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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 50.00 | ACUITE BBB | Stable | Assigned | - |
| Total Outstanding | 50.00 | - | - |
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Rating Rationale |
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Acuite has assigned the long-term rating to ‘ACUITE BBB‘ (read as ACUITE triple B) on Rs. 50 Cr. bank facilities of Annapurna Swadisht Limited. The outlook is ‘Stable’.
Rationale for Rating The company had exhibited a steady increase in scale of operations over the past three years as reflected from revenues of Rs. 264.97 Cr. in FY24 from Rs.11.83 Cr. in 2021, a growth of 21.40 per cent. This increase was due to setting up on new units with improving capacity utilisation, increasing presence across states other than West Bengal , and broader product portfolio. The rating also factors in the improving margins as reflected from operating margin of 10.72 percent in FY2024 as compared to 8.22 percent in FY2023 and 8.09 percent in FY2022 due to strategic expansion and promotional strategies. The PAT margin was 5.37 percent in FY2024 as compared to 4.46 percent in FY2023 and 4.68 percent in FY2022. The financial risk profile of the company is healthy marked by comfortable networth gearing and healthy debt protection metrics. Company had issued shares via preferential issue and share warrants. Proceeds from the share warrant will be used to repay a part of existing bank facilities and to fund present capex plans. The company has adequate liquidity marked by sufficient net cash accruals to repay the maturing long term debt obligations but low current ratio. Further, the operations of the company has intensive working capital cycle as reflected from Gross Current Assets (GCA days) of 174 days in FY2024 compared to 167 days in FY2023 and 602 days in FY2022. The rating is constrained by the presence in the food industry which is highly competitive with low entry barriers and presence of branded players. |
| About the Company |
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Annapurna Swadisht Limited (ASL) was originally incorporated as a Partnership Firm as “M/s Annapurna Agro Industries” dated November 27, 2015. It was formed by Mr. Ritesh Shaw and Mr. Sreeram Bagla with equal partnership ratio. The Partnership Firm was subsequently converted into Private Limited Company “Annapurna Swadisht Private Limited” on February 11, 2022. Further the Company was converted into a Public Limited Company and consequently, the name of the Company was changed to “Annapurna Swadisht Limited” with effect from July 8, 2022. The company got listed on SME Platform of NSE during the financial year 2022-23 w.e.f. September 27, 2022. The Company is engaged in the business of manufacturing of snacks like Fryums, Namkeen, Noodles, Extruded snacks, Confectionery, Candy, Sweets and Ready to drink. It is promoted by Mr. Shreeram Bagla, Mr. Ritesh Shaw, Mr. Sumit Sengupta, Mr. Chandan Ghosh, Mr. Rajesh Shaw, Ms. Rachna Yadav, Mr. Harish Ramanna Navarathna and Mr. Gajanan Prasad Sah Kalwar. The registered office is in kolkata.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has taken a standalone view of the business and financial risk profile of ASL to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Increasing Scale of Operations
The company had exhibited a steady increase over the past three years. Total operating income was Rs.264.97 Cr. in FY2024 as compared to Rs.160.17 Cr. in FY2023 and Rs. 11.83 Cr. in FY2022. This jump was due to widened presence in new states, better coverage of existing districts and broader product portfolio. The company reported a revenue of Rs.90 Cr. for the first quarter of FY2025. The EBITDA margin was 10.72 percent in FY2024 as compared to 8.22 percent in FY2023 and 8.09 percent in FY2022. This increase was due to better capacity utilisation leading to economies of scale, addition of new products and entry into higher margin products like noodles and confectionery. The company has also implemented promotional strategies that include in-pack gifts like coins or toys, which has been successful in attracting children and pulling demand. Acuité believes that the company is expected to improve on its scale of operation while maintaining margins over the medium term. Healthy Financial Risk Profile The financial risk profile of the company is moderate marked by comfortable networth, comfortable gearing and comfortable debt protection metrics. The tangible networth stood at Rs.116.13 Cr. in FY2024 as compared to Rs.59.73 Cr. in FY2023 and Rs. 8.45 Cr. in FY2022. The company is expected to infuse the share capital by way of preferential shares and share warrants monies. In case of preferential shares, Rs. 28.56 Cr. has been received fully in FY24. In case of share warrants, Rs. 26.92 Cr. has been received out of Rs. 36.88 Cr. which is expected to be received by FY25. The gearing stood comfortable at 0.50 percent in FY2024 compared to 0.40 percent in FY2023 and 0.93 percent in FY2022. The interest coverage ratio stood comfortable at 5.21 times in FY2024 compared to 7.78 times in FY2023 and 11.24 times in FY2022. The debt portfolio increase was due to capital expenditure (to increase capacities) and to meet working capital requirements to fund the significantly increased business operations. The debt service coverage ratio stood comfortable at 3.20 times in FY2024 compared to 4.66 times in FY2023 and 9.05 times in FY2022. The TOL/TNW stood at 1.00 times in FY2024 compared to 0.87 times in FY2023 and 2.65 times in FY2022. Acuite believes that the company’s financial risk profile will remain at a healthy level over the medium term backed by steady cash accruals and debt protection metrices. |
| Weaknesses |
| Moderate Working Capital requirements
The operations of the company have a moderate working capital cycle as reflected from Gross Current Assets (GCA days) of 174 days in FY2024 compared to 167 days in FY2023 and 602 days in FY2022. The inventory days stood at 89 days in FY2024 as compared to 73 days in FY2023 and 271 days in FY2022. The company stores 4-5 products (like laminates, refined flour, seasonings, gifts and spare parts) for 3-4 months and has created 75 Strategic Business Units (SKUs) across different states. The debtor days stood at 40 days in FY2024 compared to 45 days in FY2023 and 193 days in FY2022 mainly due to push-sales towards year end. The company has a network of more than 700 dealers (includes 200+ super-stockists and 500+ distributors). The other current assets of Rs. 39.96 Cr includes other loans and advances of Rs. 14.88 Cr, material loans of Rs.8.35 Cr, stock of gift items of Rs.4.48 Cr and others. The creditor days stood at 82 days in FY2024 compared to 58 days in FY2023 and 320 days in FY2022. Acuite believes that working capital requirements are expected to remain at similar levels due to the stocking and collection mechanisms policy of the Company over the medium term. Highly competitive and fragmented industry with high obsolescence risk The company operates in a highly competitive and fragmented FMCG industry as majority turnover of the company is being derived from snacks products and almost 56 per cent of the revenues are being generated from West Bengal. This segment is categorized by the presence of multiple players and brand consciousness of a large part of consumers. The segment is also susceptible to volatility in the economic scenario. However, the diversified product profile and established mitigates this risk to some extent. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The company has adequate liquidity marked by net cash accruals of Rs.18.18 Cr. in FY2024 as against Rs.1.93 Cr. long term debt obligations over the same period. The cash and bank balance stood at Rs. 0.83 Cr. in FY2024 compared to Rs. 7.05 Cr. in FY2023 and Rs.1.72 Cr. in FY2022. However, the current ratio stood low at 1.17 times in FY24 compared to 1.64 times in FY23 and 1.04 times in FY22. Moreover, the fund-based limit was utilized at a higher level i.e. 95.10 per cent for the six-months ended June 2024. Acuite believes that the company will maintain an adequate liquidity position due to net cash accruals.
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| Outlook: Stable |
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Acuité believes that the outlook on the company will remain 'Stable' over the medium term on account of the increasing scale of operations and healthy financial risk profile and. The outlook may be revised to ‘Positive’ in case the company registers healthy growth in revenues coupled with sustained improvement in operating margins and debt protection metrices and improvement in working capital. Conversely, the outlook may be revised to ‘Negative’ in case of a decline in the company’s revenues or profit margins, or in case of deterioration in the company’s financial risk profile.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 264.97 | 160.17 |
| PAT | Rs. Cr. | 14.22 | 7.14 |
| PAT Margin | (%) | 5.37 | 4.46 |
| Total Debt/Tangible Net Worth | Times | 0.50 | 0.40 |
| PBDIT/Interest | Times | 5.21 | 7.78 |
| Status of non-cooperation with previous CRA (if applicable) |
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None
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| 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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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 or more details. please refer Rating Criteria "Complexity Level Of Financial Instruments" on www.acuite.in.
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| Rating History : |
| Not Applicable |
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