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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 42.82 | ACUITE C | Downgraded | - |
| Total Outstanding | 42.82 | - | - |
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Rating Rationale |
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Acuite has downgraded its long-term rating to ‘ACUITE C' (read as ACUITE C) from 'ACUITE BB+' (read as ACUITE double B plus) on the Rs.42.82 Cr. bank facilities of Mahika Packaging India Limited(MPIL). Rationale for Downgrade The downgrade is on account of delays observed servicing of bank debt obligations. |
| About the Company |
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Incorporated in 2005, Mumbai based Mahika Packaging India Limited is engaged in manufacturing of custom plastic packaging solutions across different market sectors including personal care, healthcare, chemical and household product markets Mahika Packaging India Limited current product portfolio includes dispensing caps and closures, plastic bottles, co-extruded tubes, laminated tubes, self-adhesive labels and shrink sleeves that are designed to cater to specific needs and demands of different industries. Mahika Packaging India Limited has its manufacturing facilities are located in Daman and Vapi the company has its presence in domestic as well as international markets such as Australia, the U.S.A, the Middle East, South Africa, and Turkey to name a few. The current director of company is Mr. Amit Sushil Gupta, Mr. Tapan Kumar Banerjee, Mrs. Gunjan Parun Mehra, Mr. Sushil Brijlal Gupta and Mr. Sumit Sushil Gupta.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone view of the business and financial risk profile of MPIL to arrive at the rating |
| Key Rating Drivers |
| Strengths |
| Experienced Management with established track record of operations
The promoter, Mr. Sushil Gupta has an extensive experience in the packaging industry for more than two decades. The other members of the family including his two sons Mr. Amit Gupta and Mr. Sunil Gupta are also engaged in the business. The extensive experience of the promoters and established presence in the industry has helped the company to generate healthy relations with various customers and suppliers in the domestic market as well as international market. MPIL caters to a reputed client base including Dabur India, Castrol India, Unilever, Patanjali Ayurved, Torrent Pharmaceuticals, Ipca Laboratories, Abbott Laboratories in India to name a few. In the international market, the company has its presence in Australia, the USA, the Middle East, South Africa, and Turkey to name a few. Its portfolio of international clients consists of Walmart, Walgreens,CVS Pharmacy to name a few. |
| Weaknesses |
| Instances of delays in servicing of debt obligations
Instances of delays in servicing of bank debt obligations have been reported in credit bureau information report of the company in recent past. Intensive Working Capital Management The company has working capital intensive nature of operations marked by improved yet high Gross Current Assets (GCA) days of 129 days in FY23 as against 170 days in FY22. This is majorly due to high inventory days and debtor days. The inventory days saw a improvement to 89 days as on March 31, 2023 as against 129 days as on March 31, 2022 and creditor days in FY23 is 36 days as against 101 days in FY22. Furthermore, the working capital management of the firm is moderate marked by GCA days of 129 in FY23. The payment terms for domestic purchase are full or partial advance. |
| Rating Sensitivities |
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| Liquidity Position |
| Poor |
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The company’s liquidity position is poor marked by recent instances of overdrawings and delays in meeting repayment obligations as confirmed by the banker and credit information bureau report. |
| Outlook |
| Not Applicable |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 121.97 | 71.40 |
| PAT | Rs. Cr. | 9.36 | 2.60 |
| PAT Margin | (%) | 7.67 | 3.64 |
| Total Debt/Tangible Net Worth | Times | 0.82 | 0.88 |
| PBDIT/Interest | Times | 2.99 | 3.19 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • 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 |
| 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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