Press Release April 10, 2025 ANNA TRADERS Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	13.50	ACUITE B+ | Stable | Assigned	-
Bank Loan Ratings	1.50	-	ACUITE A4 | Assigned
Total Outstanding	15.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned its long-term rating of 'ACUITE B+ (read as ACUITE B plus)' on the Rs. 13.50 Cr. and its short-term rating of ‘ACUITÉ A4’ (read as ACUITE A four) on the Rs. 1.50 Cr. bank facilities of Anna Traders (AT). The outlook is ‘Stable’.   Rationale for Rating The rating assigned reflects the management’s industry experience and the firm’s adequate liquidity position. However, the rating is constrained by the firm’s small scale of operations coupled with limited experience in the EPC sector, below average financial risk profile and working capital intensive operations in a highly competative and fragmented industry.

About the Company

Tamil Nadu- based, Anna Traders (AT) is a partnership firm established in 2015 by Mr. Jefferson Francis and Ms. Reenu Sebastian. The firm is engaged in trading of electrical goods. Anna Traders (AT) is transitioning as an EPC contractor, undertaking turnkey projects in partnership with other experienced contractors. Registered under MSME Udyam, the firm proposed to offers a range of electrical goods, fittings, HT and LT equipment as part of EPC project.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of Anna Traders (AT) to arrive at the rating.

Key Rating Drivers

Strengths

­Experienced Management Established in 2015, Anna Traders (AT) is managed by Mr. Jefferson Francis and Ms. Reenu Sebastian.  The firm is engaged in trading of electrical goods, including insulators, iron channels, iron rods and wires. The partners have been engaged in the industry for approximately two decades. Additionally, the firm is supported by a qualified management team. The partners extensive industry experience is evident in their strong and long-standing relationships with customers and suppliers. Acuite believes, the firm will benefit from the extensive experience of the partners in maintaining long standing relations with suppliers and customers.

Weaknesses

Small scale of operations albeit improving profitability margins AT operates on a small scale, as reflected in its operating income of Rs. 7.47 Cr. for FY2024, compared to Rs. 7.91 Cr. in FY2023 and Rs. 5.75 Cr. in FY2022. While operating margins remained low, they improved to 4.01 percent in FY2024 from 1.82 percent in FY2023, driven by contribution of ~ 23 per cent from the EPC segment. Similarly, Profit After Tax (PAT) margins increased to 2.59 percent in FY2024 as against 1.83 percent in FY2023. The firm reported a revenue of Rs. 4.41 Cr. in 11M FY2025 and aims to achieve revenue levels close to FY24 with 50- 60 per cent from EPC segment. Acuité believes that the firm's ability to register significant growth in its revenues while improving its profitability would be key a rating sensitivity. Limited operational track record in EPC industry The firm commenced undertaking EPC projects in FY24 which contributed ~ 23 per cent in revenues and is gradually transitioning as an EPC contractor. It has emerged as the L1 bidder for two projects with a combined value of approximately Rs. 20 Cr. However, compared to the established players in the industry, the partners have limited experience in EPC project execution. Working capital intensive operations The working capital operations of the firm are intensive in nature, marked by high GCA of 274 days in FY 2024, as compared to 204 days in FY 2023. Debtor days stood at 241 days as of March 31, 2024, compared to 149 days as of March 31, 2023. The inventory days were 30 days in FY 2024, compared to 49 days in FY 2023. Additionally, creditor days stood at 97 days in FY 2024, compared to 137 days in the previous year. Furthermore, reliance on working capital limits remained high, with utilization at approximately 87 percent over 6 months ending January 2025. Acuité believes that the working capital operations of the firm would  remain intensive on the back of the elongated debtor days and upcoming EPC projects. Below Average financial risk profile The financial risk profile of AT is below average, marked by low net worth, average gearing, and moderate debt protection metrics. The firm’s net worth stood at Rs. 1.41 Cr. as of March 31, 2024 compared to Rs. 0.44 Cr. as of March 31, 2023. The gearing of the firm is average at 2.04 times as of March 31, 2024, compared to 3.67 times as of March 31, 2023. Further, debt protection metrics are moderate, with the debt service coverage ratio (DSCR) at 2.62 times in FY 2024, compared to 9.80 times in the previous year. Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 3.43 times as of March 31,2024, compared to 9.86 times as of March 31, 2023. The Net Cash Accruals to Total Debt (NCA/TD) stood at 0.08 times in FY 2024, compared to 0.12 times in the previous year. Acuite believes, the financial risk profile of the firm would remain below average on account of low net worth base.

Rating Sensitivities

Consistent Improvement in scale of operations and profitability margins. Deterioration in working Capital cycle Changes in Financial Risk Profile

Liquidity Position

Adequate

The firm's liquidity position is adequate, marked by moderate net cash accruals of Rs. 0.24 Cr. in FY2024 against its debt obligations of around Rs. 0.04 Cr. Further, the firm is expected to generate adequate cash accruals in the range of Rs. 0.29 – 0.98 Cr., compared to maturing repayment obligations of around Rs. 0.04 Cr. over the medium term. The cash and bank balance as of FY24 stood at Rs. 0.02 Cr. compared to Rs. 0.09 Cr. in FY23. The working capital limit utilisation is high at 87 percent ending January 2025.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	7.47	7.91
PAT	Rs. Cr.	0.19	0.14
PAT Margin	(%)	2.59	1.83
Total Debt/Tangible Net Worth	Times	2.04	3.67
PBDIT/Interest	Times	3.80	9.80

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

­None

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

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.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 Not Applicable Not avl. / Not appl. Proposed Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.50 Simple ACUITE A4 | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 13.50 Simple ACUITE B+ | Stable | Assigned

Contacts

Mohit Jain Senior Vice President - Rating Operations Amay Gupta 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.