|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 17.00 | ACUITE BB | Stable | Reaffirmed | - |
| Total Outstanding | 17.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
|
Rating Rationale |
|
Acuité has reaffirmed the long-term rating of 'ACUITE BB' (read as ACUITE Double B) to the Rs.17.00 Cr. bank facilities of Sairam Stone Crusher (SSC). The outlook is ‘Stable’.
Rationale for Rating The rating reaffirmation factors in the improvement in operating performance of the firm and moderate financial risk profile. Further, the rating also takes into consideration experienced management and long operations track record of the firm. However, the rating is constrained due to working capital intensive operations and high dependence on cyclical end user industries. |
| About the Company |
|
Pune based Sairam Stone Crusher was established as a partnership firm in 2011. The firm is managed by partners Mr. Sagar Zurunge, Mr. Kiran Sakore, Mr. Dattatray Zurunge, Mr. Moreshwar Sakore, Mr. Sampat Sakore, and Ms. Sulochana Zurunge. The firm is engaged in crushing of stones which are sold to infra developers, government departments and dealers for use in various construction works of road building, setting up of railway tracks and other construction works.
|
| Unsupported Rating |
|
Not Applicable
|
| Analytical Approach |
|
Acuité has considered the standalone financial and business risk profiles of SSC to arrive at the rating.
|
| Key Rating Drivers |
| Strengths |
| Established track record of operations and experienced management
The firm is managed by partners Mr. Sagar Zurunge, Mr. Kiran Sakore, Mr. Dattatray Zurunge, Mr. Moreshwar Sakore, Mr. Sampat Sakore, and Ms. Sulochana Zurunge, who have been engaged in this industry for more than a decade. The management’s experience has helped SSC to maintain healthy relationship with customers like J Kumar Infra Projects Limited, Godrej & Boyce and among others. Acuité believes that the partners’ experience will support in improvement of SSC’s business risk profile over the medium term. Improvement in operating performance
The revenue of the firm stood at Rs.67.56 Cr. as in FY2024 as against Rs.59.63 Cr. in FY2023 registering a growth of ~13.30 per cent in FY2024, further the firm has reported revenue of ~Rs.94.00 Cr. in 10MFY2025. The improvement in on account of increase in demand of the crushed stone domestically. Further, the operating profit margin has moderately improved and stood at 16.83 per cent in FY2024 from 16.72 per cent in FY2023. Also, the PAT margin improved and stood at 8.29 per cent in FY2024 as compared to 5.63 per cent in FY2023. Moderate Financial Risk Profile
SSC has moderate financial risk profile marked by moderate net worth, average gearing and debt protection metrics. The tangible net worth stood at Rs.12.36 Cr. as on 31 March 2024 as against Rs.14.83 crore as on 31 March 2023, reduction in net worth is due to withdrawal of partners’ capital. The gearing level of the company stood at 2.66 times as on 31 March 2024 as against 1.91 times as on 31 March 2023. The total debt outstanding of Rs. 32.84 Cr. consists of working capital borrowings of Rs. 7.20 Cr, unsecured loan from promoters of Rs. 3.67 Cr, term loan obligations of Rs.18.97 crore and CPLTD of Rs.3.00 Cr. as on 31 March 2023. The coverage ratios of the company are moderate with Interest Coverage Ratio (ICR) of 4.54 times for FY2024 as against 4.01 times for FY2023. Also, the Debt Service Coverage Ratio (DSCR) stood at 2.09 times for FY2024 as against 1.43 times for FY2023. Further, Net Cash Accruals to Total Debt (NCA/TD) stood at 0.28 times for FY2024 as against 0.27 times for FY2023. Acuite believes further improvement in SSC’s financial risk profile over the medium term will remain a key rating monitorable. |
| Weaknesses |
| Working capital intensive operations
The operations of the company remained working capital intensive albeit improved marginally as evident in GCA of 146 days for FY2024 as against 170 days in FY2023. The GCA days are high on account of high debtor days of 102 days for FY2024 as against 150 days for FY2023. The inventory days are low at 04 days for FY2024 as against 05 days for FY2023. Credit period offered to infra developers is around 30 to 60 days, however payment gets delayed sometimes. Payment from dealers is received immediately and credit period for government department is around 45 days. The average utilization of the working capital limits of the company remained at ~96.67 percent for the last 10 months ended January 2025. Acuité believes that the working capital requirement is likely to remain at similar levels in the near to medium term. High dependence on cyclical end user industries Sairam Stone Crusher (SSC) generates ~30 per cent revenue direct from builders and infra developers, 30 per cent through dealers and 40 per cent through government departments. The company's addition of a fourth crusher plant in Pune enhances its production capacity to meet the fluctuating demand in the cyclical construction industry. This reliance makes the company vulnerable to economic fluctuations; during downturns, construction activity can decline sharply, leading to potential revenue drops. |
| Rating Sensitivities |
|
Significant Improvement in scale of operations and profitability
Deterioration in working capital cycle Changes in Financial risk profile |
| Liquidity Position |
| Adequate |
|
The firm’s liquidity position is adequate marked by sufficient net cash accruals against its maturing debt obligations. The firm has net cash accruals of Rs. 9.05 Cr. against its maturing debt obligations of Rs.3.00 crore in FY2024. The firm maintains unencumbered cash and bank balances of Rs. 0.11 crore as on March 31, 2024. The current ratio stands at 0.74 times as on March 31, 2024. Average bank limit utilization for fund-based limits stood at ~96.67 percent for the last 10 months ended January 2024. Acuité believes that going forward the firm will maintain adequate liquidity position due to steady accruals.
|
| Outlook: Stable |
| |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 67.56 | 59.63 |
| PAT | Rs. Cr. | 5.60 | 3.36 |
| PAT Margin | (%) | 8.29 | 5.63 |
| Total Debt/Tangible Net Worth | Times | 2.66 | 1.91 |
| PBDIT/Interest | Times | 4.54 | 4.01 |
| 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 |
|
| |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
Contacts |
About Acuité Ratings & Research |
