Press Release

Press Release

December 24, 2024

RMG POLYVINYL INDIA LIMITED
Rating Reaffirmed and Partly Withdrawn

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	44.00	ACUITE A \| Positive \| Reaffirmed \| Stable to Positive	-
Bank Loan Ratings	10.00	ACUITE A \| Reaffirmed & Withdrawn	-
Bank Loan Ratings	2.60	Not Applicable \| Withdrawn	-
Bank Loan Ratings	40.00	-	ACUITE A1 \| Reaffirmed
Total Outstanding	84.00	-	-
Total Withdrawn	12.60	-	-

Rating Rationale

Acuite has reaffirmed long-term rating at 'ACUITE A' (read as ACUITE A) and short term rating at 'ACUITE A1' (read as ACUITE A one) on the Rs.84.00 Cr. bank facilities of RMG Polyvinyl India Limited (RPIL). The outlook is revised from 'Stable' to 'Positive'.

Acuite has reaffirmed and withdrawn long-term rating at 'ACUITE A' (read as ACUITE A) on the Rs.10.00 Cr. bank facilities of RMG Polyvinyl India Limited. The rating is being withdrawn on account of request received from the company.

Further, Acuité has withdrawn its long-term rating on the bank loan facilities of Rs.2.45 Cr. bank facilities of RMG Polyvinyl India Limited without assigning any rating as the instrument is fully repaid. The rating is being withdrawn on account of request received from the company and NDC (No Due Certificate) received from the banker.

Further, Acuité has withdrawn its long-term rating on the bank loan facilities of Rs.0.15 Cr. bank facilities of RMG Polyvinyl India Limited without assigning any rating as it is a proposed facility. The rating is being withdrawn on account of request received from the company.

The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument.

Rationale for Rating
The rating reaffirmation and revision in outlook factors the long track record of operations along with experienced management, regular yet calibrated capex, efficient working capital management, healthy financial risk profile and adequate liquidity position of the company.
There has been a upward trend in operating revenue which stood at Rs.443.14 Cr. in FY 2024 as against Rs.397.57 Cr. in FY 2023 along with improved EBITDA and PAT margin which stood at 12.68 per cent and 5.60 per cent respectively in FY2024. Further, the financial risk profile of the company is healthy marked by gearing below unity and improved debt protection metrics as reflected by reflected by interest coverage ratio and debt service coverage ratio which stood at 28.96 times and 9.99 times respectively as on 31st March 2024. The company has also undertaken capex for production capacity expansion at Sikandrabad (UP) plant along with greenfield expansion by setting up a new plant at Tamilnadu which will be a key monitorable. The rating also factors in the efficient working capital management marked by GCA days which stood at 76 days as on 31st March 2024 and adequate liquidity position as reflected by net cash accruals of Rs.47.11 Cr. as on 31^st March 2024 as against the debt repayment obligation of Rs.2.78 Cr. over the same period. However, the rating is further constrained by competition from organized and unorganized players and susceptibility of margins to raw material price fluctuation.

About the Company

RMG Polyvinyl India Limited was incorporated in 1998 and is engaged in the business of manufacturing and trading of PVC flooring, PVC artificial leather, PVC films and sheeting and PVC geomembrane sheets. The company generates its revenues by selling its products both in the domestic market as well as exports to countries such as Bangladesh, New Zealand and Italy to name a few. It has its registered office in Delhi. Mrs. Indira Goenka, Mr. Arvind Goenka, Mr. Ramesh Bhujang, Mr. Ashish Mohan and Mr. Binod Kumar are the Directors of the company.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profiles of RMG Polyvinyl India Limited to arrive at this rating.

Key Rating Drivers

Strengths

Established track record of operations with experienced management
RPIL has established track record of operations for more than two decades and is promoted by Mr. Arvind Goenka who has been engaged in the PVC industry for more than three decades. The operations of the company are managed by the promoters as well as well experienced senior management team. The extensive experience of the promoters has helped the company to established long and healthy relationships with its customers and suppliers over the years. The company has two manufacturing facilities located in Sikandrabad (UP) with a current installed capacity of producing 70,000 MT per annum and in Tamil Nadu, which is a new plant set up in FY2024 to increase the scale of operations of the company. Acuité believes that the company will sustain its existing business profile over the medium term on the back of an established track record of operations with an experienced management.

Improvement in the scale of operations
The company witnessed upward trend in scale of operations, registering growth of 11.46% wherein operating revenue stood at Rs.443.14 Cr. in FY2024 as against Rs.397.57 Cr. in FY2023. The growth in revenue is driven by increase in domestic as well as export sales of the company along with volume growth on year-on year basis. The operating margin of the company has increased in FY 2024 to 12.68% from 8.45% in FY 2023. PAT margin too has increased from 5.60% in FY 2023 to 8.73% in FY 2024. In addition, the company has also increased their production capacity from 55000 MT in FY2023 to 70000 MT in their plant at Sikandrabad (Uttar Pradesh) and have set up a new plant at Tamilnadu for the same in FY2024 with a total capital outlay of Rs.28.14 Cr. as a strategy to cover the South Indian market and to increase the production capacity of the company. Further, the company has clocked an operating income of Rs.270.55 Cr. as on 31st October, 2024 thereby expecting the revenue and profitability to increase and achieving a top-line of around Rs.500 Cr. in FY2025.

Healthy Financial Risk Profile
The financial risk profile of the company is healthy marked by net-worth of Rs.169.58 Crore as on 31st March 2024 as against Rs.145.62 Crore as on 31st March 2023. The increase in the net-worth is on an account of accretion of profits into reserves. Further, the total debt of the company stood at Rs.41.32 Crore as on 31st March 2024 as against Rs.13.78 Crore as on 31st March 2023. This increase is due to additional term loan facility taken by the company to fund the capex as well as infusion unsecured loans from promoters. The capital structure of the company is healthy marked by gearing ratio of the company which stood at 0.24 times as on 31st March 2024 as against 0.09 times as on 31st March 2023. Further, the coverage indicators of the company improved reflected by interest coverage ratio and debt service coverage ratio of the company which stood at 28.96 times and 9.99 times respectively as on 31st March 2024 as against 18.53 times and 6.38 times respectively as on 31st March 2023. The TOL/TNW ratio of the company stood at 0.49 times as on 31st March 2024 as against 0.42 times as on 31st March 2023 and DEBT-EBITDA of the company stood at 0.66 times as on 31st March 2024 as against 0.35 times as on 31st March 2023. Acuité believes that going forward the financial risk profile of the company will remain healthy in near to medium term.

Efficient Working Capital operations
The working capital operations of the company are managed efficiently marked by GCA days which stood at 76 days as on 31st March 2024 as compared to 74 days as on 31st March 2023. The debtor days of the company stood at 14 days as on 31st March 2024 against 17 days as on 31st March 2023 and the creditor days of the company stood at 29 days as on 31st March 2024 against 38 days as on 31st March 2023. Further, the inventory holding stood at 52 days as on 31st March 2024 as against 49 days as on 31st March 2023. In addition, the average fund based bank limit utilization of the company stood nil in last five months ended October 2024. Acuité expects that the working capital operations of the company to remain at similar levels over the medium term.

Weaknesses

Susceptibility of margins to raw material price fluctuation
As RPIL is engaged into manufacturing of PVC products, the major raw material required to manufacture such products is PVC resin which is a derivative of crude oil and the prices of crude oil are directly affected by various macroeconomic factors. Similarly, the prices of PVC resins are also volatile in nature and such fluctuations in the major raw material price may impact the operating profit margin of the company.

Competition from other organized and unorganized players
The company is facing strong competition from organized players as well as the unorganized players in the industry. Further, the company has competition from imported products traded in the country.

Rating Sensitivities

Movement in scale of operations and profitability position of the company.
Working capital cycle

Liquidity Position

Adequate

The liquidity profile of the company is adequate marked by adequate cash accruals to its maturing debt obligations. The company has generated net cash accruals of Rs.47.11 Cr. as on 31^st March 2024 as against the debt repayment obligation of Rs.2.78 Cr. over the same period. Going forward, the company is expected to generate net cash accruals under the range of Rs.50 Cr. to Rs.55 Cr. against the debt repayment obligations of upto Rs.4.81 Cr. over the same period. The current ratio of the company stood at 2.42 times as on 31st March 2024 as against 2.04 times as on 31st March 2023. Further, the cash and cash equivalents available with the company stood at Rs.3.60 Cr. as on 31st March 2024. Acuité believes that going forward the company will maintain adequate liquidity position due to steady accruals.

Outlook: Positive

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	443.14	397.57
PAT	Rs. Cr.	38.69	22.28
PAT Margin	(%)	8.73	5.60
Total Debt/Tangible Net Worth	Times	0.24	0.09
PBDIT/Interest	Times	28.96	18.53

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
• 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
06 Oct 2023	Cash Credit	Long Term	16.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	4.00	ACUITE A \| Stable (Assigned)
	Term Loan	Long Term	2.45	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Loan	Long Term	0.15	ACUITE A \| Stable (Reaffirmed)
	Term Loan	Long Term	27.00	ACUITE A \| Stable (Assigned)
	Term Loan	Long Term	7.00	ACUITE A \| Stable (Assigned)
	Letter of Credit	Short Term	40.00	ACUITE A1 (Reaffirmed)
01 Feb 2023	Cash Credit	Long Term	15.00	ACUITE A \| Stable (Reaffirmed)
	Term Loan	Long Term	3.60	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Loan	Long Term	5.25	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Loan	Long Term	4.75	ACUITE A \| Stable (Assigned)
	Letter of Credit	Short Term	30.00	ACUITE A1 (Reaffirmed)
25 Jan 2022	Term Loan	Long Term	10.00	ACUITE A \| Stable (Upgraded from ACUITE A- \| Stable)
	Term Loan	Long Term	1.00	ACUITE A \| Stable (Upgraded from ACUITE A- \| Stable)
	Cash Credit	Long Term	13.00	ACUITE A \| Stable (Upgraded from ACUITE A- \| Stable)
	Term Loan	Long Term	0.04	ACUITE A (Upgraded & Withdrawn from ACUITE A- \| Stable)
	Term Loan	Long Term	0.46	ACUITE A (Upgraded & Withdrawn from ACUITE A- \| Stable)
	Stand By Line of Credit	Long Term	1.00	ACUITE A (Upgraded & Withdrawn from ACUITE A- \| Stable)
	Term Loan	Long Term	0.38	ACUITE A (Upgraded & Withdrawn from ACUITE A- \| Stable)
	Term Loan	Long Term	1.20	ACUITE A (Upgraded & Withdrawn from ACUITE A- \| Stable)
	Letter of Credit	Short Term	24.00	ACUITE A1 (Reaffirmed)
	Proposed Letter of Credit	Short Term	5.85	ACUITE A1 (Reaffirmed)

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 avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	16.00	Simple	ACUITE A \| Positive \| Reaffirmed \| Stable to Positive
State Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.00	Simple	ACUITE A \| Positive \| Reaffirmed \| Stable to Positive
State Bank of India	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE A1 \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.15	Simple	Not Applicable\|Withdrawn
State Bank of India	Not avl. / Not appl.	Term Loan	29 Aug 2023	Not avl. / Not appl.	05 Sep 2029	20.00	Simple	ACUITE A \| Positive \| Reaffirmed \| Stable to Positive
State Bank of India	Not avl. / Not appl.	Term Loan	29 Aug 2023	Not avl. / Not appl.	05 Sep 2029	4.00	Simple	ACUITE A \| Positive \| Reaffirmed \| Stable to Positive
State Bank of India	Not avl. / Not appl.	Term Loan	29 Aug 2023	Not avl. / Not appl.	05 Sep 2029	3.00	Simple	ACUITE A \| Reaffirmed & Withdrawn
State Bank of India	Not avl. / Not appl.	Term Loan	29 Aug 2023	Not avl. / Not appl.	05 Sep 2029	7.00	Simple	ACUITE A \| Reaffirmed & Withdrawn
State Bank of India	Not avl. / Not appl.	Term Loan	13 Jul 2021	Not avl. / Not appl.	28 Nov 2023	2.45	Simple	Not Applicable\|Withdrawn

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Archita Sharma
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.

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