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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 9.10 | ACUITE A- | Negative | Reaffirmed | - |
| Bank Loan Ratings | 15.00 | - | ACUITE A2+ | Assigned |
| Bank Loan Ratings | 119.00 | - | ACUITE A2+ | Reaffirmed |
| Total Outstanding | 143.10 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating to ‘ACUITE A-’ (read as ACUITE A minus) and short-term rating to 'ACUITE A2+' (read as ACUITE A two plus) on the Rs. 128.10 Cr. bank facilities of Global Surfaces Limited (erstwhile Global Stones Private Limited). The outlook is 'Negative'.
Acuité has assigned short-term rating to 'ACUITE A2+' (read as ACUITE A two plus) on the Rs. 15.00 Cr. bank facilities of Global Surfaces Limited (erstwhile Global Stones Private Limited). Rationale for rating The rating factors the improvement in revenue in H1FY2025 at Rs. 104.11 Cr. against H1FY2024 at Rs. 76.61 Cr. since operationalization of Dubai facility. However, there has been a decline in operating margin from 15.72% in H1FY2024 to 8.81% in H1FY2025 is due to increase in employee cost and administrative expenses. Despite operationalization of Dubai plant, the benefits of which is expected in next two quarter and will remain a key monitorable. However, the rating draws comfort from healthy financial risk profile and adequate liquidity position. Acuité believes that the company’s ability to grow its scale of operations and profitability while maintaining a healthy capital structure remains a key rating monitorable. The rating is constrained on account of intensive working capital requirement of operations. |
| About the Company |
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The company was incorporated as Swastik Niwas Private Limited on August 23, 1991 and its name was changed to Global Stones Limited in 2004. The company was renamed to Global Surfaces Private Limited on October 20, 2021 and subsequently converted to public limited company; Global Surfaces Limited on October 21, 2021. Global Surfaces Limited (GSL), erstwhile rated as Global Stones Private Limited was takeover in 2004 by Mr. Rajiv Shah. The company is a one Star export house engaged in producing and exporting of slabs made of granite, marbles and engineered quartz. The manufacturing units are located at Jaipur, Rajasthan. The company exports granite and marble slabs to USA, Canada, UK, UAE etc.
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| About the Group |
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Global Surfaces FZE is a company incorporated in the laws of United Arab of Emirates. The company was incorporated on 14 th December 2021. The company is engaged in the manufacturing of quartz slabs. Mr. Mayank Shah and Ms. Sweta Shah are the directors of the company.
Global Surfaces Inc. is a company incorporated in the laws of United States. The company was incorporated on 20th April 2020 and is engaged in trading of quartz slabs. Superior Surfaces Inc. was incorporated on May 5, 2023, in the State of Texas, USA. SSI is involved in the business of distributing artificial stones, including engineered quartz. Global Surfaces FZE, Global Surfaces Inc. and Superior Surfaces Inc. are subsidiaries of Global Surfaces Limited and together referred as Global Group. |
| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has consolidated the business and financial risk profile of Global Surfaces Limited, Global Surfaces FZE, Global Surfaces Inc. and Superior Surfaces Inc. The consolidation is in view of the common ownership and strong operational and financial linkages within the group.
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| Key Rating Drivers |
| Strengths |
| Experienced promoters with established track record of operations
The promoters of Global Surfaces Limited (GSL) have long experience in marble industry. GSL’s board of directors comprises of three directors namely Mr. Mayank Shah, Mrs. Sweta Singh, and Mr. Ashish Kachawa. Mr. Mayank Shah is the managing director and has around two decades of experience in the industry. The other two directors who are professionally running the company ably support him. Acuité believes that the group will continue to benefit from its experienced management and long track record of operation in the industry. Healthy Financial Risk Profile The financial risk profile of the group is marked by net-worth of Rs. 332.22 Crore in FY24 against Rs. 261.31 Crore in FY23. The total debt of the group stood at Rs. 144.63 Crore in FY24 against Rs. 166.20 Cr. in FY23. Further, the debt-equity ratio of the group stood at 0.44 times in FY24 against 0.64 times in FY23. Despite slight moderations, the interest coverage ratio of the group stood at 6.09 times in FY24 against 10.73 times in FY23 and DSCR of the group stood at 3.36 times in FY24 against 8.05 times in FY23 and TOL/TNW ratio stood at 0.51 times in FY24 against 0.69 times in FY23. Acuité believes that the financial risk profile of the group will remain healthy in near to medium term. |
| Weaknesses |
| Decline in business profitability
The group has reported revenue of Rs. 225.29 Crore in FY24 against Rs. 179.26 Crore in FY23. However, the EBITDA Margin of the group stood at 16.61% in FY24 against 21.10% in FY23 due to the increase in price of raw materials and the PAT Margins of the group stood at 8.78% in FY24 against 13.52% in FY23. The H1FY25 revenues and PAT margin were at Rs. 104.11 Cr. and -7.16% against H1FY24 revenues and PAT margins of Rs. 76.61 Cr. and 7.23% respectively. Margins declined due to the increase in the employee benefits expenses, depreciation and finance cost as their Dubai Plant got operationalised in Feb 2024, due to which costs has increased. Acuite believes going forward stablilization of Dubai plant reflected in improved operating performance and margins will remain a key monitorable. Working capital intensive nature of operations The working capital operations of the group is intensive marked by GCA days of 319 days in FY24 against 209 days in FY23. There is an increase in the GCA days due to the inventory days of the group which stood at 149 days in FY24 against 113 days in FY23, debtor days of the group stood at 178 days in FY24 against 90 days in FY23 and creditor days stood at 106 days in FY24 against 57 days in FY23. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The liquidity profile of the group adequate. The net cash accruals of group stood at Rs. 28.71 Crs. in FY 24 against the debt repayment of Rs. 4.08 Cr. The group has cash & bank position of Rs. 2.59 Cr and current ratio stood at 2.24 times for FY 24. The average fund based bank limit utilization is at ~70% for the 6 months’ period ending September 2024. It is expected that Rs. 150 Cr. additional capital against issue of share warrants would be received between March to June 2025.
Acuité believes that the liquidity position of the group will remain adequate on account of healthy net cash accruals against matured debt obligations over the medium term. |
| Outlook: Negative |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 225.29 | 179.26 |
| PAT | Rs. Cr. | 19.78 | 24.24 |
| PAT Margin | (%) | 8.78 | 13.52 |
| Total Debt/Tangible Net Worth | Times | 0.44 | 0.64 |
| PBDIT/Interest | Times | 6.09 | 10.73 |
| 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 • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||
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