Press Release April 04, 2025 NEERU`S ENSEMBLES PRIVATE LIMITED Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	51.00	ACUITE C | Downgraded	-
Total Outstanding	51.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­Acuité has downgraded its long-term rating to ‘ACUITE C’ (read as ACUITE C) from ‘ACUITE BB-’ (read as ACUITE double B minus) on the Rs. 51.00 crore bank facilities of Neeru`s Ensembles Private Limited.  Rationale for Downgrade The downgrade is based on Credit information bureau report which reflects that there were delays of 01 day in long term loan in the month of March 2025.

About the Company

­Neeru`s Ensembles Private Limited (NEPL), a Hyderabad based company by Mr. Harish Kumar, Ms. Neeru Kumar. It was initially established as a wholesale trading firm in the year 1971; later in 2005 it was incorporated as private limited company and NEPL is currently managed by Mr. Harish Kumar, Ms. Neeru Kumar and Mr. Avnish Kumar as directors. The company is engaged in manufacturing and trading of apparels for kids, ladies and gents. For the portion of revenue, which is classified as trading of apparels, NEPL adds value by designing the product. The company has its three manufacturing facilities located in Hyderabad, Mumbai and Delhi. NEPL procures its key raw materials from domestic market from Mumbai, Delhi, Kolkata, Chennai, and other places. The key raw materials required are cotton, polyester, viscose. The company has its 45 showrooms across 25 cities.

Unsupported Rating

­Not Applicable

Analytical Approach

­­Acuité has considered the standalone business and financial risk profile of NEPL to arrive at the rating.

Key Rating Drivers

Strengths

­­Experienced management: Established in the year 2005, The company is engaged in manufacturing and trading of Apparels for Kids, Ladies and Gents. Currently Mr. Neeru Kumar And Mr. Avinash Kumar are the Directors of the company. The promoters of NEPL, Mr. Harish Kumar, Ms. Neeru Kumar has over four decades of experience in this industry. Previously it was operating as a partnership firm. The company has presence in around 25 cities with 45 showrooms. Acuité believes that the company will benefit from its experienced management and geographical diversified operations.

Weaknesses

Intense market competition The company is exposed to intense market competition in the highly unorganised and competitive retail garment business. This has resulted in pressure on margin of the company. Acuite believes that the Company would be susceptible to intensive competition over the medium term.  Delays in servicing term debt obligations The downgrade is based on credit information bureau report which reflects delay in repayment of long term loan in the month of March in  2025.

Rating Sensitivities

­Timely servicing of the debt obligations.

Liquidity Position

Poor

­­The liquidity is poor because the company has made delays in the month of March 2025 in servicing the debt obligations as reflected from the Credit Information Report.

Outlook: Not Applicable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Provisional)	FY 23 (Actual)
Operating Income	Rs. Cr.	231.43	191.74
PAT	Rs. Cr.	7.19	5.77
PAT Margin	(%)	3.11	3.01
Total Debt/Tangible Net Worth	Times	10.76	17.35
PBDIT/Interest	Times	1.87	1.81

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

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• 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.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 19 Aug 2024 Cash Credit Long Term 11.90 ACUITE BB- | Stable (Upgraded from ACUITE B+) Cash Credit Long Term 25.00 ACUITE BB- | Stable (Upgraded from ACUITE B+) Working Capital Demand Loan (WCDL) Long Term 14.10 ACUITE BB- | Stable (Upgraded from ACUITE B+) 07 Jun 2024 Proposed Long Term Bank Facility Long Term 0.10 ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-) Cash Credit Long Term 11.90 ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-) Cash Credit Long Term 13.00 ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-) Working Capital Term Loan Long Term 10.00 ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-) Cash Credit Long Term 16.00 ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-) 10 Mar 2023 Cash Credit Long Term 16.00 ACUITE BB- (Reaffirmed & Issuer not co-operating*) Working Capital Term Loan Long Term 10.00 ACUITE BB- (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 13.00 ACUITE BB- (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 11.90 ACUITE BB- (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 0.10 ACUITE BB- (Reaffirmed & 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 ICICI Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 11.90 Simple ACUITE C | Downgraded ( from ACUITE BB- ) HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE C | Downgraded ( from ACUITE BB- ) Tata Capital Limited Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 14.10 Simple ACUITE C | Downgraded ( from ACUITE BB- )

Contacts

Mohit Jain Senior Vice President - Rating Operations Abhishek Singh Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@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. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.