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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 185.78 | ACUITE BBB- | Reaffirmed & Withdrawn | - |
| Bank Loan Ratings | 73.51 | - | ACUITE A3 | Reaffirmed & Withdrawn |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 259.29 | - | - |
| Rating Rationale |
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Acuité has reaffirmed and withdrawn its long term rating of ACUITE BBB- (read as ACUITE triple B minus) and reaffirmed and withdrawn its short term rating of ACUITE A3 (read as ACUITE A three) on the Rs 259.29 crore bank facilities of Bedmutha Industries Limited. The rating is being withdrawn on account of the request received from the comapny and the NOC received from the banker as per Acuité’s policy on withdrawal of ratings. Rationale for rating Reaffirmation The rating assigned takes into consideration the established market position of the company in the wire ropes industry. The rating draws comfort from BIL’s improved operating performance in FY2023 , moderate working capital operations and adequate liquidity position. However, the strengths of the company are partially offset by the average financial risk profile and highly fragmented and competitive industry. |
| About Company |
| Bedmutha Industries Limited (BIL) is engaged in manufacturing of steel and copper wire products. The company manufactures the following steel and copper products-Galvanized wires, Bead Wire, spring Wire, Wire Rope and Copper products like wire rods, wires, foils and bus-bar. It has its plant located in Nardana, Maharashtra with a capacity to manufacture 86,400 MT of steel wires P.A., and 16,200 MT of Copper wires P.A. The Nardana plant is certified for- ISO 9001- Quality management systems, ISO 45001: Occupational Health and safety, ISO 14001: Environmental management systems. |
| About the Group |
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Ashoka Pre-con Pvt Ltd Ashoka Pre-con Pvt Ltd (APL) is engaged in manufacturing of pre-cast products which are majorly used in power generation and road barriers. APL is an associate company where BIL has 49% shareholding. The company is promoted by Mr. Vijay Vedmutha, Mr. Ajay Vedmutha, and other family members. |
Analytical Approach
| Extent of Consolidation |
| • Proportionate or Moderate Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has considered the consolidated business and financial risk profiles of Bedmutha Industries Limited (BIL) and associate entity Ashoka Pre-con Pvt Ltd (APL) on account of common management and operational linkages to arrive at this rating. |
Key Rating Drivers
| Strengths |
| Established track record of operations with experienced management BIL is based out of Maharashtra and was incorporated in the year 1990. The company is promoted by Mr. Vijay Vedmutha, Mr. Ajay Vedmutha and other family members. The operations of the company are managed by the promoters as well as a team of experienced senior management personnel who are further ably supported by a strong line of mid-level managers. The extensive experience of the promoters has helped the company to establish long and healthy relationships with reputed customers and suppliers over the years. The key customers of the company include names such as Sterlite power transmission Ltd, Eximius Infra Tech Solutions LLP, Badve Engineering Limited and Bharat Heavy Electrical Limited. Operating Income for FY23 stood at Rs 743.34 crore as against Rs 711.94 Cr in FY22. The reason for increase in the turnover & PAT is due to better performance of copper division which led to increase in capacity utilization. Further, EBITDA Margin for the FY23 stood at 9.93% as against FY22 at 9.57%. The Profit after tax margins (PAT) stood at 1.75% in FY23 as against 1.32% in FY22. Acuité believes that the promoter's experience and reputed clientele is expected to support in improvement of its business risk profile over the medium term. Moderate Working Capital Management Working capital operations of the company remain moderate with gross current asset (GCA) days of 145 days for FY23 as compared against 137 days for FY22. Furthermore, the receivables days stood at 37 days in FY23 against 34 days in FY22. The inventory days of the firm stood at 40 days for FY23 compared against 37 days for FY22. The creditor days stood at 72 days for FY23 compared against 61 days for FY22. |
| Weaknesses |
| Average financial risk profile The financial risk profile of the firm remained average marked by average net worth, debt protection metrics & high gearing ratio. The net worth stood at Rs 99.52 Cr as on 31 March 2023 as against Rs 86.51 Cr same period last year. The gearing level of the company is improving to 2.53 times as on 31 March 2023 as against 3.19 times same period last year. Also, the Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio stood at 4.02 times in as on 31 March 2023 compared against 4.67 times as on 31 March 2022. The debt protection matrices of the company marked by Interest Coverage Ratio (ICR) of 2.32 times for FY23 and Debt service coverage ratio (DSCR) of 1.09 times for the same period. Acuité believes that the financial risk profile of the company will remain below average over the medium term. Susceptible to fluctuations in raw material prices along with highly fragmented and competitive industry BIL’s operations are exposed to inherent risks associated with availability of raw materials, fluctuations in prices, and changes in government regulations. The company is engaged in the business of manufacturing of all types of steel and copper wire ropes, which find its application in automobile, infrastructure, farming, power transmission and material handling. The prices of these raw materials are volatile in nature; hence, the profitability is susceptible to the ability of the company to pass on the same to its customers. The industry is marked by presence of large number of organized and unorganized players in the industry. The high competitive industry further limits the pricing flexibility and exerts pressures on the margins of all participants |
| Rating Sensitivities |
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Sustainability in revenue growth and margins Elongation of working capital cycle |
| Material Covenants |
| None |
| Liquidity Position |
| Adequate |
| The liquidity position of the firm remains adequate marked by moderate net cash accruals of Rs 44.91crore for FY23 against maturing debt obligations of Rs 38.59 crore for the same period. The current ratio of the company is at 1.37 times as on 31 March 2023. The firm has unencumbered cash and bank balances of Rs 3.15 Cr as on 31 March 2023. |
| Outlook: |
| Not Applicable |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 743.34 | 711.94 |
| PAT | Rs. Cr. | 13.01 | 9.38 |
| PAT Margin | (%) | 1.75 | 1.32 |
| Total Debt/Tangible Net Worth | Times | 2.53 | 3.19 |
| PBDIT/Interest | Times | 2.32 | 2.31 |
| Status of non-cooperation with previous CRA (if applicable) |
| None |
| Any Other Information |
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BIL's subsidiary entity Kamalasha Infrasructure and Engineering Pvt Ltd (KIEPL) was also considered as a part of consolidation during the previous reviews. However, BIL has divested its stake in KIEPL and the operational and financial linkages cease to exist between the entities, hence, KIEPL does not form part of the consolidation for this review.
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| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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. |
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