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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 25.00 | - | ACUITE A4+ | Reaffirmed & Withdrawn |
| Bank Loan Ratings | 3.00 | ACUITE BB+ | Reaffirmed & Withdrawn | - |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 28.00 | - | - |
| Rating Rationale |
| Acuité has Reaffirmed and withdrawn the long-term rating at ‘ACUITE BB+’ (read as ACUITE double B plus) and the short term rating at ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs. 28.00 Crore bank facilities of Garg Lumbers Private Limited (GLPL). The rating withdrawal is in accordance with Acuite’s policy on withdrawal of ratings. The rating is being withdrawn on account of request received from the company and no objection certificate (NOC) received from the banker. |
| About Company |
| Gujarat based, Garg Lumbers Private Limited (GLPL) was incorporated in 2005 by Mr. Sameer Garg and Mrs. Reeta Garg. The company is a part of Delhi based Sumitra Rajkripal Group. GLPL is engaged in trading of timber logs and sawn timber. GLPL imports wood from Malaysia, Ghana, Costa Rica and Ecuador and sells it in domestic market mainly in five states i.e. Gujarat, Delhi, Haryana, Rajasthan and Uttar Pradesh. |
| About the Group |
| Rajkripal group was founded in 2004 by Mr. Garg and family. The group includes Garg Lumbers Private Limited (GLPL) and Rajkripal Timber Industries Private Limited (RTIPL). The group is mainly engaged in trading of timber and is also engaged in manufacturing of plywood. The group has presence across Gujarat, Delhi, Haryana, Rajasthan and Uttar Pradesh among others. |
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 GLPL and RTIPL together known as Rajkripal Timber Group, to arrive at this rating. The consolidation is on account of common management, similar line of business, and operational linkages. |
Key Rating Drivers
| Strengths |
| Experienced management Rajkripal Group is mainly managed by the Garg family. The group is engaged in the trading of timber logs for more than 15 years. Now the business is managed by Mr. Sanjay Garg with around two decades of experience in the business by virtue of his prior employment in other companies related in the same line of business. Moderate Financial Risk Profile Group’s financial risk profile is moderate marked by moderate net worth, comfortable gearing and average debt protection metrics. Group’s total tangible net worth as on 31st March 2021 stood at Rs. 16.54 Cr as against Rs. 14.28 Cr in the previous year. Debt to Equity ratio stood comfortable at 0.85 times in FY 2021 as against 1.00 times in FY 2020. Total debt of Rs. 14.05 Cr in FY 2021 consists of Rs. 1.88 Cr of long term debt and Rs. 12.17 Cr of unsecured loans. Interest Coverage Ratio and DSCR is moderate and stood at 2.32 times and 2.01 times respectively in FY 2021. NCA/TD has improved to 0.18 times in FY 2021 as against 0.10 times in FY 2020. |
| Weaknesses |
| Risk related with regulatory changes in domestic and foreign countries The imports of the group are exposed to risk related with different regulatory changes in domestic and foreign countries. The imports of the group are subject to import duty by the government of India. Any increase in the import duty may increase the cost the imports of group. The imports of the group are also exposed to risk related with the changes in regulatory policies of exporting countries (suppliers). The ban in exporting countries could affect the business and financial risk of the entire group. Competitive and fragmented nature of business The group is engaged in the trading of teak wood from countries such as Ghana, Ecuador, Costa Rica and several others. The group is selling teak wood to traders located all over India. The industry is marked by the presence of several medium to big size players. Hence, due to trading nature of business, the profitability margins of the company are at moderate levels. |
| Rating Sensitivities |
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| Material Covenants |
| None. |
| Liquidity Position |
| Adequate |
| Liquidity of the group is adequate with the group generating net cash accrual of Rs. 2.51 Cr in FY 2021. In FY 2021 cash and bank position stood at Rs. 3.40 Cr and current ratio at 1.31 times. |
| Outlook: Not Applicable |
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| Particulars | Unit | FY 21 (Actual) | FY 20 (Actual) |
| Operating Income | Rs. Cr. | 178.61 | 175.41 |
| PAT | Rs. Cr. | 2.26 | 1.19 |
| PAT Margin | (%) | 1.27 | 0.68 |
| Total Debt/Tangible Net Worth | Times | 0.85 | 1.00 |
| PBDIT/Interest | Times | 2.32 | 1.88 |
| Status of non-cooperation with previous CRA (if applicable) |
| CARE wide its press release dated February 27, 2018 mentioned rating of Garg Lumbers Private Limited as [CARE BB-/Stable/A4+ Issuer Not Cooperating]. CARE wide its press release dated 24th August 2022 mentioned rating of Garg Lumbers Private Limited as [CARE B+/Stable/A4 Issuer Not Cooperating]. |
| 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 • Trading Entitie: https://www.acuite.in/view-rating-criteria-61.htm |
| Note on Complexity Levels of the Rated Instrument |
| https://www.acuite.in/view-rating-criteria-55.htm |
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