Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 41.39 Crs. of Shri Anant Syntex Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (20 Sep 2021) |
Present | ||
| Fund Based | 39.00 | 40.39 | Long Term |
BWR BB+ /Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
| Non Fund Based | 1.00 | 1.00 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
| Grand Total | 40.00 | 41.39 | (Rupees Forty One Crores and Thirty Nine lakhs Only) | ||
BWR reaffirms the long term rating at BWR BB+ with “Stable” Outlook and short term rating at BWR A4+ for the bank loan facilities of Shri Anant Syntex Ltd
The rating draws strength from company old existence, management experience and client relations and moderate financial risk profile . However, the rating is constrained by stretched Liquidity, limited Price flexibility, with profits exposed to volatility in yarn price and high competition.
BWR believes that Shri Anant Syntex 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 company is in existence since 1986 and the management comprises of experienced promoters who have decades of experience in the textile Industry. The promoters have long term business associations with its clients, both suppliers and customers.
The Operating Income increased by 48 % from Rs 91.44 crs in FY21 to Rs 135.36 crs in FY22. The PAT increased to Rs. 3.53 cr during FY22 from Rs 1.62 crs in FY 21 (A). Operating Profit Margin declined from 11.55 % in FY21(A) to 10.78 % in FY22(A) . Net Profit Margin improved to 2.61 % in FY22(A) from 1.77 % in FY21(A).The tangible net worth has increased from Rs 29.32 crs in FY21(A) to Rs 33.95 crs. in FY22(A). Total Debt / TNW remained at constant level for FY 21 and FY 22 at 2.09 times. Moderate debt protection with Interest service Coverage Ratio (ISCR) improved marginally to 2.29 times in FY22(A) as against 2.14 times in FY21(A).Debt Service Coverage Ratio (DSCR) decreased from 1.44 times in FY21(A) to 1.08 times in FY21(A). The current ratio marginally improved from 1.42 times in FY21(A) to 1.63 times in FY22(A).
The liquidity metrics of the company are on a stagnant level as the CC utilization of the company is above 86% for last 6 months.
Any adverse movement in the price of raw materials could have an adverse impact on the company’s margins.
Shri Anant Syntex may expose high risk due to intense competition from the existing major players, local and entry barriers in the textile manufacturing sector. Intense competition reduces the pricing power of the industry players.
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 improve its revenues and Debt protection metrics would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and profit margins going forward.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the company including Debt protection metrics and current ratio.
LIQUIDITY INDICATORS - Stretched
Shri Anant Syntex Ltd have associate firm namely - Plaza tex India Pvt. Ltd, the firms have no business transaction with each other. The firm has Cash & Bank Balance of Rs 1.20 crs. in FY22(A). The current ratio is 1.63 times in FY22(A). Average CC utilization from January 2022 to October 2022 is 86%. The conversion cycle is 94 days in FY22(A). ISCR is 2.29 times in FY22(A). DSCR is 1.08 times in FY22 (A). Long term borrowings of Rs 48.56 Crs in FY 22 comprises of Unsecured loan of Rs 17.74 crs from Promoters (9% interest bearing), Rs 18.61 crs as Term loan from PNB and Inter company borrowings of Rs 12.02 crs. CPLTD stands at Rs 6.30 Crs as on 31st March, 2022 against the net cash accruals of Rs 7.69 Crs in FY 23 (Proj).
ABOUT THE ENTITYShri Anant Syntex Limited established as a private limited firm in May 1986, now converted to a Limited Company since May 1997 has its registered office in Charbhujanath, L.N.T. Road, Bhilwara, Rajasthan. The firm is currently managed by three directors namely Mr. Anil Soni, Mr. Sunil Soni and Mr. Satvik Soni. The Company has two divisions. The company indulges in Weaving & Processing of fabrics & in Trading of the processed fabrics. One Unit is engaged in processing & dyeing of cloth on job work basis and Second unit is engaged in manufacturing of Fabrics, both of which units are located in Bhilwara, Rajasthan. The processing capacity of the manufacturing facility is 437.50 Lacs Mtrs. per Annum.
Advisory was issued on 31 October, 2022.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 21-22 (Audited) |
FY 20-21 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 135.36 | 91.44 |
| EBITDA | Rs.Crs. | 14.59 | 10.56 |
| PAT | Rs.Crs. | 3.53 | 1.62 |
| Tangible Net Worth | Rs.Crs. | 33.95 | 29.32 |
| Total Debt/TNW | Times | 2.09 | 2.09 |
| Current Ratio | Times | 1.63 | 1.42 |
Status of Non - Cooperation with any other CRA : CARE B-/Stable/A4 dated 23 August, 2022
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 | 40.39 |
BWR BB+/Stable
(Reaffirmation) |
20Sep2021 |
BWR BB+ Stable
(Reaffirmation) |
08Jun2020 |
BWR BB+ Stable
(Assignment) |
NA |
NA
|
| Non Fund Based | ST | 1.00 |
BWR A4+
(Reaffirmation) |
20Sep2021 |
BWR A4+
(Reaffirmation) |
08Jun2020 |
BWR A4+
(Assignment) |
NA |
NA
|
| Grand Total | 41.39 | (Rupees Forty One Crores and Thirty Nine 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 | Punjab National Bank | Term LoanOut-standing | 13.40 | _ | 13.40 | |
| 2 | Punjab National Bank | Cash CreditSanctioned | 19.50 | _ | 19.50 | |
| 3 | Punjab National Bank | GECLOut-standing | 7.49 | _ | 7.49 | |
| 4 | Punjab National Bank | Inland Letter of GuaranteeSanctioned | _ | 1.00 | 1.00 | |
| Total | 40.39 | 1.00 | 41.39 | |||
| TOTAL (Rupees Forty One Crores and Thirty Nine lakhs Only) | ||||||
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