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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 10.00 | ACUITE A | Stable | Assigned | - |
| Bank Loan Ratings | 37.80 | ACUITE A | Stable | Reaffirmed | - |
| Total Outstanding | 47.80 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating at ‘ACUITE A’ (read as ACUITE A) on the Rs. 37.80 crore bank facilities of Sanspareils Greenlands Private Limited (SGPL). The outlook is ‘Stable’.
Acuité has assigned the long-term rating at ‘ACUITE A’ (read as ACUITE A) on the Rs. 10.00 crore bank facilities of Sanspareils Greenlands Private Limited (SGPL). The outlook is ‘Stable’. Rationale for reaffirmation Rating has been reaffirmed on account of improvement in scale of operations, profitability and healthy financial risk profile and reputed clientele. The rating gets comfort from experienced management, decades long relationships with few customers and reputed clientele has helped company to seize repeat orders. However, rating is constrained as highly competitive and fragmented industry. |
| About the Company |
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SGPL incorporated in the year 1979 and promoted by Mr. Kailash Chandra Anand, Mr. Puneet Anand, Mr. Paras Juny Anand and Mr. Triloknath Anand is engaged into manufacturing of cricket bats, leather balls, premium shoes, clothing, travel gear and other protective gears for cricket under its own “SG” brand. It has its manufacturing unit located in Meerut, UP.
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| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
| Acuite has taken standalone financial and business risk profile Sanspareils Greenlands Private Limited to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established market position
The promoters of SGPL, Mr. Kailash Chandra Anand, Mr. Triloknath Anand, Mr. Puneet Anand and Mr. Paras Juny Anand are seasoned players in the said industry and with an operational track record of more than four decades, company has been able to maintain strong relations with its customers and suppliers. Furthermore, SGPL has a competitive advantage in the domestic market since it is the only domestic cricket goods manufacturing company, whose red balls used in test matches are approved by the Board of Control for Cricket in India (BCCI). The company also manufactures leather balls, bats, protective equipment, cricket accessories, shoes and apparels under its own "SG" brand, thereby maintaining a diversified product portfolio. Acuité believes that the promoters' extensive experience and healthy relations with its customers and suppliers will continue to benefit SGPL over the medium term. Financial Risk Profile The company financial risk profile is comfortable marked by healthy net worth, comfortable gearing and strong debt protection metrics. Company’s tangible net worth stood at Rs. 91.29 Cr. in FY 2023 as against Rs. 78.34 Cr. in FY 22. Net worth of the company also includes Rs. 6.15 Cr. of unsecured loans classified as quasi equity which has been subordinated to bank debts of Standard Chartered Bank. The gearing ratio (Debt to Equity) deteriorated, however remained below unity and stood at 0.30 times in FY 2023 as against 0.27 times in FY 2022. TOL/TNW deteriorated from 0.86 times in FY 2022 to 1.06 times in FY 2023. Debt Protection Matrix (i.e. DSCR & ISCR) stood at 6.80 times & 9.84 times in FY 23 against 7.41 times & 9.12 times in FY 22 respectively. In the absence of any major debt funded capex, it is believed the financial risk profile will remain comfortable in the near term. Improving Scale of Operations & Profitability The revenue from operations improved by 26.73%, thereby increasing the topline from Rs. 213.80 Cr. in FY 22 to Rs. 270.96 Cr. in FY 23. With improving turnover, the company’s profitability has been improved marginally. The EBIDTA and PAT has been improved from Rs. 21.35 Cr. & Rs. 13.44 Cr. in FY 22 to Rs. 26.61 Cr. & Rs. 16.40 Cr. in FY 23 respectively. EBIDTA & PAT margin stood at 9.82% & 6.05% respectively in FY 23. The revenue is expected to improve as advertising sponsorships driven by on boarding of prominent cricket players as brand endorsers. Reputed Clientele SGPL has a reputed customer base which includes Kookaburra Sports, JRT Crampton, Board of Control for Cricket India (BCCI) and Unicorn Products Limited, to name a few. It has established relationships with these customers around four decades, which helps it to benefit from repeat orders. Acuité believes that SGPL will sustain the business risk profile on account of its established market presence in the industry |
| Weaknesses |
| Highly competitive and fragmented industry
The sports goods industry is highly competitive and fragmented. Acuité believes that despite a highly competitive market, SGPL will be able to maintain its presence in the domestic market, mainly on account of its long presence in cricket gear manufacturing and recognition by the technical committee of Board of Control for Cricket India (BCCI). |
| Rating Sensitivities |
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| Liquidity Position |
| Strong |
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The Company has strong liquidity position marked by generating net cash accruals of Rs. 19.66 Cr. in FY 23 against current portion of long term debt (CPLTD) of Rs. 0.41 Cr. for the same period. The company has cash & bank position stood at Rs. 6.87 Cr. and current ratio stood at 1.32 times for FY 23 . Company has made Rs. 27.39 Cr. investment in fixed deposits in PNB Housing Finance Limited which is entirely unencumbered. Apart from this company has also invested Rs. 5.45 Cr. in mutual funds as on 31st March 2023. The average bank limit utilization for fund based limits remained at 64.88% for the 14 months’ period between January 2023 to February 2024.
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| Outlook - Stable |
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Acuité believes that SGPL will maintain a ‘Stable’ outlook in near to medium term on account of its experienced management and improving operating performance. The outlook may be revised to 'Positive' if the company is able to achieve higher than expected growth in revenue while effectively managing its working capital cycle and keeping the debt levels moderate. Conversely, the outlook may be revised to negative in case of moderation in liquidity profile and its profitability margins, and deterioration in debt protection indicators.
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 270.96 | 213.80 |
| PAT | Rs. Cr. | 16.40 | 13.44 |
| PAT Margin | (%) | 6.05 | 6.28 |
| Total Debt/Tangible Net Worth | Times | 0.30 | 0.27 |
| PBDIT/Interest | Times | 9.84 | 9.12 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Any other information |
| None. |
| Applicable Criteria |
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• 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 |
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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.
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