Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 14.70 Crs. of Bawa Industries Pvt Ltd
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (21 Oct 2022) |
Present | ||
| Fund Based | 0.75 | 0.00 | Long Term |
BWR BB-
ISSUER NOT COOPERATING*/Reaffirmed^ |
BWR BB -
/Stable Reaffirmation |
| (0.00) | (2.00) | ||||
| 10.70 | 14.70 | Short Term |
BWR A4
ISSUER NOT COOPERATING*/Reaffirmed^ |
BWR A4
Reaffirmation |
|
| (0.00) | (2.00) | ||||
| Grand Total | 11.45 | 14.70 | (Rupees Fourteen Crores and Seventy lakhs Only) | ||
Reaffirmed the long term rating at BWR BB-/Stable, short term rating at BWR A4 category based on the available information.
The rating draws strength from the Extensive experience of the promoters and Moderate financial risk profile. However, the rating is constrained on account of Intense competition and Low current ratio marked with thin profitability margins.
BWR believes that Bawa Industries Pvt Ltd business risk profile of 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' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if there is deterioration in the financial risk profile.
KEY RATING DRIVERSCredit Strengths:
The promoters of the company are into the manufacturing of hand tool business from last 30 years. The company has a long track record of more than 30 years that helps to maintain a better relationship with their customers and suppliers as well. Bawa Industries Private Limited is majorly export oriented unit enjoying the status of Star Export House and mainly exports to Italy ,Peru and other various countries.
The Operating Income increased by 38.33 % from Rs 35.33 crs in FY21 to Rs 49.05 crs in FY22 (A). Profit after tax decreased to Rs 1.07 crs in FY 22(A) from Rs 1.12 Crs in FY 21 (A). Operating Profit Margin declined from 8.77 % in FY21(A) to 6.21% in FY22(A) . Net Profit Margin declined to 2.19 % in FY22(A) from 3.18 % in FY21(A) . The tangible net worth has increased from Rs 10 crs in FY21(A) to Rs 11.08 crs. in FY22(A) .Total Debt / TNW declined from 1.28 times in FY 21 (A) to 1.40 times in FY 22 (A). Moderate debt protection with Interest service Coverage Ratio (ISCR) improved to 3.09 times in FY22(A) as against 3.01 times in FY21(A). Debt Service Coverage Ratio (DSCR) decreased from 1.55 times in FY21(A) to 1.23 times in FY22(A) .The current ratio slightly declined from 1.23 times in FY 21 (A) to 1.17 times in FY 22 (A).
The company faces intense competition from other big players in the hand tool manufacturing segment. Moreover the prices of raw material keep on fluctuating in global markets resulting in low profit margins.
The company has low current ratio of 1.17 time. The profitability of the business is thin because of the presence of a large number of organised and unorganised players
Going forward, the ability of the company to improve its revenues and financial risk profile would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and current ratio of the company.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the company including the liquidity of the company
LIQUIDITY INDICATORS - Adequate
Bawa Industries Pvt Ltd does not have any group companies or associates. The firm has Cash & Bank Balance of Rs 1.10 crs. in FY22(A). The current ratio is 1.17 times in FY22(A). Average CC utilization from April 2022 to October 2022 is 66.30%. The conversion cycle is 84 days in FY22(A). ISCR is 3.09 times in FY22(A). DSCR is 1.23 times in FY22 (A). Long term borrowings of Rs 3.77 Crs in FY 22 comprises of Unsecured loan of Rs 1.97 crs (interest bearing @ 12%) and Rs 0.20 crs(non interest bearing), Term loan of Rs 0.50 crs from SIDBI and GECL from Central Bank of India of Rs 1 crs. CPLTD stands at Rs1.37 Crs against the net cash accruals of Rs 2.12 Crs in FY 23 (Prov).
ABOUT THE ENTITYBawa Industries Private Limited was incorporated in 1988 and has its unit located at Industrial Area Phagwara. BIPL is a 100% export unit enjoying the status of Star Export House, ISO : 9001:2015. 14001:2015. BIPL is engaged in manufacturing of engineering tools like machine tools, hand tools, vertical diesel engine and parts and other tools and mainly exports to Italy, Peru, Egypt, Syria, and USA. The company is currently managed by Mr R.L Kohli, Mr Deepak Kohli and Mr Rishabh Kohli.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 21-22 (Audited) |
FY 20-21 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 49.05 | 35.33 |
| EBITDA | Rs.Crs. | 3.05 | 3.10 |
| PAT | Rs.Crs. | 1.07 | 1.12 |
| Tangible Net Worth | Rs.Crs. | 11.08 | 10.00 |
| Total Debt/TNW | Times | 1.40 | 1.28 |
| Current Ratio | Times | 1.17 | 1.23 |
NA
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2022) | 2022 (History) | 2021 | 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 0.00 |
NA
|
21Oct2022 |
BWR BB-
(ISSUER NOT COOPERATING*/Reaffirmed^) |
09Jul2021 |
BWR BB-
(Reaffirmation) |
02Apr2020 |
BWR BB-
(Reaffirmation) |
19Mar2019 |
BWR BB- Stable
(Upgrade) |
| FB SubLimit | LT | (2.00) |
BWR BB-/Stable
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Fund Based | ST | 14.70 |
BWR A4
(Reaffirmation) |
21Oct2022 |
BWR A4
(ISSUER NOT COOPERATING*/Reaffirmed^) |
09Jul2021 |
BWR A4
(Reaffirmation) |
02Apr2020 |
BWR A4
(Reaffirmation) |
19Mar2019 |
BWR A4
(Reaffirmation) |
| FB SubLimit | ST | (2.00) |
BWR A4
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 14.70 | (Rupees Fourteen Crores and Seventy lakhs 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.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Upma Verma Ratings Analyst upma.v@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. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Central Bank of India | Cash CreditSanctioned | _ | _ | 0.00 | |
| Sub-Limit (Cash credit) | (2.00) | |||||
| 2 | Central Bank of India | Export Packing Credit (EPC)Sanctioned | _ | 12.70 | 12.70 | |
| Sub-Limit (PCFC) Sanctioned | (2.00) | |||||
| 3 | Central Bank of India | Foreign Bill PurchaseSanctioned | _ | _ | 0.00 | |
| 4 | Central Bank of India | Foreign Bill Negotiation under Letter of Credit (FBD/FUDBP/FBP/FBDN)Sanctioned | _ | _ | 0.00 | |
| 5 | Central Bank of India | OverdraftSanctioned | _ | _ | 0.00 | |
| 6 | Central Bank of India | EBD / FDBDSanctioned | _ | 2.00 | 2.00 | |
| Total | 0.00 | 14.70 | 14.70 | |||
| TOTAL (Rupees Fourteen Crores and Seventy lakhs Only) | ||||||
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