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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 11.10 | ACUITE A- | Negative | Reaffirmed | - |
| Bank Loan Ratings | 117.00 | - | ACUITE A2+ | Reaffirmed |
| Total Outstanding | 128.10 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating ‘ACUITE A-’ (read as ACUITE A minus) and short-term rating '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’.
Rationale for rating The rating continues to take into account the healthy financial risk profile and adequate liquidity position. There has been slight increase in revenue in Q1FY2025 at RS. 57.15 Cr. against Q1FY2024 at Rs. 36.37 Cr. since operationalization of Dubai facility. However a decline in net margin from 5.99% in Q1FY2024 to -2,20% in Q1FY2025 is due to increase in depreciation and finance charges. 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. Global Surfaces FZE and Global Surfaces Inc are subsidiaries of Global Surfaces Limited and together referred as Global Group. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has consolidated the financial and business risk profile Global Surfaces Limited, Global Surfaces FZE, Global 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 Crores in FY24 against Rs. 261.31 Crores in FY23. The total debt of the group stood at Rs. 144.63 Crores in FY24 which consists of long term debt of Rs. 98.76 Crores and short term debt of Rs. 45.88 Crores. Further, the debt-equity ratio of the group stood at 0.44 times in FY24 against 0.64 times in FY23. The interest coverage ratio of the group stood at 8.59 times in FY24 against 10.73 times in FY23. The TOL/TNW ratio stood at 0.51 times in FY24 against 0.69 times in FY23. Company has received ~Rs 50 crore by issuing share warrants in Dec 23 and ~Rs150 crore is expected to be received by FY25. Acuité believes that the group will remain healthy in near term due to steady accruals. |
| 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 Margins of the group stood at 15.52% in FY24 against 21.10% in FY23. The decline has been due to volatility in price realization and the PAT Margins of the group stood at 8.78% in FY24 against 13.52% in FY23. The Q1FY25 revenues and profitability were at RS. 57.15 Cr. and -2.20% against Q1FY24 reveneus and profitability of Rs. 36.37 Cr. and 5.99% respectively. Acuité believes that the group. 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 147 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 119 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 company is adequate. The net cash accruals of company stood at Rs. 28.71 Cr. in FY 24 against the CPLTD of Rs. 4.08 Cr. The company has cash & bank position of Rs. 2.59 Cr. and current ratio stood at 2.21 times for FY 24.
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| Outlook: Negative |
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Acuite believes that Global group will maintain a ‘negative’ outlook on account of deterioration in the operating performance of the company. The rating may be downgraded in case of any delay in stabilization of operations, stretch in working capital cycle or deterioration in financial risk profile driven by further deterioration in operating performance. The outlook may be revised to ‘Stable’ in case of substantial improvement in revenues and improvement in profitability from current levels.
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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. | 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 | 8.59 | 10.73 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any Other Information |
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None
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| 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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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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| Stand by line of credit is to be read as Stand by letter of Credit |
| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||
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