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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 80.80 | ACUITE BB | Stable | Reaffirmed | - |
| Total Outstanding | 80.80 | - | - |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE BB’ (read as ACUITE double B) on the Rs. 80.80 Cr. bank facilities of F Robin Polymers Private Limited (FRPL). The outlook is 'Stable'.
Rationale for reaffirmation : The rating reaffirmation take into account the improved operating revenue. The company has reported revenue of Rs.103.16 Cr. in FY2024 (Prov) registering a growth rate of ~55.66 Percent against the previous year, supported by capacity expansion and stabilized operations. The operating margins ranged between 20.81-15.29 percent for the last two years ended FY2024(Prov). The rating takes into account its extensive experience of the promoters. The rating, however, remain constrained on account of below-average financial risk profile and working capital intensive. |
| About the Company |
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F Robin Polymers Private Limited (FRPL) was incorporated in 2016, promoted by Mrs. F. Stella and Mr. F Robin. The company is engaged in manufacturing of PP Woven sacks and jambo bags by using flexible integrated bulk container. It has a manufacturing facility at Chinnupatti, Batlagundu, Dindigul, Tamilnadu with a production capacity of 10.04 MT per day. The produced products are used majorly by players engaged in manufacturing cement, fertilizers, sugar, textile, food grain & agro products among others. The Company commenced its operations in June 2018. In January 2021, the Company instated 7 megawatt (MW) solar power project for captive consumption.
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| Unsupported Rating |
| Not applicable |
| Analytical Approach |
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Acuité has taken a standalone view of the business and financial risk profile of FRPL to arrive at the rating.
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| Key Rating Drivers |
| Strengths |
FRPL was incorporated in 2016 and promoted by Mrs. F. Stella and her son, Mr. F. Robin. The day-to-day operations are managed by the managing director, Mrs. F. Stella, and her husband, Mr. Francis. The company manufactures polypropylene woven sacks, which find utility as industrial packaging materials ideally suited for cement, sugar, and food grains, among others. Promoters and experienced management have helped the company stabilize and scale up its operations and develop relationships with its customers and suppliers. Acuité believes the promoter's strong understanding of market dynamics and experienced management will benefit the company going forward, resulting in steady growth in the scale of operations.
The operating income of the company has shown YOY growth of 55.66 percent in FY2024 (Prov) as against the previous year; it stood at Rs. 103.16 Cr. in FY2024 (Prov) as against Rs. 66.27 Cr. in FY2023. The reason behind the improvement in revenue in FY2024 is supported by capacity expansion and stabilized operations, i.e., the introduction of the new product, Jambo bags, by using flexible integrated bulk containers. The utilization of FIBC is almost 73 percent in FY2024, and the machine is operational 24/7. The operating margins ranged between 20.81-15.29 percent for the last two years ended FY2024(Prov). Acuité believes that the company's ability to improve its revenues and maintain its operational profitability will be a key factor going forward.
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| Weaknesses |
The financial risk profile of the company has remained below average with weak capital structure and high gearing and moderate debt protection metrics. The net worth of the company stood at Rs.14.57 Cr. and Rs.11.27 Cr. as on March 31, 2024(Prov) and 2023 respectively. The gearing of the company stood at 5.29 times as on March 31, 2024(Prov), against 4.71 times as on March 31, 2023. Gearing has been deteriorated in 2024 (Prov) on account of infusion of term loans and USL from promoters. Debt protection metrics – Interest coverage ratio and debt service coverage ratio stood at 3.32 times and 1.74 times as on March 31, 2024(Prov) respectively as against 3.52 times and 1.91 times as on March 31, 2023, respectively. The debt to EBITDA of the company stood at 4.88 times as on March 31, 2024(Prov) as against 3.85 times as on March 31, 2023. Acuité believes the financial risk profile of the FRPL will remain below-average over the medium term and ability of the company to scale up its operations with surplus accruals in order to service its medium-term debt obligations in timely manner will be critical.
company’s working capital cycle is intensive reflected by its GCA days at 124 days in FY2024(Prov) as against 108 days in FY2023. However, the increase in GCA days is on account of high other current assets of Rs. 10.58 Cr. in FY2024(Prov). Inventory days stood at 67 days in FY2024(Prov) as against 77 days in FY2023. The debtor days stood at 29 days in FY2024(Prov) as against 36 days in FY2023. Subsequently, the payable period stood at 1 day in FY2024(Prov) as against 1 day in FY2023. Further, the average bank limit utilization in the last ten months ended June, 24 remained high at ~98 percent for fund based limits.
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| Rating Sensitivities |
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| Liquidity Position: Adequate |
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FRPL’s liquidity is adequate, with adequate NCAs for its repayment obligations. FPPL generated cash accruals of Rs.9.87 Cr. in FY2024(Prov) against its maturing debt obligations Rs.3.67 Cr. for the same period. The cash accruals of the company are estimated to remain around Rs.11-12.79 Cr. during FY2025-26, while their repayment obligations are estimated to be around Rs.4.56- 4.89 Cr. during the same period. However, the average fund-based working capital utilization stood at 98 percent for the past ten months ended June 2024, therefore indicating high dependency on fund-based limits. The company has maintained unencumbered cash and bank balances Rs.0.10 Cr. and the current ratio stood low at 1.00 times as on March 31, 2024(Prov). Acuité expects that the liquidity of the company is likely to be adequate over the medium term on account of moderate cash accruals to its maturing debt obligations.
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| Outlook: Stable |
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Acuité believes that FRPL will maintain a 'Stable' outlook over the medium term from its promoter's entrepreneurial experience. The outlook may be revised to ‘Positive’ in case the company registers healthy growth in revenues while achieving sustained improvement in operating margins, capital structure and working capital management. Conversely, the outlook may be revised to ‘Negative’ in case of decline in the company’s revenues or profit margins, or any significant debt-funded capex leading to deterioration of its financial risk profile and liquidity.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Provisional) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 103.16 | 66.27 |
| PAT | Rs. Cr. | 3.49 | 1.77 |
| PAT Margin | (%) | 3.39 | 2.68 |
| Total Debt/Tangible Net Worth | Times | 5.29 | 4.71 |
| PBDIT/Interest | Times | 3.32 | 3.52 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• 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 |
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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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