B N Jewellers, was established as a proprietorship firm in 1989 by Mr. Babulal Rawal. It was reconstituted as a partnership firm in the year 2004. Further, the partnership firm was converted into a private limited company on May 21, 2021. The company has an operational track record of over 3 decades in the industry. Mr. Babulal Rawal possesses extensive industry experience of around four decades. He is well supported by his sons Mr. Nirmal Rawal and Mr. Kalpesh Rawal who have been involved in the business for over two decades. The company deals with reputed jewellery retailers like Tanishq, Joyalukkas, Kalyan Jewellers, Titan, PNG, Malabar Gold, Senco Gold, Tribhovandas Bhimji Zaveri, Tara Jewels and others. The extensive experience coupled with long track record of operations has enabled the company to forge long term relations with customers and suppliers.

The Company during the period H1FY2023 improvised its manufacturing process. It imported and installed a specialised machinery which has aided it to increase its production output. The revenue of the Company stood at Rs. 302 Cr in H1FY2023 i.e. ~86% of its total income in FY2022. The Company is expected to generate a revenue of ~Rs.600 Cr by year end. The growth is driven by both increase in production capacities and overall increase in demand witnessed by the industry. The operating income stood at Rs. 351.61 Cr in FY2022 as against Rs. 302.76 Cr in FY2021.

Acuité believes that the experience of the management in the industry is likely to favorably impact the business risk profile of the company over the near to medium term. 

 

 
BNJIPL has a moderate financial risk profile marked by moderate networth , moderate gearing and comfortable debt protection metrics. The tangible networth stood at Rs. 50.59 Cr as on March 31, 2022 as against Rs. 56.59 Cr as on March 31, 2021. The networth decreased primarily because of change in constitution to a private limited entity from partnership firm during the year. An amount of Rs. 14.59 Cr was reclassified  as as Unsecured Loans from Partner’s capital during the conversion. The promoters have undertaken to maintain Rs.35 Cr in the business and are under process to subordinate it to bank debt. Thus, considering the same as quasi equity, the company’s overall gearing stood at 1.08 times as on March 31, 2022 as against 0.60 times as on March 31, 2021. The total debt stood at  Rs.54.80 Cr as on March 31, 2022 which included Rs. 31.73 Cr of short term bank borrowings, Rs. 8.48 Cr of long term borrowings and Rs. 14.59 Cr of unsecured loan from directors and promoters. . The Total Outside Liabilities to Tangible Net worth ratio stood at 1.47 times as on March 31, 2022 as against 0.85 times as on March 31, 2021 . The debt protection metrics of the Company is comfortable marked by interest coverage of 3.43 times for FY22 as against 4.85 times for FY21. The NCA to Total Debt stood at 0.18 times for FY22 as against 0.22 times for FY21. The Debt to EBITDA stood at 3.07 times for FY2022 as against 2.52 times in FY21. 

Acuité believes BNJIPL’s financial risk profile will remain moderate over the medium term in absence of any major debt-funded capex plan.

 

BNJIPL’s operations continue to remain working capital intensive in nature marked by gross current asset (GCA) days of 111 days as on March 31, 2022 as against 108 days as on March 31, 2021. The GCA days are driven by high inventory and debtor days. The inventory days stood at 69 days as on March 31, 2022 as against 58 days as on March 31, 2021. The debtor days stood at 39 days as on March 31, 2022 as against 47 days as on March 31, 2021. However, the company’s reliance on bank lines to fund its working capital requirement continues to remain high, marked by average bank limit utilization of its fund based facility of 90-92 percent during the six months ended October, 2022 . The creditor days stood at 18 days as against 12 days as on March 31, 2021.