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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 25.00 | ACUITE A- | Stable | Assigned | - |
| Bank Loan Ratings | 156.00 | ACUITE A- | Stable | Reaffirmed | - |
| Total Outstanding | 181.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE A-’ (read as ACUITE A minus) on the Rs.156 Cr. bank facilities of Shreyas Sortex Industries Private Limited (SSIPL). The outlook is 'Stable'.
Further, Acuité has assigned its long-term rating of ‘ACUITE A-’ (read as ACUITE A minus) on the Rs.25 Cr. bank facilities of Shreyas Sortex Industries Private Limited. The outlook is 'Stable'. Rationale for rating The rating reaffirmation takes into account the steady growth in the revenues in 9MFY25 driven majorly by the increased demand of basmati rice and stable realisations. Further, the 9MFY25 margins have also improved marginally on account of efficiency of operations. Moreover, the rating continues to factor in the established brand presence of the company in domestic market, healthy financial risk profile and strong liquidity. The working capital however remains intensive owing to the practice of maintaining aged inventory for higher premiums. However, the business continues to remain susceptible to agro-climatic risk thereby affecting the availability of raw materials and vulnerability of prices to government regulations. |
| About the Company |
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Incorporated in 2015, Shreyas Sortex Industries Private Limited (SSIPL) is engaged in milling and processing of basmati and non-basmati rice. The manufacturing facility of the company is located at Balia in Uttar Pradesh, equipped with an installed capacity of 74 MTPA (increased from 54 MTPA in September, 2024). The rice is procured from various stockists or from mandi, processed and is further sold under its own brands viz. Suhela and Shreyas across various parts of India with highest presence in Northern region followed by Eastern states like Bengal and Assam; and further Southern and Western region. The company is currently managed by Mr. Vinay Kumar Singh and Mr. Tara Singh.
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| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
| Acuité has considered the standalone financial and business risk profile of SSIPL to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management
The company is promoted by family having rich experience in manufacturing of basmati and non-basmati rice. Their experience has lead to improvement in scale of operations year on year and established relations with their suppliers and customers which ensures the continuous growth in the operations of the business. Growing scale of operations & profitability The company is dependent on paddy which comprises the primary raw material for milling & processing of rice, which is also in turn differs in terms of quality, depending upon the type of rice to be milled. SSIPL’s revenue stood increased to Rs.1,464.11 Cr. in FY24 as against Rs.1,050.21 Cr. in FY23 on account of high sales of basmati rice due to increase in domestic demand. Further, the rice production in India also stood better on account of better acreage coupled with increasing demand in the country especially in Eastern and Northern region. Further, promoted by increasing volumes and stable realizations, the company has recorded revenue of Rs.2,124.89 Cr. as on 28th February, 2025. The EBIDTA margin of the company increased from 3.29% in FY23 to 7.56% in FY24 on the account of higher revenue contribution from aged rice (12 months of ageing). The higher revenues positively affect the absorption of employees and other costs which resulted in higher margins. The PAT margin stood at 4.63% in FY24 as against 1.47% in FY23. Healthy financial risk profile The company’s financial risk profile is marked by healthy net worth, gearing and debt protection metrics. The tangible net worth of the company improved to Rs.182.37 Cr. as on 31st March, 2024, from Rs.69.72 Cr. as on 31st March, 2023, due to accretion of profits in reserves and treatment of unsecured loans as quasi equity. This coupled with decrease in debt led to improvement in the gearing to 0.86 times as on 31st March, 2024 as against 2.92 times as on 31st March, 2023. The debt protection metrics of the company is also stood comfortable marked by Interest Coverage Ratio (ICR) at 6.89 times and Debt Service Coverage Ratio (DSCR) at 4.22 times as on 31st March, 2024. Going forward the financial risk profile of the company will improve backed by steady accruals. |
| Weaknesses |
| Moderate working capital operations
The moderate working capital management of the company is marked by Gross Current Assets (GCA) of 121 days as on 31st March, 2024 as compared to 91 days as on 31st March, 2023. The GCA days are moderate on account of inventory days which are high at 115 days due to ageing. Further, the working capital operations of the company will remain almost at the same levels as company is charging premiums based on ageing of the inventory. The company takes 30 day’s credit period from their suppliers. The enhanced limits of Rs. 25 Cr. for short-term funds shall help in the collection period owing to cash discounts /rebates will be offered to the customers. More than 99% of the debtors are within 3 months as on 31st December, 2025. Fragmented nature of industry and regulatory risk The rice industry has an intense competition due to low entry barriers which limits the price fixing of the product. In addition to that, government influences the price of the rice in the market by declaring the MSP (Minimum Support Price) which may affect the profitability of the rice miller. |
| Rating Sensitivities |
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| Liquidity Position |
| Strong |
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The company has strong liquidity marked by sufficient net cash accruals to its maturing debt obligations. The net cash accruals of the company stood at Rs.72 Cr. against debt repayment obligation of Rs.4.73 Cr. in FY24. Going forward, the net cash accruals are expected to be in the range of Rs.115-120 Cr. through FY2025-27 against repayment obligations of Rs.3.50-3.80 Cr. The working capital operations of the company are moderate in nature with GCA of 121 days in FY24. Therefore, the reliance on working capital limits is also moderate at 72.66% utilisation levels for last 7 months ending February 2025. The company has cash and bank balance of Rs.5.90 Cr. and current ratio of 1.50 times as on 31st March, 2024.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 1464.11 | 1050.21 |
| PAT | Rs. Cr. | 67.86 | 15.42 |
| PAT Margin | (%) | 4.63 | 1.47 |
| Total Debt/Tangible Net Worth | Times | 0.86 | 2.92 |
| PBDIT/Interest | Times | 6.89 | 3.76 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite) |
| Not applicable |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.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 |
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