Press Release

Press Release

March 25, 2025

PADMASRI RICE INDUSTRIES PRIVATE LIMITED
Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	5.00	ACUITE BB- \| Stable \| Assigned	-
Bank Loan Ratings	36.00	ACUITE BB- \| Stable \| Reaffirmed	-
Total Outstanding	41.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has reaffirmed its long-term rating of ACUITE BB- (read as ACUITE Double B Minus) on Rs. 36.00 crore bank facilities of Padmasri Rice Industries Private Limited (PRIPL). The outlook is 'Stable'. Further, Acuite has also assigned a long term rating of ACUITE BB- (read as ACUITE Double B Minus) on Rs. 5.00 crore bank facilities of Padmasri Rice Industries Private Limited (PRIPL). The outlook is 'Stable'.

Rational for rating reaffirmation
The rating reaffirmation considers PRIPL’s stabilised operating performance, adequate liquidity position and average financial risk profile. The rating continues to draw comfort from the established experience of the management and location advantage. However, the rating is constrained by its moderately intensive working capital management, the competitive nature of the industry as well as susceptibility of profitability due to volatility in raw material prices.

About the Company

Telangana based, Padmasri Rice Industries Private Limited (PRIPL) incorporated in 2023. The company is engaged in the Rice milling and other related activities. The current Director of company is Mr. Murali Mohan Jaini, Mr. Paidimarry Ranganadh and Mr. Yadagiri Pabba.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of PRIPL.

Key Rating Drivers

Strengths

Experienced promotors and location advantage of the Rice Mill
Padmasri Rice Industries Private limited (PRIPL) was initially established as a partnership firm in February 2021 and later converted into Private limited company in September'2023. Company is promoted by Mr. Murali Mohan Jaini and Mrs.Shailaja Jaini and is engaged in rice milling activity. Promotors of the company has extensive experience in rice milling business. Company’s factory is located at Miryalaguada, Telangana with annual milling capacity of four lakh quintals. Miryalaguda, TS that is one of the largest rice mill hubs in India which is surrounded by paddy fields fuelled by the good irrigation facility and close proximity to procurement facilities. The area is well connected with road network for supply and procurement of finished goods and raw materials and has adequate availability of both skilled and unskilled worker. Products of the company includes lashkari rice, HMT, R&R, BPT and other variety of rice. Acuite believes that company will continue to benefit from extensive experience of the promotors and location advantage of its Rice mill in near to medium term.

Stabilization of operations
The revenue of the company increased and stood at Rs. 89.19 Crore in FY24 compared to revenue of Rs. 48.27 crore in FY23. PRIPL has recorded a revenue of Rs. 93.28 crores in 10MFY25. The operating profit margin of the company stood at 7.30 percent in FY24 compared to 10.93 percent in FY23. The operating profitability margins of the company are directly linked to the fluctuations in the paddy prices. The PAT margin of the company stood at 0.40 percent in FY24 compared to 0.45 percent in FY23. Acuité believes that the operations of the company will remain stable over the medium term on account of experience promoters and location advantage of its factory unit.

Average financial risk profile
PRIPL has an average financial risk profile marked by low net worth, high gearing and moderate debt protection metrics. The company’s net worth stood at Rs. 8.35 crore as of March 31, 2024, against Rs. 10.89 crore as of March 31, 2023. PRIPL got converted into a Private Limited Company from a Partnership firm in September 2023. Post-conversion of the company the existential partner’s capital of Rs. 10.89 crores got converted into Rs. 8.00 crores fully paid up capital and Rs. 2.89 crores converted into USL from Directors bearing interest at 9 per cent. The company’s gearing stood higher at 3.72 times as on March 31,2024 as against 1.58 times as on March 31, 2023. The company’s total debt as on March 31,2024 stood at Rs. 31.07 crores as compared to Rs. 17.22 crores as on March 31, 2023; comprising of long-term debt of Rs. 10.85 crores, short term debt of Rs. 12.93 crores, USL from directors of Rs. 4.99 crores and maturing debt obligations of Rs. 2.29 crores for the same period. The interest coverage ratio of the company stood at 2.61 times in FY24 against 2.79 times in FY23. DSCR stood at 2.55 times in FY2024 against 2.79 times in FY2023. Acuité believes that the ability of PRIPL to improve its financial risk profile over the medium term will remain a key rating sensitivity factor.

Weaknesses

Moderately Intensive Working capital operations
PRIPL has moderately Intensive working capital operations as reflected by the gross current asset (GCA) days of 101 days in FY2024 against 65 days in FY2023. Inventory days stood at 66 days in FY2024 against 19 days in FY2023. The average inventory holding period of the company is around 60- 90 days. The debtor days stood at 38 days for FY24 against 35 days in FY23. The average credit period allowed to the customers is around 30-60 days. The creditor days of the company stood at 22 days for FY24 as against 56 days in FY23. The average credit period allowed by the suppliers is around 30-60 days.
Acuité believes that the working capital cycle of the company will remain on a similar level in the medium to long term.

Susceptibility of profitability to competitive industry and fluctuations in raw material prices
The company operates in a highly competitive and fragmented industry and faces tough competition from various established brands in the rice milling industry as well as several unorganized players, which can have an impact on the bargaining powers with the customers and hence on the margins. Profitability margins are also susceptible to raw material price fluctuation and on the proportion of trading and processing activities of the company.

Rating Sensitivities

Consistent Improvement in revenues and profitability margins
Further elongation in working capital cycle leading to stretch in liquidity
Deterioration in financial risk profile

Liquidity Position

Adequate

Liquidity is adequately backed by PRIPL’s net cash accruals, which stood at Rs. 3.95 crores as on March 31, 2024, against maturing debt repayment obligation of Rs. 2.29 crore for the same period. Going forward the NCA are expected in the range of Rs. 3 to Rs. 4 crores for period FY2025-FY2026 against its repayment obligation of around Rs. 2 crores during the same period. The cash and bank balances of the company stood at Rs. 0.06 crore as on March 31, 2024. The current ratio stood at 1.26 times as on March 31, 2024. The average bank limit utilization for 08 months period ended January 2025 stood at ~39.39 per cent for fund-based limits.

Acuité believes that going forward the liquidity of PRIPL is likely to remain adequate over the medium term on account of sufficient cash accruals against its maturing debt obligations for the same period.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	89.19	48.27
PAT	Rs. Cr.	0.35	0.22
PAT Margin	(%)	0.40	0.45
Total Debt/Tangible Net Worth	Times	3.72	1.58
PBDIT/Interest	Times	2.61	2.79

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
26 Dec 2023	Term Loan	Long Term	16.00	ACUITE BB- \| Stable (Assigned)
	Cash Credit	Long Term	7.00	ACUITE BB- \| Stable (Assigned)
	Proposed Long Term Bank Facility	Long Term	13.00	ACUITE BB- \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Union Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE BB- \| Stable \| Reaffirmed
Union Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE BB- \| Stable \| Assigned
Union Bank of India	Not avl. / Not appl.	Term Loan	29 Apr 2021	Not avl. / Not appl.	29 Apr 2030	16.00	Simple	ACUITE BB- \| Stable \| Reaffirmed

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Dheeraj Salian
Associate 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.