicable.


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable.

ANY OTHER INFORMATION

Not Applicable.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) Rating History (2020)
Type Tenure Amount Rating NA
Fund Based
Term Loan - Sanctioned Long Term 18.29 BWR BB/Stable NA
Grand Total 18.29 (Rupees Eighteen Crores and Twenty Nine lakhs Only)

Facilities Current Rating  (2021) Rating History (2019)
Type Tenure Amount Rating 22Nov2019
Fund Based
Term Loan - Sanctioned Long Term 18.29 BWR BB/Stable BWR BB/Stable
Grand Total 18.29 (Rupees Eighteen Crores and Twenty Nine lakhs Only)

Facilities Current Rating  (2021) Rating History (2018)
Type Tenure Amount Rating 05Jul2018
Fund Based
Term Loan - Sanctioned Long Term 18.29 BWR BB/Stable BWR BB/Stable
Grand Total 18.29 (Rupees Eighteen Crores and Twenty Nine 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

Urvi Shah

Rating Analyst urvi.s@brickworkratings.com

Dileep Narayan Singh

Director Ratings dileep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Shreenathji Developers
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Term LoanSanctioned 18.29 _ 18.29
Total 18.29 0.00 18.29
TOTAL (Rupees Eighteen Crores and Twenty Nine lakhs Only)
ANNEXURE-II
INSTRUMENT DETAILS

InstrumentIssue DateAmount (Rs.Crs)Coupon Rate (%)Maturity DateISIN Particulars
NANANANANANA

ANNEXURE-III
List of entities consolidated

Name of Entity% OwnershipExtent of consolidationRationale for consolidation
NANANANA

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