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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 53.50 | ACUITE BBB- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 5.50 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 59.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuite has reaffirmed long term rating of ‘ACUITE BBB-’(read as ACUITE Triple B minus) and short-term rating of 'ACUITE A3’ (read as ACUITE A three) on the Rs. 59.00 Cr. bank facilities of Ganpati Agri Business Private Limited (GABPL). The Outlook is ‘Stable’.
Rationale for rating The rating reaffirmation considers the augmentation in scale of operations amidst subdued profitability. The rating also draws support from experienced management and comfortable working capital management. The rating strengths are partially offset by average financial risk profile, susceptibility of profitability to volatility in raw material prices and company’s presence in highly competitive and fragmented edible oil industry. |
| About the Company |
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Ganpati Agri Business Private Limited (GABPL) was incorporated in 2011 by Mr. Atul Kumar Singh and his wife Mrs. Anjali Singh, who are both directors, located at Barabanki (UP). The company manufactures rice bran oil and its by-products, de-oiled rice bran cake along with allied products such as mustard cake, de-oiled mustard cake, among others for poultry and cattle feed. GABPL has total manufacturing capacity of 96,250 MT per annum.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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Acuité has considered the standalone business and financial risk profile of Ganpati Agri Business Private Limited to arrive at this rating.
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| Key Rating Drivers |
| Strengths |
| Experienced Management
GABPL is led by directors Mr. Atul Kumar Singh and Mrs. Anjali Singh, who possess extensive expertise in the agribusiness sector. Their experienced management has been pivotal in establishing the company’s operations in rice bran oil and related products, driving innovation and quality since its inception in 2011. This strategic leadership has facilitated significant growth across multiple product segments. Augmentation in scale of operations amidst subdued profitability The company’s revenue increased and stood at Rs. 401.84 Cr. in FY2024 as against Rs. 262.50 Cr. in FY2023 reflecting a growth of 53.08 per cent in FY2024 due to higher volumes. Further, in 10MFY2025 the company has generated revenue of Rs. 412.21 Cr. The improvement in scale of operations was a result of addition of new customers and increased production. The operating profitability of the company remained subdued and stood at 3.19 percent in FY2024 as against 4.31 percent in FY2023 due to increase in selling and distribution expenses and lower realisations. In 10MFY2025 the operating profit margin stood at 3.57 percent. The PAT margins remained thin and stood at 0.96 percent in FY2024 as compared to 0.80 percent in FY2023. Going forward, the focus on higher value-added products such as refined mustard oil, refined rice bran oil, refined sunflower oil and refined palm oil are expected to improve operating profitability of the company. Acuite believes, the company’s ’s ability to continuously improve on its scale of operations and its profitability will remain as a key rating monitorable. Comfortable Working Capital Management The company’s operations are comfortable in terms of working capital intensity as evident by GCA days of 86 days in FY2024 as against 81 days in FY2023. The GCA days are driven by inventory and debtor days which stood at 67 days and 20 days respectively in FY2024 as against 42 days and 30 days respectively in FY2023. Bank limit utilization remained moderately high with 87.31 per cent average for the ten months ended January 2024. Acuite believes that working capital operations of the company continue to remain comfortable over the medium term. |
| Weaknesses |
| Average financial risk profile
The Company’s financial risk profile is average marked by moderate net worth, gearing and average debt protection metrics. Tangible Net Worth as on 31st March 2024 stood at Rs. 43.65 Cr. as against Rs. 32.56 Cr. as on 31st March 2023. The increase in net-worth is driven partly by conversion of unsecured loan from promoters’ directors into Quasi equity of Rs.6.06 Cr. and balance by accrual of profit to reserves. The company has converted quasi-equity of Rs. 6.06 Cr. into share capital in FY2025, thereby enhancing its capital structure. The total debt stood at Rs. 86.36 Cr. as on March 31, 2024, constitutes long term debt of Rs. 10.99 Cr, short term debt of Rs. 72.74 Cr, CPLTD of Rs. 2.07 Cr. and Rs. 0.56 Cr. of unsecured loans from shareholders. Gearing (Debt/Equity) of the company stood at 1.98 times as of FY2024 as against 1.79 times in FY2023. Interest coverage ratio stood at 2.92 times in FY2024 as against 2.70 times in FY2023. DSCR stood moderate at 1.54 times in FY2024 as against 1.11 times in FY2023. Acuite believes, financial risk profile would remain moderate in the near to medium term in the absence of any debt funded capex plan. Vulnerability of profitability to fluctuations in raw material prices and intense competition in the industry India remains dependent on edible oil imports from countries such as Indonesia, Malaysia, Ukraine and Russia. GABPL is entirely into rice bran oil, for which the raw material is procured locally, the availability of which at times seasonal in nature. The volatility in raw material prices is evident from the fact that the raw material to operating income ratio is around 85 per cent over the past three years. In addition, the Indian edible oil industry is intensely competitive due to a large unorganised market and a few large, organised players. |
| Rating Sensitivities |
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Continuous Improvement in scale of operations and profitability margins
Deterioration in working capital cycle Changes in financial risk profile |
| Liquidity Position |
| Adequate |
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The company’s liquidity position is adequate marked by adequate net cash accruals against its repayment debt obligations. The company generated net cash accruals in the range of Rs. 6-7 Cr. against the repayment obligation in the range of Rs. 2-3 Cr. in FY2023 and FY2024. Going forward the company is expected to generate adequate net cash accruals against its debt repayment obligations. Unencumbered cash and bank position stood at Rs. 0.65 Cr. as on March 31, 2024. The current ratio 1.23 times as on March 31, 2024.
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| Outlook: Stable |
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 401.84 | 262.50 |
| PAT | Rs. Cr. | 3.85 | 2.10 |
| PAT Margin | (%) | 0.96 | 0.80 |
| Total Debt/Tangible Net Worth | Times | 1.98 | 1.79 |
| PBDIT/Interest | Times | 2.92 | 2.70 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite) |
| Not applicable |
| Any other information |
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None
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| 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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