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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 37.50 | ACUITE BBB- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 35.00 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 72.50 | - | - |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) and the short-term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs.72.50 Crore bank facilities of Galaxy Mining Private Limited (GMPL). The outlook is ‘Stable’.
Rationale for reaffirmation
The rating reaffirmation continues to factor in the long standing experience of the promotors and established track record of operations of the group. The rating reaffirmation further takes into consideration the improvement recorded in the group’s operating performance marked by revenue growth of 39.07 % in FY2023 to Rs.724.55 Crore from Rs. 520.99 Crore in FY2022. However, the operating margins moderately declined in FY2023 and stood at 6.34 per cent as against 7.63 per cent in FY2022. The rating further considers the moderate financial risk profile and efficient working capital operations of the group as indicated by the low gearing levels and low GCA days respectively. However, the rating is constrained by the group’s tender based nature of operations. Going forward, the group’s ability to scale up its scale of operations while maintaining profitability margins will remain a key rating monitorable. |
| About Company |
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Rajasthan-based, Galaxy Mining Private Limited (GMPL) was incorporated in May-2019 as a private limited company which is engaged in the business of collection of royalty from mining sites and toll collection business. Mr. Ram Singh and Mr. Aditya Vardhan Singh Shekhawat are the directors of the company.
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| About the Group |
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Galaxy mining group was established in 2016 by Mr. Deependra Singh Rathore and Mrs. Sashi Singh Rathore. The group currently consist of 3 companies, namely Galaxy Mining & Royalties Private Limited (GMRPL), Galaxy Mining Private Limited (GMPL) and Goldcorp Global Mining Private Limited (GGMPL). The group is mainly engaged in the business of stone mining, trading and supplying of construction materials, toll collection and collection of royalties at precious stones and gypsum mining sites on behalf of the government.
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| Unsupported Rating |
| Not Applicable |
| 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 Galaxy Mining & Royalties Private Limited (GMRPL), Galaxy Mining Private Limited (GMPL) and Goldcorp Global Mining Private Limited (GGMPL) together known as Galaxy Mining Group, to arrive at this rating. The consolidation is on account of common management, similar line of business, and operational linkages.
From FY2024, with the transfer of shares and ownership of Goldcorp Global Mining Private Limited (GGMPL), team will be consolidated the business and financial risk profiles of Galaxy Mining & Royalties Private Limited (GMRPL) and Galaxy Mining Private Limited (GMPL), together known as Galaxy Mining Group. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established track record
Galaxy group is based out of Rajasthan, incorporated in 2016 by Mr. Deependra Singh Rathore and Mrs. Sashi Singh Rathore. The promoter Mr. Deependra Singh Rathore has an experience of over a decade in the industry. The promoters are assisted by the second line of management who are well experienced in the industry. On the back of the experienced management, the operating income of the group is improving YoY and stood at Rs.724.55 Crore in FY2023 as against Rs.520.99 Crore in FY2022 reporting CAGR of 77.70 percent for the last three years. The improvement in the operating income is due to growth in the order book position. The group has an outstanding order book position of Rs.712.96 Cr. as on 29 February 2024. Further, the group has achieved turnover of Rs.651.35 Crore in FY2024(prov). The absolute EBITDA of group is improving YoY , however the operating margin moderated and stood at 6.34 per cent in FY2023 as against 7.63 per cent in FY2022. The PAT margin of the group stood at 3.85 per cent in FY2023 as against 3.55 percent in FY2022. Acuite believes that the experienced management the group will aid in the growth of scale of operations over the medium term supported by moderate order book position Moderate Financial Risk Profile with above -average coverage indicators The financial risk profile of the group is moderate marked by moderate net worth, low gearing and above -average coverage indicators. The net worth of the group stood at Rs.78.50 Crore as on 31 March 2023 as against Rs.51.69 Crore as on 31 March 2022. Net worth also includes Rs.16.86 Cr. of quasi equity. The improvement in net worth is due to accretion of profits to reserves. The total debt of the group is Rs.89.22 Crore which includes long term debt of Rs.14.46 Crore, Unsecured loans of Rs.0.84 Crore, Short term debt of Rs.70.15 Crore and current maturities of long-term debt of Rs.3.76 Crore. The gearing of the group stood at 1.14 times as on 31 March 2023 as against 1.42 times as on 31 March 2022. The debt protection metrics of the group improved and stood above average with ICR and DSCR at 5.51 times and 3.18 times in FY2023 against 3.19 times and 2.63 times in FY2022 respectively. Further, with the transfer of shares of Goldcorp Global Mining Private Limited to another company, the net worth of the group is projected to be at Rs.97.07 Cr. in FY2024 (estimated). Acuite believes that the financial risk profile of the group will improve in the medium term, owing to absence of any debt funded capex and increase in scale of operations. Efficient Working capital operations The working capital operations of the group are efficient in nature with GCA days of 69 days as on 31 March 2023 as against 63 days as on 31 March 2022. The debtor days stood low at 23 days as on 31 March 2023 as against 24 days as on 31 March 2022. In addition to this, the inventory days of the group also stood low at 16 days as on 31 March 2023 as against 7days as on 31 March 2022. However, the creditor days of the group stood moderate at 40 days as on 31 March 2023 as against 33 days as on 31 March 2023. Further, the average bank limit utilisation of the group stood moderately high ranging between 78-85 percent for fund-based limits and around 90 percent for non-fund based facilities for the last 6 months ended March 2024. Acuite believes that the working capital operations of the group will continue to remain efficient in the medium term. |
| Weaknesses |
| Tender based nature of business
The group deals with government organizations and quotes for the contracts on a tender basis. The revenue of the group is highly dependent on the number and value of tenders floated by the Government. Since the nature of operations is tender based, the business depends on the ability to bid for contracts successfully. Acuite believes that the ability of the group to keep growing its scale of operations along with maintaining profitability levels would remain key rating sensitivity factor over the medium term. |
| Rating Sensitivities |
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| Liquidity Position: Adequate |
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The liquidity position of the group is adequate on account of sufficient net cash accruals generation against its current debt maturities. The net cash accruals stood at Rs.32.90 Crore in FY2023 as against the debt repayment obligation of Rs.3.82 Crore during the same period. The cash accrual of the group is estimated to be in the range of Rs.28-32 Crore in FY2024 -25 as against CPLTD of Rs.3.76 – 3.93 Crore during the same period. The current ratio of the group stood at 1.42 times in FY2023 as against 1.23 times in FY2022. The group has maintained an unencumbered cash and bank balance of Rs.11.58 Crore in FY2023. The average bank limit utilisation of the group stood moderately high ranging between 78-85 percent for fund-based limits and around 90 percent for non-fund-based facilities for the last 6 months ended March 2024. ACUITE believes that the liquidity position of the group will continue to remain adequate on account of expected healthy cash accrual generation over the medium term.
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| Outlook: Stable |
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Acuité believes that Group will maintain a 'Stable' outlook over the medium term on the back of its continuous increase in revenue and moderate financial risk profile. The outlook may be revised to 'Positive' in case the group registers higher-than-expected growth in its revenue and profitability, while improving its liquidity position. Conversely, the outlook may be revised to 'Negative' in case the group registers lower than expected growth in revenues and profitability or in case of deterioration in the group's financial risk profile or significant elongation in the working capital cycle.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 724.55 | 520.99 |
| PAT | Rs. Cr. | 27.88 | 18.51 |
| PAT Margin | (%) | 3.85 | 3.55 |
| Total Debt/Tangible Net Worth | Times | 1.14 | 1.42 |
| PBDIT/Interest | Times | 5.51 | 3.19 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Any Other Information |
| None |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Trading Entitie: https://www.acuite.in/view-rating-criteria-61.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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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) |
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1.Galaxy Mining & Royalties Private Limited (GMRPL) 2.Galaxy Mining Private Limited (GMPL) 3.Goldcorp Global Mining Private Limited (GGMPL) |
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Contacts |
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