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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 16.00 | ACUITE BB+ | Reaffirmed & Withdrawn | - |
| Bank Loan Ratings | 28.00 | Not Applicable | Withdrawn | - |
| Bank Loan Ratings | 227.00 | - | ACUITE A4+ | Reaffirmed & Withdrawn |
| Bank Loan Ratings | 29.00 | - | Not Applicable | Withdrawn |
| Total Outstanding | 0.00 | - | - |
| Total Withdrawn | 300.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed & withdrawn its long-term rating to ‘ACUITE BB+’ (read as ACUITE double B plus) and its short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.243.00 Cr. bank facilities of Accord Chemical Corporation (ACC). The rating is being withdrawn on account of request received from the company and No Objection Certificates (NOCs) received from the lenders.
Acuité has withdrawn the long-term and short-term rating of Rs. 25.00 Cr. bank facility without assigning any rating as instrument is fully repaid of Accord Chemical Corporation (ACC). The rating is being withdrawn on account of request received from the company and No Due Certificate (NDC) received from the lender. Acuité has withdrawn the long-term and short-term rating of Rs. 32.00 Cr. facility without assigning any rating as it is a proposed facility of Accord Chemical Corporation (ACC). The rating is being withdrawn on account of request received from the company. The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument. Rationale for rating The rating of group considers the healthy Net worth and the rating also draws comfort from the experienced promoters and the group’s long track record in the industry. These strengths are however, offset by the working capital-intensive in nature of operations along with the regulatory industry. |
| About the Company |
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Incorporated in 2009, Accord Chemical Corporation (ACC), a Mumbai-based partnership firm, is engaged in trading, indenting, distribution, imports, and exports of various petrochemicals. It is led by its partners, Mr. Jinesh Shah and Mrs. Meghna Shah, who have more than two decades of experience in the petrochemical industry. Jinesh Shah used to work at Tresent Organics as a business manager for around 10 to 12 years before launching his own firm.
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| About the Group |
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Incorporated in 2014, Accord Chemcorp Private Limited has been established with a vision to cater the fast-growing needs of the Chemical Industry in terms of providing the customers innovative solutions with dedicated and quality services. The company understands demands of various chemicals with the multiple industrial applications and give the upper edge to source and procure the products at competitive price and deliver the same to the customers to maintain cost effectiveness. The company is located at Borivali, Mumbai.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuite has considered the consolidated business and financial risk profile of Accord Chemical Corporation (ACC) and Accord Chemcorp Private Limited (ACPL) together referred to as Accord Group. The consolidation is mainly on account of the similar line of business and common management. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established track record of operations
The group has established a presence since 2009 and is engaged in trading, indenting, distribution, imports, and exports of various petrochemicals. Accord Group is promoted by Mr. Jinesh Shah and Mrs. Meghna Shah. The promoters have over two decades of experience in the trading business. The group benefits from its experienced management, which is reflected in its healthy turnover of more than ~Rs.1380 crore in FY2024 facilitated through its longstanding relationship with its customers and suppliers. This has ensured a steady flow of imports and exports of chemicals in a timely manner. Average financial risk profile The group has an average financial risk profile is marked by healthy net worth, comfortable gearing and healthy debt protection metrics. The revenue of the group stood at Rs.1380.10 Cr. in FY2024. The tangible net worth has increased to Rs. 96.73 Cr. as on FY2024 as compared to Rs.90.71 Cr. as on FY2023 due to accretion of reserves. The gearing of the group stood at 1.60 times as on FY2024 as compared to 1.57 times as on FY2023. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 3.71 times as on FY2024 as against 3.22 times as on FY2023. The debt protection metrics of the group marked by comfortable Interest Coverage Ratio (ICR) at 2.47 times as on FY2024 as compared to 3.12 times as on FY2023 and Debt Service Coverage Ratio at 2.37 times as on FY2024 as compared to 2.97 times as on FY2023. Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.07 times as on FY2024. Acuité believes that financial risk profile is expected to be remain average over the medium term in absence of major debt funded capex plans. |
| Weaknesses |
| Working capital intensive nature of operations
The working capital-intensive nature of operations of the group is marked by high Gross Current Asset days (GCA) of 79 days as on FY2024. The debtor days stood at 52 days as on FY2024. The inventory period stood relatively low at 146 days as on FY2024. Acuité believes that the working capital management of the group will remain intensive given the nature of the industry. Cyclicality associated with chemical industry and profitability remain susceptible towards foreign currency fluctuations The operations of the group are dependent primarily on imports and exports of chemicals. The sector is also marked by the presence of several other players, which leads to intense competition. Chemicals and the other by-products managed by the group remain extremely sensitive to fluctuations in commodity prices, thereby impacting the overall profitability and margin profile of the group. |
| Rating Sensitivities |
| Not Applicable |
| Liquidity Position |
| Adequate |
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The group’s liquidity position is adequate marked by net cash accruals of Rs. 10.07 Cr. as on FY2024 as against nil Cr. long-term debt repayment during the same period. The current ratio stood at 1.25 times as on FY2024, and same on FY2023. The cash and bank balances stood at Rs. 40.62 Cr. FY2024. However, the working capital-intensive nature of operations of the group is marked by Gross Current Assets (GCA) of 79 days. Acuité believes that going forward the liquidity position of the group will remain stretched due to the improving net cash accruals.
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| Outlook: Not Applicable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 1380.10 | 1347.91 |
| PAT | Rs. Cr. | 7.83 | 6.64 |
| PAT Margin | (%) | 0.57 | 0.49 |
| Total Debt/Tangible Net Worth | Times | 1.60 | 1.57 |
| PBDIT/Interest | Times | 2.47 | 3.12 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any Other Information |
| None |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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