Srinivasa Textiles - Brickwork Ratings

Rating Rationale
Brickwork Ratings assigns ‘BWR A4’ for the Bank Loan Facilities
aggregating ₹ 8 Cr of Srinivasa Textiles
Brickwork Ratings (BWR) has assigned the following Rating1 for the Bank Loan Facilities of
₹ 8 Cr of Srinivasa Textiles (ST or ‘the concern’):
Amount
( ₹ Cr)
Tenure
Rating
Fund Based
FBN/FBP/FBD/AAFBSC
Sub limit -PC (LC/FO-DP/PA)
8.00
(2.25)
Short Term
BWR A4
(Pronounced BWR A Four)
Total
8.00
Facility
(INR Eight Crores only)
BWR has principally relied upon the audited financial results up to FY14 and projected
financials of FY15 of ST, publicly available information and information/clarification provided
by the concern.
The ratings reflect the extensive industry experience of the Proprietrix, satisfactory and
established track record of operations. The ratings are, however, constrained by ST’s small scale
of operations, small net worth and increasing gearing levels, thin profit margins and stretched
liquidity position, susceptibility of profitability due to volatility in raw material prices and
adverse movement in the foreign exchange rates.
Background:
Srinivasa Textiles is a proprietorship concern was established in 1991 by Mrs. M.Nagarathinam
at Virudhunagar, Tamilnadu. They are manufacturer and exporter of 100% cotton Grey fabrics &
Gauze Cloth, Cotton Dust sheet & drop Cloth, Cotton Cloth Bag. The concern has own
manufacturing unit and the production capacity for the unit is 7x 40 feet container goods per
month and the concern has made 100% capacity utilisation per month.
ST exports the products to UK an Italy and they get the raw materials from Tamilnadu.
They market the products through the commission agents and brokers. At present the concern
has a total strength of 190 employees for production. They work six days in a week with 3 shifts
(8 Hours/Shift).
Management
Mrs. M.Nagarathinam is Proprietrix of the concern. She has more than two decades of
experience in the same industry. Mr.Sangiliraj S/O. Mrs.Nagarathinam is Chief Executive
Officer of the concern has been taken in charge of management.
1
Please refer to www.brickworkratings.com for definition of the Ratings
www.brickworkratings.com
1
18 Dec 2014
Financial Performance
ST reported a profit after tax (PAT) of ₹0.78 Cr. on Net Sales of ₹26.67 Cr. for FY 14 as against
profit after tax (PAT) of ₹0.25 Cr. on Net Sales of ₹21.00 Cr. for FY13. Tangible net worth stood
as on March 31, 2014 was ₹2.42 Cr. Debt to Equity ratio is declined to 3.42 times in FY 14 from
3.31 times in FY13 due to enhancement in short term borrowings. Current ratio is marginally
varied to 1.02 times in FY14 from 1.03 times in FY13.
Outlook
Going ahead, the ability of the concern to improve its liquidity profile along with increase in
scale of operations as well as improvement in Profitability margins and effective working capital
management would 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
18 Dec 2014