F. T. Textiles Pvt. Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities. of F. T. Textiles Pvt. Ltd aggregating Rs. 53.93 Crs.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (23 Jul 2021)	Present
Fund Based	25.75	53.48	Long Term	BWR BBB-/Stable Reaffirmation	BWR BBB - /Stable Reaffirmation
Non Fund Based	0.45	0.45	Short Term	BWR A3 Reaffirmation	BWR A3 Reaffirmation
Grand Total	26.20	53.93	(Rupees Fifty Three Crores and Ninety Three 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

This rating pertains to an existing assignment received prior to 6 October 2022.

Brickwork Ratings has relied upon the Audited financials of the company for FY 19, FY 20 and FY 21 provisional financials of FY 22, Projected financials of FY 23 and FY 24, information available in public domain as well as feedback from the company and its bankers, for arriving at the present rating.

Based on an annual review, Brickwork Ratings has reaffirmed the rating of the long term bank loan facilities of F. T. Textiles Pvt. Ltd. (FTTPL or the Company) for the enhanced amount of Rs.53.48 Crs (enhanced from Rs.25.75 Crs) at BWR BBB-/Stable and has also reaffirmed the rating of their short term bank loan facilities of Rs.0.45 Crs at BWR A3 (aggregate rated amount enhanced from Rs.26.20 Crs to Rs.53.93 Crs) The rating reaffirmation factors in the experienced management, improved financial risk profile with adequate liquidity and diversified customer and supplier base. The rating is, however, constrained by its working Capital intensive nature of business, vulnerability of its profitability to fluctuation in raw material prices, debt funded expansion and stiff competition in the Industry. .

BWR believes that the business risk profile of F. T. Textiles Pvt. Ltd. will be maintained over the medium term, and the 'Stable' outlook assigned 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 the revenues go down and profit margins show lower than expected figures on a continuous basis.

KEY RATING DRIVERS

Credit Strengths:

Experienced Promoters :
The promoters of the company Mr. Faiyazuddin Nizamuddin Mulla & Mrs. Reshma Mulla have been in the industry for more than two decades. They are supported by a team of highly educated individuals.
Improved financial risk profile :
The financial risk profile of the company is marked by improvement in scale of operations, profitability and Tangible Networth. The Revenue of the company has increased to Rs.263.77 Crs in FY 22 provisional compared to Rs.162.88 Crs in FY 21, EBITDA has increased to Rs.13.59 Crs in FY 22 provisional, compared to Rs.11.60 Crs in FY 21. The debt to equity ratio remained below unity at 0.39 times as on 31st March, 2022 (Provisional) as compared to 0.54 times as on 31st March, 2021. The interest coverage ratio (ISCR) and debt service coverage ratio (DSCR) of the company are also comfortable at 7.57 times and 5.26 times respectively in FY22 provisional, although they are lower than the respective figures of 9.30 times and 7.41 times in FY 21. As per information shared by the management, the company achieved revenue of Rs.187.00 Crs till 30th September 2022 from 1st April 2022.
Diversified customer and supplier base :
The company has a diversified customer profile and is catering to various geographies. Thus the company has limited customer and supplier concentration risk.

Credit Risks:

Profitability exposed to fluctuation in raw material prices :
The company’s profit margins are exposed to the fluctuation in raw material prices, which depend on factors like seasonality, monsoon condition, international demand and supply situation, export policy etc.
Intense competition in the industry :
The spinning industry is highly fragmented and competitive with the presence of a large number of organised and unorganised players. Intense competition in the industry and commoditised nature of the product limit FTTPL’s pricing flexibility and bargaining power.
Working Capital intensive nature of business :
The operations of the company, which is into textile business, is working capital intensive, where high inventory & receivables are required to be maintained. The same is also reflected in its high conversion cycle of 89 days in FY 21 and 65 days in FY 22 provisional.
Debt Funded Expansion :
The company had a capex in tune of Rs 35.00 Crs all of which is funded by long term borrowings. The company has further expansion plans 80% of which shall be funded by debt & the remaining by promoter's contribution & internal accruals.

ANALYTICAL APPROACH - Standalone

Standalone

RATING SENSITIVITIES

Positive Triggers:

Increase in scale of operations and profits on a sustained basis.
Improvement in EBITDA margin and Net profit Margin on a consistent basis
Increase its Net Worth and the operating efficiency of the company

Negative Triggers :

Decline in Revenue & deterioration of the financial position of the company, including deterioration in debt protection metrics and liquidity on a continuous basis.
Delay in payments of its debt obligations.

LIQUIDITY INDICATORS - Adequate

The liquidity of the company stands adequate as reflected by the comfortable cash credit utilization ~at 35% for the last six months ended September 2022. Liquidity is further supported by a comfortable ISCR & DSCR of 7.57 times and 5.26 times respectively in FY 2022 provisional, and going forward the same ratios are expected to be maintained at the same level. The EBITDA stood comfortable at Rs.13.59 Crs in FY 22 provisional. Also, the current ratio stood comfortable at 3.00 times in FY 22 provisional (FY21:2.39 times). The Cash and Balances stood at Rs.0.18 Crs in FY 22 provisional compared to Rs.0.16 Crs in FY21.Though the company is expected to avail new term loans in the next fiscal, the. Projected Net Cash accruals of Rs.12.36 Crs will be adequate to take care of repayment obligations amounting to Rs.6.50 Cr in FY23.

ABOUT THE ENTITY

F. T. Textiles Pvt Ltd (FTTPL) was set up in 2009 in Thane (Maharashtra) by Mr. Fayyazuddin Mulla. It manufactures grey cloth, and shirting fabric. The manufacturing facility is located in Bhiwandi, Thane, Maharashtra. The company produces shrink resistance raymond cotton fabric, shrink resistance cationic fabric, solid color micro fabrics, color fastness Indonesia fabric, etc.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	162.68	203.56
EBITDA	Rs.Crs.	11.60	13.08
PAT	Rs.Crs.	6.69	7.51
Tangible Net Worth	Rs.Crs.	40.73	34.04
Total Debt/TNW	Times	0.54	0.33
Current Ratio	Times	2.39	2.65

KEY COVENANTS OF THE FACILITY RATED

Usual Covenant for bank Loan rating

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

India Ratings Rated IND B+/Stable/A4;Issuer Not Cooperating vide its press release dated 02nd August 2022.
CARE Ratings Rated IND BB+/Stable/A4+;Issuer Not Cooperating vide its press release dated 08th October 2021.

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	53.48	BWR BBB-/Stable (Reaffirmation)	23Jul2021	BWR BBB-Stable (Reaffirmation)	26Mar2020	BWR BBB-Stable (Assignment)	NA	NA
Non Fund Based	ST	0.45	BWR A3 (Reaffirmation)	23Jul2021	BWR A3 (Reaffirmation)	26Mar2020	BWR A3 (Assignment)	NA	NA
Grand Total		53.93	(Rupees Fifty Three Crores and Ninety Three lakhs Only)

Rating Advisory, as on 09Aug2022
Press Release, as on 09Aug2022
Issuance of Advisory due to dealey in Rating Review.

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
Saroj Kumar Das Ratings Analyst sarojkumar.d@brickworkratings.com	Anuradha Gupta Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

F. T. Textiles 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	Bank of Maharashtra	Term Loan - Out-standing	0.40	_	0.40
2	Bank of Maharashtra	Term Loan - Out-standing	0.07	_	0.07
3	Bank of Maharashtra	Term Loan - Out-standing	0.30	_	0.30
4	Bank of Maharashtra	Term Loan - Sanctioned	0.92	_	0.92
5	Bank of Maharashtra	Term Loan - Sanctioned	9.15	_	9.15
6	Bank of Maharashtra	Term Loan - Sanctioned	10.20	_	10.20
7	Bank of Maharashtra	Term Loan - Sanctioned	12.05	_	12.05
8	Bank of Maharashtra	Term Loan - Sanctioned	3.89	_	3.89
9	Bank of Maharashtra	Term Loan - Sanctioned	3.50	_	3.50
10	Bank of Maharashtra	Cash Credit - Sanctioned	13.00	_	13.00
11	Bank of Maharashtra	Standby Line of Credit - Sanctioned	_	_	0.00
12	Bank of Maharashtra	Bank Guarantee - Sanctioned	_	0.45	0.45
13	Bank of Maharashtra	Emergency Credit Line Guarantee Scheme (ECLGS) - Sanctioned	_	_	0.00
Total			53.48	0.45	53.93
TOTAL (Rupees Fifty Three Crores and Ninety Three lakhs Only)

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