Press Release

Press Release

December 31, 2024

SANJAY GRAIN PRODUCTS PRIVATE LIMITED
Rating Reaffirmed and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	74.23	ACUITE BB+ \| Stable \| Upgraded	-
Bank Loan Ratings	17.57	-	ACUITE A4+ \| Reaffirmed
Total Outstanding	91.80	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded the long-term rating of 'ACUITÉ BB' (read as ACUITÉ Double B) to 'ACUITÉ BB+' (read as ACUITÉ Double B Plus) on the Rs. 74.23 Cr. bank facilities and has reaffirmed the short-term rating of 'ACUITÉ A4+' (read as ACUITÉ A Four Plus) on the Rs. 17.57 Cr. bank facilities of Sanjay Grain Products Private Limited (SGPPL). The outlook is ‘Stable’.

Rationale for Upgrade

The rating factors the improvement in SGPPL’s financial and operational performance, supported by better profitability, better debt protection metrics, and healthier business operations. In FY2024, the company's operating margin increased to 3.63% in FY24 from 3.42% in FY23, while the PAT margin rose to 0.72% in FY24 from 0.44% in FY23, indicating improvement in operational efficiency and a recovery from previous challenges. Additionally, the company's debt protection metrics showed some improvement, with the interest coverage ratio rising to 1.74 times in FY24. However, the reduction in working capital limits highlights the importance of evaluating the sustainability of revenue while maintaining margins.

About the Company

Established in 1997 and headquartered in Raipur, Chhattisgarh, Sanjay Grain Products Private Limited (SGPPL) is led by Mr. Deepak Kumar Mittal and Mr. Sanjay Kumar Mittal. Specializing in the milling and processing of fortified rice and chana. SGPPL trades processed rice under the brands “36 Bhog,” “Ladla Beta,” “Maharathi,” and “Sunultra.”

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone financial and business risk profile of Sanjay Grain Products Private Limited (SGPPL).

Key Rating Drivers

Strengths

Long Operational Track Record and Experienced Management
SGPPL has a long operational track record spanning over two decades, benefiting from the experience of its promoters, Mr. Deepak Kumar Mittal and Mr. Sanjay Kumar Mittal, each having more than 20 years of experience in the agro-trading and processing industry. The company is supported by an experienced team, and its established operational history has contributed to business growth. Over time, SGPPL has built long-standing relationships with its customers and suppliers, resulting in repeat orders. Acuité assesses that the company is likely to continue drawing on the experience of its management and its established relationships with customers and suppliers in the medium term.

Weaknesses

Average Financial Risk Profile
The company’s financial risk profile is characterized by improved gearing, modest debt protection metrics and low albeit improving net worth with an infusion of equity amounting to Rs. 3.4 Cr, consisting of 809,524 shares at a face value of Rs. 10 each, with a share premium of Rs. 32. The tangible net worth of the company increased to Rs. 26.75 Cr. in FY24, up from Rs. 20.38 Cr. in FY23, primarily due to the accumulation of reserves and the inclusion of new share capital, which was allotted in FY24 and issued in FY25.
Elongation of Working Capital Cycle
It has been noted that the company’s working capital cycle has gradually elongated, as indicated by the decreasing cash credit (CC) limit in the sanction letter.

Rating Sensitivities

Growth in the scale of operations while maintaining margins.
Movement in working capital cycle.

Liquidity Position

Adequate

The company’s liquidity position is adequate, reflected by steady net cash accruals of Rs. 4.39 Cr. in FY24, compared to long-term debt repayment obligations of Rs. 2.58 Cr. over the same period. Additionally, the fund-based limit remained high, with an average utilization of approximately 97% during the six months ending October 2024. The company’s liquidity is also marked by a moderate yet increased working capital cycle, with Gross Current Assets (GCA) standing at 115 days for FY24 compared to 106 days in FY23. However, the current ratio remained relatively low at 1.15 times in FY24. Acuité believes that the company will maintain an adequate liquidity position moving forward, supported by steady accruals.

Outlook : Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	335.36	244.75
PAT	Rs. Cr.	2.42	1.09
PAT Margin	(%)	0.72	0.44
Total Debt/Tangible Net Worth	Times	2.89	2.38
PBDIT/Interest	Times	1.74	1.47

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
26 Oct 2023	Bank Guarantee (BLR)	Short Term	3.50	ACUITE A4+ (Reaffirmed)
	Proposed Short Term Bank Facility	Short Term	14.07	ACUITE A4+ (Reaffirmed)
	Cash Credit	Long Term	64.39	ACUITE BB \| Stable (Reaffirmed)
	Term Loan	Long Term	9.84	ACUITE BB \| Stable (Reaffirmed)
05 Aug 2022	Bank Guarantee (BLR)	Short Term	1.00	ACUITE A4+ (Upgraded from ACUITE A4)
	Proposed Long Term Bank Facility	Long Term	0.12	ACUITE BB \| Stable (Upgraded from ACUITE B+)
	Proposed Long Term Bank Facility	Long Term	0.68	ACUITE BB \| Stable (Assigned)
	Cash Credit	Long Term	2.08	ACUITE BB \| Stable (Upgraded from ACUITE B+)
	Cash Credit	Long Term	40.00	ACUITE BB \| Stable (Upgraded from ACUITE B+)
	Cash Credit	Long Term	47.92	ACUITE BB \| Stable (Assigned)
01 Nov 2021	Bank Guarantee/Letter of Guarantee	Short Term	1.00	ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
	Term Loan	Long Term	2.08	ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-)
	Cash Credit	Long Term	40.00	ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-)
	Proposed Long Term Bank Facility	Long Term	0.12	ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-)

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.	50.00	Simple	ACUITE BB+ \| Stable \| Upgraded ( from ACUITE BB )
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	22.05	Simple	ACUITE BB+ \| Stable \| Upgraded ( from ACUITE BB )
Not Applicable	Not avl. / Not appl.	Proposed Short Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	17.57	Simple	ACUITE A4+ \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Working Capital Term Loan	15 Dec 2023	Not avl. / Not appl.	15 Nov 2026	2.18	Simple	ACUITE BB+ \| Stable \| Upgraded ( from ACUITE BB )

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Shubham Jain
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.