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Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
Bank Loan Ratings | 714.66 | ACUITE BB+ | Downgraded | Issuer not co-operating* | - |
Bank Loan Ratings | 9.00 | - | ACUITE A4+ | Downgraded | Issuer not co-operating* |
Total Outstanding | 723.66 | - | - |
Rating Rationale |
Acuité has downgraded the long-term rating to ‘ACUITE BB+’ (read as ACUITE Double B plus) from ‘ACUITE A-’ (read as ACUITE A minus) and short-term rating to 'ACUITE A4+' (read as ACUITE A four plus) from 'ACUITE A1 (read as ACUITE A one)' on the Rs. 723.66 Cr. bank facilities of L H Sugar Factories Limited. The rating is now flagged as “Issuer Not-Cooperating” and is downgraded on the account of information risk.
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About the Company |
L H Sugar Factories Limited, was incorporated in 1933 by two brothers – Raja Lalta(L) and Sahu Hari(H). At present the company is being managed by the descendants of the two family. The company is engaged in manufacturing of sugar and its by-products such as molasses used for ethanol generation and bagasse used for power generation.LH Sugar Factories has 13000 TCD sugar mill at Pilibhit in north-western UP. The sugar mill is forward integrated with co generation of 44.25 MW and a distillery of 160 KLPD.
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Unsupported Rating |
Not Applicable. |
Non-cooperation by the issuer/borrower |
Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit such critical information before the due date. Acuité believes that information risk is a critical component in such ratings, and non cooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is, therefore, being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.
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Limitation regarding information availability |
The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavored to gather information about the entity/industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.
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Rating Sensitivities |
No information provided by the issuer / available for Acuite to comment upon. |
Liquidity Position |
No information provided by the issuer / available for Acuite to comment upon. |
Outlook |
Not Applicable. |
Other Factors affecting Rating |
None. |
Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
Operating Income | Rs. Cr. | 1203.42 | 1029.71 |
PAT | Rs. Cr. | 38.00 | 36.88 |
PAT Margin | (%) | 3.16 | 3.58 |
Total Debt/Tangible Net Worth | Times | 0.76 | 1.38 |
PBDIT/Interest | Times | 5.54 | 5.40 |
Status of non-cooperation with previous CRA |
Not Applicable. |
Any other information |
None. |
Applicable Criteria |
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 |
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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