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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 37.00 | ACUITE BBB | Upgraded & Withdrawn | - |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 37.00 | - | - |
| Rating Rationale |
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Acuite has upgraded and withdrawn its long term rating at "ACUITE BBB" (read as ACUITE Triple B) on the bank facilities of Rs.37 Crore bank facilities of Best Agrolife Limited. The rating has been withdrawn on Acuite's policy of withdrawal of ratings, along with the request from the company,and NOC received from the banker.
Rationale for rating Sustained performance, Established track record of operation and experienced management and healthy financial risk profile were the driving factors of the rating however the rating is underpinned by the moderately intensive working capital operation and competition from other players. |
| About Company |
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Best Agrolife Limited is a public limited listed company incorporated in 1992, promoted by Mr. Vimal Alawadhi, Mr. Braj Kishore Prasad among the others. The company is engaged in the trading of agrochemical products such as insecticides, pesticides, herbicides, fungicides and plant nutrients. Company’s crop protection chemical products are sold through distributers and comarketing alliances with leading Indian companies throughout the country. They have distribution network with more than 3600 distributers and direct dealers and over 1500 retail points across the country with 18 stock points. Company also sell the products though their own brand name ‘Best’.
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| About the Group |
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Best Agrolife Group is a Delhi based group, promoted by Mr. Vimal Alawadhi, Mr. Braj Kishore Prasad, among the others, which is engaged in the manufacturing and trading of agrochemical products such as insecticides, pesticides, herbicides, fungicides and plant nutrients. The group currently comprises of two entities i.e. Best Agrolife Limited and Best Crop Science Private limited.
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Analytical Approach
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has consolidated the business and financial risk profiles of Best Agrolife Limited and Best Crop Science LLP together known as Best Agro Group, to arrive at this rating. The consolidation is on account of common management, similar line of business, and operational linkages.
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Key Rating Drivers
| Strengths |
| Established track record of operation and experienced management
Mr. Vimal Kumar is the managing director and has vast experience in the agrochemical industry. He is ably supported by other directors who are professionally running the company. The group has a distribution network with more than 3600 distributers and direct dealers and over 1500 retail points across the country with 18 stock points which has enabled them to clock revenues of Rs.1451.36 crore in FY2022 as compared to Rs.992.79 crore in FY2021. Acuité believes that the group will continue to benefit from its experienced management and long track record of operation in agrochemical industry. Healthy financial risk profile Group’s Financial risk profile remain healthy marked by strong net worth, strong gearing and strong debt protection metrics. The net worth of the group stood at Rs.355.95 Crore as on March 2022 against Rs.148.30 Crore in FY21. The net worth levels have seen significant improvement over the last three years on an account of healthy accretion to reserve during the same period. The gearing level stood at 0.87 times in FY22 against 1.07 times in FY21. In addition to this, the interest coverage ratio stood high at 9.15 times in FY22 against 7.59 times in FY21.
Acuite expects that financial risk profile of the group to remain healthy over the medium term on an account of high net worth and strong debt protection metrics. |
| Weaknesses |
| Moderate working capital operations
The working capital operations of the company is intensive in FY22 marked by GCA (Gross current days) Days of 217 days in FY22 against 198 days in FY21.The GCA days are high on an account of high inventory days due to import from China. The current ratio of the company stood at 1.23 times in FY22. Acuite believes that the working capital requirement will continue to remain intensive over the medium term. Competitive and fragmented nature of operation The group is operating in competitive and fragmented nature of industry. There are several players engaged in the agrochemical industry in organized and unorganized sector. Hence, the group might face pricing pressure from other competitors. Therefore, having an established brand name is of utmost importance in this industry along with continuous addition of value added products in the product offerings. |
| Rating Sensitivities |
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| Material Covenants |
| None. |
| Liquidity Position |
| Strong |
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The group has strong liquidity marked by high net cash accruals to its maturing debt obligations. The group generated net cash accruals of Rs.125.89 Crore against CPLTD of Rs.1.45 Crore for the same period. Company maintains unencumbered cash and bank balance of Rs.12.79 Crore. Acuite believes that the liquidity of the company is likely to remain strong over the medium term on account of healthy cash accrual and no major repayments over the medium term.
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| Outlook: |
| Not Applicable. |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 22 (Actual) | FY 21 (Actual) |
| Operating Income | Rs. Cr. | 1451.36 | 992.79 |
| PAT | Rs. Cr. | 114.98 | 50.07 |
| PAT Margin | (%) | 7.92 | 5.04 |
| Total Debt/Tangible Net Worth | Times | 0.87 | 1.07 |
| PBDIT/Interest | Times | 9.15 | 7.59 |
| Status of non-cooperation with previous CRA (if applicable) |
| None |
| Any Other Information |
| None |
| Applicable Criteria |
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• Complexity Level Of Financial Instruments: https://www.acuite.in/view-rating-criteria-55.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.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 |
| https://www.acuite.in/view-rating-criteria-55.htm |
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