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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 6.94 | ACUITE BB | Stable | Assigned | - |
| Bank Loan Ratings | 4.50 | ACUITE BB | Stable | Reaffirmed | - |
| Bank Loan Ratings | 11.56 | - | ACUITE A4+ | Assigned |
| Bank Loan Ratings | 7.00 | - | ACUITE A4+ | Reaffirmed |
| Total Outstanding | 30.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BB’ (read as ACUITE double B) and the short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.11.50 crore bank facilities of Ionisation Filtration Industries Private Limited (IFIPL). The outlook remains ‘Stable'. Further, Acuité has assigned the long-term rating of ‘ACUITE BB’ (read as ACUITE double B) and the short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.18.50 crore bank facilities of Ionisation Filtration Industries Private Limited (IFIPL). The outlook is ‘Stable'. Rational for rating Reaffirmation The rating reaffirmation considers the company’s stable operating and financial performance. The rating continues to derive comfort from the established experience of the management and its established relationship with its clients. The company’s operating income grew to Rs. 70.16 Cr. in FY2024 (Prov.) as against Rs. 37.61 Cr. in FY2023. The PAT margins stood at 4.65 percent in FY2024 (Prov.) as against 3.12 percent in FY2023. Going ahead, the company’s ability to increase its revenue and profitability margins while maintaining its efficient working capital cycle will be a key rating monitorable. |
| About the Company |
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IFIPL incorporated in 2001, is a Pune based company engaged in manufacturing and trading of air pollution control equipments and provides allied services, i.e. application engineering, design, supervision of erection & commissioning and maintenance contracts for various equipments. The applications offered by IFIPL covers various industries such as Power, Cement, Steel, Pulp and Paper, Fertilizer, Sugar and Glass.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
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Acuité has considered the standalone business and financial risk profile of IFIPL to arrive at the rating
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| Key Rating Drivers |
| Strengths |
| Experienced management with an established track record of operations and reputed clientele
IFIPL has an operational track record of over two decades. It is promoted by Mr. Vivek Joshi who possess an extensive experience of over three decades in the air pollution control equipment industry. He is supported by his wife Mrs. Swati Joshi (Executive Director) who possess nearly two decades of experience in the same industry. The promoter and director are being supported by its team of experienced professionals in managing day to day operations of IFIPL. The extensive experience of the management has enabled IFIPL to establish a healthy relationship with its reputed clienteles like ACC Cement, Ambuja Cement, Ultratech Cement, Jaypee Group, Larsen & Toubro, JSW Steel, Thyssenkrupp, Beumer Group amongst others. Acuité believes that IFIPL will continue to benefit from its experienced management with an established track record of operations and its reputed clientele. Improving operating performance The revenue of the company stood increased at Rs.70.06 crore in FY24 (Prov.) compared to revenue of Rs.37.61 crore in FY23. The revenue of the company increased in FY24 (Prov.) on account of increased demand primarily from cement industry clientele. The company has established relationships with its reputed clients like UltraTech cement, Dalmia cement and Adani cement to name a few. The operating profit margin of the company marginally decreased and stood at 7.24 percent in FY24 (Prov.) compared against 8.75 percent in FY23. The PAT margin of the company stood higher at 4.65 percent in FY24 (Prov.) compared to 3.12 percent in FY23. Acuite believes that going ahead the company’s ability to improve revenue and profitability margins would be a key rating monitorable. Moderately efficent Working capital operations IFIPL has improved its working capital management with average gross current asset (GCA) days standing over 104 days during FY22 to FY24. GCA days decreased and stood at 53 days in FY2024 (Prov.) against 130 days in FY2023 due to decrease in inventory days. Inventory days stood at 24 days in FY2024 (Prov.) against 53 days in FY2023.. The inventory for FY23 increased due to customers not collecting their orders on time due to weather associated constraints. The debtor days stood lower at 28 days for FY24 (Prov.) against 67 days for FY23. The average credit period allowed to the customers is around 30-45 days. The creditor days of the company stood at 73 days for FY24 (Prov.) as against 80 days for FY23. The average credit period allowed by the suppliers is around 60-90 days. The average bank limit utilisation for 07 months period ended May 2024 however stood at ~96.10 per cent for fund-based limits and ~73.28 per cent for non-fund based limits. Acuité believes that the ability of IFIPL to maintain its efficient working capital cycle over the medium term will remain a key rating sensitivity factor. |
| Weaknesses |
| Below average financial risk profile
IFIPL has below average financial risk profile marked by low net worth, average gearing and average debt protection metrics. IFIPL’s net worth stood marginally improved to Rs. 8.33 crore as of March 31, 2024(Prov) against Rs. 5.17 crore as of March 31, 2023, on account of accretion of profits to reserves. The company’s gearing stood at 2.44 times as on March 31,2024 (Prov.) as against 3.20 times as on March 31, 2023 on account of subsequent increase in the long term and short term debt availed from multiple banks. The company’s total debt as on March 31,2024 (Prov.) stood at Rs. 20.37 crore as compared to Rs. 16.53 crore as on March 31, 2023; comprising of long-term debt of Rs. 7.17 crore, short-term debt of Rs. 9.36 crore and Unsecured loans from promoters/directors of Rs. 3.85 crore. TOL/TNW stood at 3.85 times as on March 31, 2024 (Prov.). The interest coverage ratio of the company stood at 3.26 times in FY24 (Prov.) against 3.12 times in FY23. DSCR stood marginally lower at 1.94 times in FY2024 (Prov.) against 2.13 times in FY2023. Acuité believes that ability of IFIPL to improve its financial risk profile over the medium term will remain a key rating sensitivity factor. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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IFIPL’s liquidity position is adequate backed by sufficient net cash accruals against repayment obligations. The company generate net cash accrual of Rs. 3.95 Cr. in FY2024 (Prov.) against maturing debt repayment obligation of Rs. 1.16 Cr. for the same period. Going forward the NCA are expected in the range of Rs.5 Cr. to Rs.8 Cr. for period FY2025-FY2026 against its repayment obligation of around Rs.2 Cr. to Rs. 3 Cr. during the same period. The cash and bank balances of the company stood at Rs. 0.08 Cr. as on March 31, 2024 (Prov.). The current ratio stood at 1.24 times as on March 31, 2024 (Prov.). The working capital operations of the company are efficiently marked by its gross current asset (GCA) days of 53 days for FY2024 (Prov.) as against 130 days for FY2023.
Acuité believes that going forward the liquidity of IFIPL is likely to remain adequate over the medium term on account of sufficient cash accruals against its maturing debt obligations. |
| Outlook: Stable |
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Acuité believes that IFIPL will maintain 'Stable' outlook over the medium term on account of its experienced management with an established track record of operations and reputed clientele. The outlook may be revised to 'Positive' in case of significant and sustained growth in revenue and profitability while effectively managing its working capital cycle and keeping the debt levels moderate. Conversely, the outlook may be revised to 'Negative' in case of lower than expected growth in revenue or deterioration in the financial and liquidity profile most likely as a result of higher than envisaged working capital requirements
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Provisional) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 70.16 | 37.61 |
| PAT | Rs. Cr. | 3.26 | 1.17 |
| PAT Margin | (%) | 4.65 | 3.12 |
| Total Debt/Tangible Net Worth | Times | 2.44 | 3.20 |
| PBDIT/Interest | Times | 3.26 | 3.12 |
| 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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• 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 • Trading Entities: 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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