Venus Safety & Health Pvt. Ltd.

Brickwork Ratings downgrades the long term rating at BWR BBB-/Stable & reaffirms the short term rating at BWR A3 for the Bank Loan Facilities of Rs. 50.37 Crs. of Venus Safety & Health Pvt. Ltd.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (26 Aug 2021)	Present
Fund Based	63.00	50.37	Long Term	BWR BBB/Stable Upgrade	BWR BBB - /Stable Downgrade
Fund Based	(2.00)	(2.00)	Short Term	BWR A3 Reaffirmation	BWR A3 Reaffirmation
Grand Total	63.00	50.37	(Rupees Fifty Crores and Thirty Seven 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 Long term rating of the Bank Loan Facilities of the entity Venus Safety & Health Pvt. Ltd has been downgraded at BWR BBB-/Stable & reaffirmed the short term rating at BWR A3. Brickwork Ratings (BWR) has essentially relied on the audited financial statements of Venus Safety & Health Pvt. Ltd up to FY21, provisionals of FY22, projections upto FY24 publicly available information, and information/clarifications provided by the company’s management and its bankers to arrive at the present ratings BWR believes that the business risk profile of Venus Safety & Health Pvt. Ltd will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The ratings have been reaffirmed on account of the experience of the management, reputed client base & Impact of Covid 19. The rating is however constrained due to Declining Scale of Operations and Profitability, Forex Risk & Intense Competition.

KEY RATING DRIVERS

Credit Strengths:

Experienced Management :
Both the directors of the company are having more than three decades of experience in their respective fields. Also the management team is supported by experienced staff members which help the company run day to day business in an efficient way.
Financial Risk Profile :
TNW of the company has increased to Rs. 220.41 Crs. in FY22 as compared to Rs. 169.87 Crs in FY21 & as projected at Rs 236.48 Crs in FY23 & Rs 253.56 Crs in FY24.

The company has a moderate financial risk profile as (TotalDebt/TNW) & (TOL/TNW) is 0.25X & 0.50X in FY22 which has reduced to 0.36X & 0.85X in FY21.

Debt Protection Metrics of the company is adequate to service the debt obligations with ISCR and DSCR standing at 16.55x and 7.21x respectively in FY22 as compared to 50.50x and 15.23x respectively in FY21.

The operating margins stood at 25.59% in FY22 as compared to 39.40% in FY21 & projected 22.19% & 19.27% in FY23 & FY24 respectively.

Liquidity of the company is adequate with Current Ratio standing at 1.91x in FY22 as compared to 1.59x in FY21.
Reputed Client Base :
The company has a reputed clientele which includes the Aditya Birla Group, Indian Railways, JSW Steel etc keeping the counter party risk low. Repeat orders from reputed customers reflects favourably on its acceptable product quality
Impact of Covid 19 :
The global pandemic has led to a massive increase in demand for these products, coupled with unit shortages, have caused average sale prices to increase globally. The company is committed towards supporting public health organizations in combating the COVID-19 pandemic. To fulfill this objective, the company is ramping up its production of respirators and protective masks in manufacturing facilities.

Credit Risks:

Declining Scale of Operations and Profitability :
The company is highly dependent on sale of mask as 95% of sales is from sale of masks. As Covid has ended sales of masks has become Nil more due to the large supply of mask from China. They are concentrating on production of medical & health care services & industrial protection gears. The sales has come down in FY22 & projected to decline in FY23. TOI has declined to Rs 296.94 Cr in FY22 v/s Rs 381.28 Cr in FY21. TOI of the company projected to decline more to Rs 150 Cr in FY23. They have only achieved sales of Rs 67.41 Crs in 8 month period i.e. Apr - Nov 2022. PAT has declined to Rs 50.53 Cr in FY22 v/s Rs 109.52 Cr in FY21 on account of decline in sales. Further more the company projected to decline in PAT to Rs 16.06 Crs in FY23.
Susceptibility to regulatory changes & Exposed to Forex Risk :
The company is exposed to risks associated with foreign exchange rate fluctuations as well as business risk associated with the exports. The company making payment of Import of raw material against Export Proceeds to mitigate the foreign exchange fluctuation risk. The entity is not booking forward contract hence is imposed to currency fluctuation risk.
Intense Competition :
Though the demand prospects for personal protective equipment remain good, VSHPL remains exposed to intense competition from various organized and unorganized players. Further, there has been a increase in around 2 million suppliers of mask globally which is expected to impact the growth of the company negatively.

ANALYTICAL APPROACH - Standalone

For arriving at its rating BWR has analyzed the financials based on Standalone and the company has no group entity.

RATING SENSITIVITIES

Going forward, the ability of the company to improve its growth in the operating revenue, improving the profitability margins and maintaining the current trend of the financial risk profile will be the key rating sensitivities.

Positive: The rating outlook maybe revised to 'Stable' in case the revenues and profit show a sustained improvement backed by healthy liquidity

Negative: The rating outlook may be revised to 'Negative' if the company achieves lower revenue than projected. Any additional borrowing by the company which may lead to further deterioration in the financial risk profile such as Debt/Equity ratio, debt protection metrics and profit margins.

LIQUIDITY INDICATORS - Adequate

The liquidity position of the company is adequate with current ratio of 1.91x in FY22.

The net cash accurals is Rs 58.01 Crs as against the debt obligations Rs 4.55 Crs in FY22 as compared to net accurals of Rs 26.86 Crs as against debt obligations of Rs 4.55 Crs in FY23.

The cash & cash balance stands at Rs 51.99 Crs as on 30th Sept 2022.

Average cash credit utilization stands at Rs 43.96% includes period from Feb - Oct 2022.

NDS

Client has been submitting NDS on regular basis.

ABOUT THE ENTITY

VENUS Safety & Health Pvt. Ltd. is a global quality manufacturer of Personal Protective Equipments (PPE) based in Navi Mumbai. VENUS, a 100% Indian company has grown manifold in volume and revenues since its inception in year 1986.Their products consists of a wide range of Neck up PPE’s equipment includes Respiratory Protection (Disposable & Reusable), Hearing Protection (Earplugs & Earmuffs), Eye Protection (Spectacles & Goggles) & Head Protection (Helmets) products. The company has launched Stay Cool Butterfly Vent Valve, which is now incorporated in the disposable respirator series. The design facilitates easy and comfortable breathing. The Valve efficiently expels warm exhaled air high in CO2 % & allows fresh air to enter through the filter maximizing the comfort to the user. VENUS manufacturing plants operates as per the safety standards. VENUS adheres to the National Factories Act & Rules in all its manufacturing plants and ensures compliance with these regulations through its entire supply chainThe processes and procedures in all VENUS manufacturing plants have been certified in accordance with ISO 9001:2015 and are audited annually by BUREAU VERITAS. The certified facilities produce and supply products conforming to: · American Standards 42 CFR Part 84 · European Standards EN 149 EN140 EN143 EN14387 · Malaysian SIRIM Standards · AS/NZS Standards 1716:2012 · Indian Standards IS 9473 IS 14746 IS 14166 IS 15323 IS 10245(II) IS 10245(III) IS 2925 IS 9167 IS 5983

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21-22 (Provisional)	FY 20-21 (Audited)
Operating Revenue	Rs.Crs.	296.94	381.28
EBITDA	Rs.Crs.	75.99	150.21
PAT	Rs.Crs.	50.53	109.52
Tangible Net Worth	Rs.Crs.	220.41	169.87
Total Debt/TNW	Times	0.25	0.36
Current Ratio	Times	1.91	1.59

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

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	50.37	BWR BBB-/Stable (Downgrade)	26Aug2021	BWR BBBStable (Upgrade)	13Jul2020	BWR BBB- Stable (Assignment)	NA	NA
Fund Based	ST	0.00	NA	NA	NA	13Jul2020	BWR A3 (Assignment)	NA	NA
FB SubLimit	ST	(2.00)	BWR A3 (Reaffirmation)	26Aug2021	BWR A3 (Reaffirmation)	13Jul2020	BWR A3 (Assignment)	NA	NA
Grand Total		50.37	(Rupees Fifty Crores and Thirty Seven lakhs Only)

Rating Advisory, as on 30Aug2022
Press Release, as on 30Aug2022
Advisory was published as the client had not provided the Audited Financials for FY22.

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
Suman Prabitra Paul Ratings Analyst suman.p@brickworkratings.com	Sushil Kumar Chitkara Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Venus Safety & Health 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	Thane Janata Sahakari Bank (TJSB)	Term Loan - Sanctioned	20.37	_	20.37
2	Thane Janata Sahakari Bank (TJSB)	Cash Credit - Sanctioned	30.00	_	30.00
	Sub-Limit (EPC/FDB/FBN/FBP/AEBC) - Sanctioned		(2.00)
Total			50.37	0.00	50.37
TOTAL (Rupees Fifty Crores and Thirty Seven lakhs Only)

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