Press Release December 13, 2023 JYOTI AUTOMOBILES PRIVATE LIMITED Rating Assigned,Reaffirmed and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	1.88	ACUITE BB+ | Stable | Assigned	-
Bank Loan Ratings	14.82	ACUITE BB+ | Stable | Upgraded	-
Bank Loan Ratings	39.62	-	ACUITE A4+ | Assigned
Bank Loan Ratings	45.18	-	ACUITE A4+ | Reaffirmed
Total Outstanding	101.50	-	-

Rating Rationale

­Acuité has upgraded the long term rating from ‘ACUITE BB’ (read as ACUITE double B)  to ‘Acuite BB+ ( read as ACUITE double B Plus) and reaffirmed short-term rating of ‘ACUITE A4+ (read as ACUITE A Four plus) to the Rs. 60 Crore bank facilities of Jyoti Automobiles Private Limited (JAPL). The outlook is ‘Stable’ Further Acuité has assigned the long term rating of ‘ACUITE BB+’ (read as ACUITE double B Plus) and short-term rating of ‘ACUITE A4+ (read as ACUITE A Four plus) to the Rs. 41.50 Crore bank facilities of Jyoti Automobiles Private Limited (JAPL). The outlook is ‘Stable’ Rationale for rating  The rating action takes into account improved Business, Financial risk profile and adequate liquidity Position. Company reported growth in revenue from operations by ~28% in FY2023 to Rs. 277.22 crore as against Rs. 216.42 crore for FY2022 (46 percent from FY 21 to FY 23). The operating profit margin of the company improved by 11 bps in FY 23. Company reported PAT of Rs 3.16 crore in FY 23 as against Rs 2.11 crore in FY 22. Financial risk profile of the company improved with improvement in gearing, moderate net worth & improved coverage indicators. The Total Tangible net worth stood at Rs. 26.29 Cr as on 31st March 2023 as against Rs.  23.31 Cr a year earlier. Interest coverage ratio stood at 2.47 times for FY2023 and Debt Service coverage ratio stood at 1.32 times for FY2023. However these strengths are underpinned by low Current Ratio. 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 indicator.

About the Company

­­­Incorporated in 1998, Jyoti Automobiles Private Limited (JAPL) is a Rajasthan-based company promoted by Mr. Sanjay Nakra and Mr. Rajeev Nakra. The company has been an authorised dealer for Maruti Suzuki India Limited since 2009 and is engaged in the sale of new vehicles, pre-owned vehicles (under the "True Value" brand), Honda 2 wheelers and spare parts and accessories.

Unsupported Rating

­Not Applicable

Analytical Approach

­­Acuite has taken the standalone view of the business and financial risk profile of Jyoti Automobiles Private Limited to arrive at the rating.

Key Rating Drivers

Strengths

­Experienced management JAPL was incorporated in the year 1998 and operates dealership of 4 wheelers (New Cars) for Maruti Suzuki India Limited, 4 Wheelers (Used Car) under TruValue and 2 Wheeler (New Vehicles) for Honda Motors in Rajasthan region. Management has extensive experience in the line of business evident by long standing association with Maruti Suzuki India Limited (MSIL) and Honda Motors. Acuité believes that JAPL will continue to benefit from its established track record of operations and experienced management. Working capital operations- Efficient Company has efficient working capital requirements as evident from comfortable gross current assets (GCA) of 62 days in FY2023 as compared to 58 days in FY2022. Inventory days stood at 35 days in FY 23 (29 days in FY22). Debtor days stood at 6 days in FY2023 as against 21 days in FY 22. Working capital limits are utilized at ~ 72 percent during the last twelve months ended Oct 23 Business risk profile-Improved JAPL’s Operating income improved which is apparent from growth in revenue from operations by ~28% in FY2023 to Rs 277.22 crore as against Rs. 216.42 crore for FY2022 (~46 percent from FY 21 to FY 23). The operating profit margin of the company remains stable with minor improvement of 11 bps in FY 23. Operating Profit Margin of company stood at 3.41% in FY2023 as against 3.30% in FY2022. Net profit margin of the company increased by 17 bps and stood at 1.14 percent in FY2023 as against 0.97 percent in FY 22. ROCE of the company stood at 12.49 percent in FY2023.

Weaknesses

­Exposure to risks related to low bargaining power with principal and to intense competition in passenger vehicle segment JAPL is a Rajasthan-based dealer for MSIL’s passenger vehicles. It faces intense competition from other MSIL dealers and has limited bargaining power with its principal. Furthermore, JAPL also faces competition from dealers of other OEM’s like Tata motors, Toyota, Mahindra, VW, Skoda, Nissan etc. Financial Risk Profile- Moderate Company has moderate financial risk profile marked by moderate net worth, coverage indicators and gearing. The Total Tangible net worth stood at Rs. 26.29 Cr as on 31st March 2023 as against Rs. 23.31 Cr a year earlier. Increase in net worth is on account of Profit accretion.Interest coverage ratio increased by 14 bps and stood at 2.47 times for FY2023 as against 2.33 times in FY2022. Likewise, Debt Service coverage ratio increased by 15 bps and stood moderate at 1.32 times for FY2023 as against 1.17 times in FY2022. Total outside liabilities to total net worth (TOL/TNW) stood at 2.03 times as on FY2023 vis-à-vis 1.85 times as on FY2022. Debt-EBITA improved and stood at 4.15 times as on 31st March 2023 as against 5.40 times as on 31st March 2022. The Net Cash Accruals to Total debt stood at 0.12 times as on FY2023 and 0.09 times for FY2022.

Rating Sensitivities

­Improvement in ­Scale of operations. Improvement in Debt Protection metrics. Improvement in Financial Risk Profile.

All Covenants

­Not Applicable

Liquidity Position

Adequate

­­Company has adequate liquidity marked by net cash accruals to its maturing debt obligations, low current ratio, cash and bank balance. Company generated cash accruals of Rs.  4.84 crore for FY2023 as against obligations of Rs. 2.70 crore for the same period. Current Ratio stood at 0.98 times as on 31 March 2023 as against 1.06 times in the previous year. Working capital limits are utilized at ~ 72per cent during the last twelve months ended Oct 23 leaving additional cushion in working capital limits to meet contingencies. Cash and Bank Balances of company stood at Rs 0.64 crore.­Company has adequate liquidity marked by net cash accruals to its maturing debt obligations, low current ratio, cash and bank balance. Company generated cash accruals of Rs.  4.84 crore for FY2023 as against obligations of Rs. 2.70 crore for the same period. Current Ratio stood at 0.98 times as on 31 March 2023 as against 1.06 times in the previous year. Working capital limits are utilized at ~ 72per cent during the last twelve months ended Oct 23 leaving additional cushion in working capital limits to meet contingencies. Cash and Bank Balances of company stood at Rs 0.64 crore.

Outlook:Stable

­­Acuite believes that JAPL will continue to maintain a 'stable' outlook over the medium term owing to its experienced management and established association with MSIL and Honda. The outlook may be revised to ‘Positive’ in case the company registers substantial increase in its scale of operations while maintaining comfortable operating profit margins. Conversely, the outlook may be revised to ‘Negative’ in case of failure to achieve the projected scalability in revenues or registers deterioration in the financial risk profile on account of higher-than-expected increase in debt-funded working capital requirements.

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 23 (Actual)	FY 22 (Actual)
Operating Income	Rs. Cr.	277.22	216.42
PAT	Rs. Cr.	3.16	2.11
PAT Margin	(%)	1.14	0.97
Total Debt/Tangible Net Worth	Times	1.54	1.73
PBDIT/Interest	Times	2.47	2.33

Status of non-cooperation with previous CRA (if applicable)

­­Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Trading Entitie: https://www.acuite.in/view-rating-criteria-61.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­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

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 16 Jan 2023 Inventory Funding Short Term 10.00 ACUITE A4+ (Assigned) Inventory Funding Short Term 0.38 ACUITE A4+ (Assigned) Working Capital Term Loan Long Term 0.32 ACUITE BB | Stable (Assigned) Term Loan Long Term 9.00 ACUITE BB | Stable (Assigned) Inventory Funding Short Term 4.80 ACUITE A4+ (Assigned) Inventory Funding Short Term 30.00 ACUITE A4+ (Reaffirmed) Cash Credit Long Term 5.50 ACUITE BB | Stable (Assigned) 25 Oct 2022 Secured Overdraft Long Term 5.50 ACUITE BB- ( Issuer not co-operating*) Term Loan Long Term 8.43 ACUITE BB- ( Issuer not co-operating*) Ad-hoc limits (Fund Based) Short Term 1.95 ACUITE A4+ ( Issuer not co-operating*) Channel Financing Short Term 3.00 ACUITE A4+ ( Issuer not co-operating*) Bank Guarantee Short Term 0.50 ACUITE A4+ ( Issuer not co-operating*) Cash Credit Short Term 6.50 ACUITE A4+ ( Issuer not co-operating*) Proposed Working Capital Demand Loan Long Term 0.57 ACUITE BB- ( Issuer not co-operating*) Inventory Funding Short Term 3.55 ACUITE A4+ ( Issuer not co-operating*) 27 Jul 2021 Inventory Funding Short Term 3.55 ACUITE A4+ ( Issuer not co-operating*) Ad-hoc limits (Fund Based) Short Term 1.95 ACUITE A4+ ( Issuer not co-operating*) Term Loan Long Term 8.43 ACUITE BB- (Downgraded and Issuer not co-operating*) Secured Overdraft Long Term 5.50 ACUITE BB- (Downgraded and Issuer not co-operating*) Cash Credit Short Term 6.50 ACUITE A4+ ( Issuer not co-operating*) Channel Financing Short Term 3.00 ACUITE A4+ ( Issuer not co-operating*) Bank Guarantee Short Term 0.50 ACUITE A4+ ( Issuer not co-operating*) Proposed Working Capital Demand Loan Long Term 0.57 ACUITE BB- (Downgraded and Issuer not co-operating*) 29 Apr 2020 Ad-hoc limits (Fund Based) Short Term 1.95 ACUITE A4+ (Issuer not co-operating*) Channel Financing Short Term 3.00 ACUITE A4+ (Issuer not co-operating*) Term Loan Long Term 8.43 ACUITE BB (Issuer not co-operating*) Proposed Working Capital Demand Loan Long Term 0.57 ACUITE BB (Issuer not co-operating*) Secured Overdraft Long Term 5.50 ACUITE BB (Issuer not co-operating*) Bank Guarantee Short Term 0.50 ACUITE A4+ (Issuer not co-operating*) Cash Credit Short Term 6.50 ACUITE A4+ (Issuer not co-operating*) Inventory Funding Short Term 3.55 ACUITE A4+ (Issuer not co-operating*)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating State Bank of India Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 5.60 Simple ACUITE BB+ | Stable | Upgraded State Bank of India Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 0.90 Simple ACUITE BB+ | Stable | Assigned State Bank of India Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 30.00 Simple ACUITE A4+ | Reaffirmed HDFC Bank Ltd Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 4.80 Simple ACUITE A4+ | Reaffirmed Axis Bank Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 10.00 Simple ACUITE A4+ | Reaffirmed State Bank of India Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 0.38 Simple ACUITE A4+ | Reaffirmed State Bank of India Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 29.62 Simple ACUITE A4+ | Assigned HDFC Bank Ltd Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 2.00 Simple ACUITE A4+ | Assigned Bank of Baroda Not Applicable Inventory Funding Not Applicable Not Applicable Not Applicable 8.00 Simple ACUITE A4+ | Assigned State Bank of India Not Applicable Term Loan Not available Not available Not available 9.00 Simple ACUITE BB+ | Stable | Upgraded State Bank of India Not Applicable Term Loan Not available Not available Not available 0.98 Simple ACUITE BB+ | Stable | Assigned HDFC Bank Ltd Not Applicable Working Capital Term Loan Not available Not available Not available 0.22 Simple ACUITE BB+ | Stable | Upgraded

Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Himanshu Mehta Senior Analyst - Rating Operations Tel: 022-49294065 himanshu.mehta@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in Tel: 022-49294011 rating.desk@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.