|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 22.32 | ACUITE B+ | Reaffirmed & Withdrawn | - |
| Bank Loan Ratings | 0.68 | Not Applicable | Withdrawn | - |
| Bank Loan Ratings | 0.50 | - | ACUITE A4 | Reaffirmed & Withdrawn |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 23.50 | - | - |
| Rating Rationale |
|
Acuité has reaffirmed & withdrawn its long term rating of ‘ACUITE B+' (read as ACUITE B plus)’ on the Rs 22.32 crore long term bank facilities of Datt MediProducts Limited (DMPL). Acuite has reaffirmed & withdrawn its short term rating of ACUITE A4 (read as ACUITE A four) on the Rs 0.50 crore short term bank facilities of Datt MediProducts Limited (DMPL). Acuite has withdrawn its proposed long term rating on the bank facilities of Rs 0.68 crore of Datt MediProducts Limited (DMPL). The rating is being withdrawn on account of the request received from the company and the NOC received from the banker as per Acuité’s policy on withdrawal of ratings. Rationale for the Reaffirmation The rating reaffirmation is on account of stable operating and financial performance of the company. The operating income improved to Rs 138.39 Cr in FY23 (Prov) as against Rs 96.77 Cr in FY22. The rating also draws comfort from long track record of operations , extensive experience of promoters in the healthcare business and long term relationships with its customers and suppliers. However, these strengths are partly offset by working capital intensive nature of operations of the company & regulated nature of industry. |
| About the Company |
| The New Delhi-based DML was established in 1995. Headed by Mr. Rajan Datt, DML undertakes manufacturing and export of medical supplies such as gauze, bandages, adhesives, dressings and paper tapes. |
| Analytical Approach |
| Acuité has considered the standalone financial and business risk profiles of DMPL to arrive at the rating. |
Key Rating Drivers
| Strengths |
| Experienced Management with established track record of operations and diversified product portfolio The New Delhi-based DML was established in 1995. Headed by Mr. Rajan Datt, DML undertakes manufacturing and export of medical supplies such as gauze, bandages, adhesives, dressings and paper tapes. Furthermore, the extensive experience of the promoters with a strong name has enabled the company to maintain and established long relationships with its customers and suppliers. The operating income of the company stood at Rs 138.39 Cr in FY23 (Prov) as against Rs 96.77 Cr in FY22. The reason for increase in the revenue for FY23 is due to high demand for the medical products in local markets. Acuité believes that the DMPL promoter’s experience, brand presence in the medical equipment industry and the government push towards improvement in healthcare sector in India will support its business risk profile over near to medium term. Moderate Financial Risk Profile The financial risk profile of the firm remained average marked by average net worth, gearing ratio & debt protection metrics. The net worth stood at Rs 43.85 Cr as on 31 March 2023 (Prov) as against Rs 37.99 Cr same period last year. The gearing level of the company remained at 0.46 times as on 31 March 2023 (Prov) as against 0.53 times same period last year. Also, the Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio stood at 1.18 times in as on 31 March 2023 (Prov) compared against 1.25 times as on 31 March 2022. The debt protection matrices of the company is improving marked by Interest Coverage Ratio (ICR) of 6.72 times for FY23 (Prov) and Debt service coverage ratio (DSCR) of 2.70 times for the same period. Acuité expects DMPL’s financial risk profile to improve over the medium term in absence of any major debt funded capex plan. |
| Weaknesses |
| Working capital intensive nature of operations The operations of the company remained working capital intensive in nature marked by GCA Days of 166 days for FY23 (Prov) as compared against 210 days for FY22. Furthermore, the receivables days stood at 28 days in FY23 (Prov) against 45 days in FY22. The inventory days of the company stood at 84 days for FY23 (Prov) as against 112 days for FY22. The creditor days stood at 62 days for FY23 (Prov) compared against 96 days for FY22. Regulatory and Competition Risk The healthcare sector functions under multiples layers of regulations of government and professional bodies. DMPL remains exposed to intense competition from various organized and unorganized players. |
| Rating Sensitivities |
|
| Material covenants |
| None |
| Liquidity Position |
| Adequate |
|
The liquidity position of the company remains adequate marked by moderate net cash accruals of Rs 8.05 Cr in FY23 (Prov) against Rs 1.83 Cr maturing debt obligations for the same period. The current ratio of the company remains above unity at 1.40 times as on 31 March 2023 (Prov). The company has unencumbered cash and bank balances of Rs 6.31 Cr as on 31 March 2023 (Prov). Acuite believes that the liquidity position would be adequate over the medium term on account of moderate cash accruals as against low repayment obligations. |
| Outlook: Not Applicable |
| |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Provisional) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 138.39 | 96.77 |
| PAT | Rs. Cr. | 5.85 | 0.65 |
| PAT Margin | (%) | 4.23 | 0.67 |
| Total Debt/Tangible Net Worth | Times | 0.46 | 0.53 |
| PBDIT/Interest | Times | 6.72 | 2.61 |
| Status of non-cooperation with previous CRA (if applicable) |
| None |
| Any other information |
| None |
| Applicable Criteria |
|
• 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 |
| 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. |
|
| |
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Contacts |
|
|
|
About Acuité Ratings & Research |
