Press Release January 02, 2025 Rankers International Private Limited Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	20.00	ACUITE BBB | Stable | Assigned	-
Bank Loan Ratings	90.00	-	ACUITE A3+ | Assigned
Total Outstanding	110.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned its long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) and short-term rating of 'ACUITE A3+' (read as ACUITE A three plus) on Rs.110.00 crore of bank facilities of Rankers International Private Limited (RIPL). The outlook is ‘Stable’. Rationale for rating assigned The rating assigned factors in the established track record of the company along with the extensive experience of the promoters and healthy growth in the revenue on y-o-y basis with improving margins. The rating further takes into account the moderate financial risk profile of the company. However, these strengths are partly offset by the moderately intensive working capital operations. Also, the company operates in a highly fragmented industry, characterized by a large number of both organized and unorganized players, and is also significantly affected by climatic conditions.

About the Company

Incorporated in 2004, RIPL is engaged in the business of processing and trading of various grade of salt such as industrial, edible, de-icing and drilling salts. The company runs its operations from Kutch, Gujarat. The company procures salts from local salt works and processes the same in its washery to make it fit for use. The current directors of the company are Mrs. Dinaz Adil Sethna, Mr. Trimurtulu Sarayya Rayudu, Mr. Adil Faramroz Sethna, Mr. Ravi Chand Nune, Ms. Sujatha Rani Nune.

Unsupported Rating

­Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of RIPL to arrive at the rating

Key Rating Drivers

Strengths

Established track record of operation with experienced management Situated in Kutch, RIPL has been engaged in the business of salt processing & trading for almost two decades. The company is owned and managed by two families, Rayudu and Sethna family, who are involved in this industry since 1980.  This extensive experience of the promoters has benefited the company in achieving a CAGR of 54 percent in the last two years. Further, the company is majorly involved in exports (~77% in FY24) of industrial salt to China, South Korea, Kuwait, Qatar and Singapore, also supplies salt to various reputed domestic players such as Tata Chemicals Ltd and Nirma Limited for industrial uses. Further, the company also supplies de-icing and edible salts. Acuite believes that RIPL will continue to benefit from its established track record of operations and experience of its management team. Significant growth in operating performance along with profitability The company achieved a revenue of Rs. 565.63 crore in FY24, compared to Rs. 441.36 crore in FY23 and Rs. 237.05 crore in FY22. This is driven by company’s continuous focus on increasing its volumes, which increased from 1.63 MMT in FY23 to 2.15 MMT in FY24. Further, while 50 percent of the cost for the company constitute of freight charges, pass through of the same to customers combats the volatility of these costs. Also, being situated close to the Kandla port provides advantage to the company for vessel availability. Additionally, with increasing efficiency of operations, the company's operating margins have improved over the years, standing at 3.16% in FY24 compared to 2.24% in FY23. The company registered a trade volume of 2.2 MMT, generating a revenue of Rs. 670 crores as of December 10, 2024. Moderate Financial risk profile The financial risk profile of the company remained moderate, marked by a moderate net worth, moderate gearing, and healthy debt protection metrics. The net worth of the company stood moderate at Rs. 37.03 Cr. as on March 31, 2024 as against Rs. 24.6 Cr. as on March 31, 2023. The increase in net worth is primarily due to the accretion of profits to the reserves. The gearing of the company stood at 2.29 times as on March 31, 2024 as against 2.39 times as on March 31, 2023 on account of increase in working capital borrowings. Furthermore, the company plans to increase its working capital limits and secure a commercial vehicle loan to acquire trucks for logistics operations. Also, the company is expected to procure another washery in FY26 at an estimated cost of Rs 4 crore to sustain heavy volumes. The TOL/TNW stood at 3.11 times as on March 31, 2024 as against 4.27 times as on March 31, 2023. The debt protection metrics remained healthy with DSCR and Interest coverage ratio standing at 22.84 times and 30 times respectively as on 31st March 2024. Acuite believes that the financial risk profile of the company may continue to remain moderate with steady cash accruals to fund capex, in the near to medium term.

Weaknesses

Moderately Intensive Working capital operations. The company's working capital operations remains moderately intensive, as indicated by GCA days of 91 days in FY 2024, compared to 102 days in FY 2023. The GCA days are primarily driven by high debtor days, which were 57 days in FY 2024, down from 75 days in FY 2023. Most of the company's customers are supported by sight letters of credit (LC) and usance LC, offering an average credit period of 30-60 days. Further, the inventory days for the company stood at 16 days in FY24 as against 10 days in FY23. The company's creditor days decreased to 19 days in FY2024 from 36 days in FY2023. Acuite believes that the working capital operations of the company will continue to remain moderate on account of the nature of operation. Profitability susceptible to climatic conditions and presence in the highly fragmented salt industry The salt industry is highly fragmented with presence of numerous regional and unorganized players. Further, the business is seasonal and highly dependent on weather conditions and remains exposed to natural calamities. Salt business has been affected in the past due to natural calamities in Kandla region alongwith reduced exports. However, RIPL’s salt’s strategic location in terms of its proximity to Kandla Port provides some benefit to the entity with sizeable exports of salt from India

Rating Sensitivities

Improvement in working capital operations Improvement in profitability margins.

Liquidity Position

Adequate

The liquidity position of RIPL is adequate with net cash accruals (NCA) of Rs.13.01 crore in FY24 as against no major repayment obligations in the same year. Further, it is expected that company will generate NCA in range of Rs.21-27 crore against the repayment obligations of less than Rs. 2 crore over the medium term. The current ratio of the company stood at 1.23 times in FY 2023-24. The average bank limit utilisation for last 6 months ended November 2024 also stood low at around 40 percent. Further, the company is also planning to take enhancement in its working capital limits by Rs. 50 crore to meet its growing working capital requirement. Further, the company maintained a healthy cash and bank balance of Rs. 26.06 Crore as on March 31, 2024. Acuite believes that the liquidity position of the company will continue to remain adequate on account of steady cash accruals.

Outlook : Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	565.63	441.36
PAT	Rs. Cr.	12.43	7.61
PAT Margin	(%)	2.20	1.72
Total Debt/Tangible Net Worth	Times	2.29	2.39
PBDIT/Interest	Times	30.00	14.83

Status of non-cooperation with previous CRA (if applicable)

­None

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History :

­Not Applicable

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bank of Baroda Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 40.00 Simple ACUITE A3+ | Assigned Bank of Baroda Not avl. / Not appl. Post Shipment Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE A3+ | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE BBB | Stable | Assigned Not Applicable Not avl. / Not appl. Proposed Packing Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE A3+ | Assigned

Contacts

Mohit Jain Senior Vice President - Rating Operations Parth Patel Lead Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.