Rating Rationale

Rating Rationale
Brickwork Ratings assigns ‘BWR BB-’ for the Bank Loan Facilities aggregating ₹
12.49 Cr of P R S Rice Mill.
Brickwork Ratings (BWR) has assigned the following Rating1 for the Bank Loan Facilities
(Existing and Proposed) of P R S Rice Mill (“PRSRM” or “the Firm”):
Facility
Existing
Proposed
Limits
Limits *
(₹ Cr)
(₹ Cr)
Fund Based:
Cash Credit
6.99
Term Loans
0.49
Total
Tenure
BWR BB-
12.00
0.49
12.49
Rating
Long Term
(BWR Double B Minus)
Outlook : Stable
(INR Twelve Crores and Forty Nine Lakhs only)
* PRSRM has approached its bankers for enhancement of Bank Facilities.
BWR has essentially relied upon the firm’s audited financial results upto FY14,
available information and the information/clarifications provided by the firm.
publicly
The rating reflects the extensive experience of the partners in the rice milling industry, strengths
derived from the group concerns engaged in similar line of business and the healthy growth
prospects of the industry. However, the rating is constrained by the modest scale of operations,
thin profitability and low net worth, intensely competitive and fragmented nature of the
industry, exposure to agro climatic risks, volatility in raw material prices and working capital
intensive nature of operations.
Background:
P R S Rice Mill (PRSRM) is a Partnership Firm, set up in 2011 at Bangarpet. PRSRM is engaged
in rice milling. While the main product of the firm is rice, the firm also sells broken rice, maize
and wheat. The firm’s manufacturing unit is located in Kolar Road, Bangarpet, Karnataka. The
products are sold in major cities of Karnataka, Kerala and Tamil Nadu under the brand name of
“Double Elephant” in various bag sizes of 25, 50 and 75 kgs. The firm has two associate
concerns PRS and Co & PRS Traders which are engaged in similar line of business since 1996.
Management
PRSRM is a family owned business and the partners of the firm are Mr Raghunathasetty, Mr. R
Parthasarathy, Ms G S Shilpa, Ms G Indira and Ms Lalitha Kumari, who own equal share of 20%
each. All the partners are well experienced in this industry
1
Please refer to www.brickworkratings.com for definition of the Ratings
www.brickworkratings.com
1
15 Oct 2014
Financial Performance
Net Revenue from Operations of the Firm has increased from ₹ 26.73 Crores in FY 13 to ₹ 39.63
Crores in FY 14. Profit after tax increased from ₹ 0.06 Crores in FY 13 to ₹ 0.10 Crores in FY 14.
PRSRM's net worth stood at ₹ 2.59 Crores as of March 31, 2014. On a provisional basis, the
firm has achieved sales of ₹ 21.00 Crores for the period Apr- Sep 2014.
Rating Outlook
The outlook is expected to be stable for the current year. Going ahead, the ability of PRSRM to
increase its scale of operations, strengthen its capital structure, improve its financial risk profile
and manage its working capital efficiently shall be the key rating sensitivities.
Analyst Contact
Relationship Contact
[email protected]
[email protected]
Phone
Media Contact
1-860-425-2742
[email protected]
Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,
which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or
completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied warranty
of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR
should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses
incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any
reasons.
www.brickworkratings.com
2
15 Oct 2014