Press Release November 27, 2024 SENDOZ COMMERCIALS PRIVATE LIMITED Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	5.00	ACUITE BBB+ | Stable | Assigned	-
Bank Loan Ratings	42.75	ACUITE BBB+ | Stable | Reaffirmed	-
Bank Loan Ratings	20.00	-	ACUITE A2+ | Assigned
Bank Loan Ratings	26.50	-	ACUITE A2+ | Reaffirmed
Total Outstanding	94.25	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­Acuité has reaffirmed its long-term rating at ‘ACUITE BBB+’ (read as ACUITE triple B plus) and the short-term rating at ‘ACUITE A2+’ (read as ACUITE A two plus) on the Rs. 69.25 Cr. bank facilities of Sendoz Commercials Private Limited (SCPL). The outlook is 'Stable'. Further,­Acuité has assigned its long-term rating of ‘ACUITE BBB+’ (read as ACUITE triple B plus) and the short-term rating of ‘ACUITE A2+’ (read as ACUITE A two plus) on the Rs. 25.00 Cr. bank facilities of Sendoz Commercials Private Limited (SCPL). The outlook is 'Stable'. Rationale for rating reaffirmation The rating reaffirmation factors in the group’s established track record of operations of over two decades in the industry and long-standing experience of its management. However, the operating and financial performance moderated in FY2024 primarily on account of  lower price realisations coupled with lower volumes. The revenue of the group declined to Rs. 754.45 Cr. in FY2024 from Rs 968.24 Cr. in FY2023. However, it has recorded revenue of ~Rs. 372.29 Cr. in H1FY25 as compared to Rs. 308.06 Cr. in H1FY24. Further, it has  orders in hand of ~ Rs. 755.25 Cr. as of September 2024, which is expected to be executed by the end of FY2025, reflecting growth in scale of operations in the near term. Further, the rating considers the moderation in the financial risk profile in FY2024, which is expected to improve in the near to medium term on account of gradual repayment of existing debt obligations and no major debt funded capex plans. The rating also considers the adequate liquidity profile supported by its moderately utilized fund-based bank limits and  moderate cash accruals. However, the rating remains constrained on account of intensive working capital cycle and the group's presence in a regulated industry.

About the Company

­Incorporated in 1999 and based in Kolkata, Sendoz Commercials Private Limited (SCPL) is engaged in trading of coal apart from providing transportation, logistics and liaising work for companies with coal linkage.

About the Group

­­Incorporated in 1994, Sendoz Impex Limited (SIL) is based in Kolkata and managed by Mr. Anurag Poddar and Mr. Siddharth Poddar. The company is primarily engaged in the trading of coal. Apart from this, SIL is also involved in coal transportation and logistics services.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­­Acuité has consolidated the business and financial risk profiles of Sendoz Commercials Private Limited (SCPL) and Sendoz Impex Limited (SIL), together referred to as the ‘Sendoz Group’ (SG). The consolidation is in view of the common management, strong operational linkages between the entities and similar line of business.

Key Rating Drivers

Strengths

Established relationship with customers aided by the experienced management The group has a long track record of operations of more than two decades and is supported by the extensive experience of the director, Mr. Laxman Poddar, who possess more than five decades of industry expertise. With the promoters’ support, the group has established healthy relationships with the customers and suppliers. Acuité believes that the group’s long presence in the industry and the experience of the management will continue to support the growth plans going forward over the medium term. Moderation in operating performance in FY2024 while recovery recorded in H1FY2025 In FY2024, the group's revenue decreased to Rs. 754.45 Cr, down from Rs. 968.24 Cr. in FY2023. This decline is mainly attributed to a correction in coal prices, which had been elevated in FY2023. In H1FY25, the group reported a revenue of approximately Rs. 372.29 Cr. Further, the operating margin for FY2024 stood at 6.65%, slightly lower than the 7.74% recorded in FY2023. This reduction in operating margin was due to lower coal price realizations in FY2024. During FY2023, coal prices surged due to supply shortages caused by the Russia-Ukraine war, creating a demand-supply imbalance. This led to an exceptional performance in both revenue and margins in FY2023, driven by higher coal prices. Additionally, the Profit After Tax (PAT) margin declined to 2.96% in FY2024, compared to 4.50% in FY2023, primarily due to higher finance costs during the year. Acuité expects that the group's operations will improve in the medium term, supported by steady coal demand in the market. Moderate financial risk profile The group’s financial risk profile is moderate marked by improvement in the networth base, comfortable gearing and moderate debt protection metrics. The tangible net worth of the group increased to Rs.339.43 Cr. as on March 31, 2024 from Rs.317.24 Cr. as on March 31, 2023 due to accretion of reserves. The total debt of the group stood at Rs.138.26 Cr. as on March 31, 2024 as against Rs.109.61 Cr. as on March 31, 2023. The debt profile of the group comprises of Rs. 10.77 Cr. of long-term debt , Rs. 85.99 Cr. of short-term debt, and Rs. 41.50 Cr. of unsecured loans. The gearing of the group stood low at 0.41times as on March 31, 2024 as compared to 0.35 times as on March 31, 2023. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) of the group stood at 1.04 times as on March 31, 2024 as against 1.05 times as on March 31, 2023. Further, the debt protection metrics of the group stood moderate reflected by debt service coverage ratio of 1.64 times for FY24 as against 2.41 times for FY23. The interest coverage ratio stood at 2.48 times for FY24 as against 4.54 times for FY23. Net Cash Accruals/Total Debt (NCA/TD) stood at 0.17 times as on March 31, 2024 as compared to 0.41 times in the previous year. Acuité believes that, going forward, the financial risk profile of the group will improve and remain moderate over the medium term in the absence of major debt funded capex plan.

Weaknesses

Working capital intensive nature of operations  The working capital management of the group is intensive in nature marked by high Gross Current Assets (GCA) of 239 days in FY2024 as compared to 171 days in FY2023. The high GCA days are primarily on account of elevated inventory levels, increased debtor days and high other current assets, mainly comprising of significant advances given to suppliers, loans and advances to others and balances with statutory authorities. The inventory holding period extended to 49 days in FY2024 as compared to 27 days in FY2023. The debtor days have increased significantly to 97 days in FY2024 as against 54 days in FY2023. The majority of the customers are governmental entities. Further, the creditor days stood at 59 days in FY2024 as compared to 51 days in FY2023. Acuité believes that the working capital operations of the group will remain at similar levels given the nature of the industry over the medium term. Presence in a regulated industry Coal traded and transported by the Sendoz group find their end use by companies involved in power generation, manufacturing of cement and iron & steel. The consumers that Sendoz group caters to are under high regulation from the government. Also there are many suppliers in the coal industry catering to these end user segments. Any policy changes affecting the highly regulated coal industry or its end users will impact the financial risk profile of Sendoz group. Acuite believes the ability of Sendoz group to grow in such conditions and maintain its profitability will be key monitorable in the future.

Rating Sensitivities

??????Sustaining the growth in scale of operations and profitability margins. Sustenance of the capital structure. Elongation in the working capital cycle.

Liquidity Position

Adequate

The group’s liquidity position is adequate marked by generation of sufficient net cash accruals of Rs.23.32 Cr. in FY2024 as against its maturing debt obligations of Rs. 5.88 Cr. in the same tenure. In addition, it is expected to generate sufficient cash accrual in the range of Rs.34.20 – Rs.39.93 Cr. against its maturing repayment obligations in the range of Rs. 5.07- Rs.2.54 Cr. over the medium term. The cash and bank balances of the group stood at Rs. 0.62 Cr as on March 31, 2024.The current ratio stood comfortable at 1.73 times as on March 31, 2024 as compared to 1.62 times as on March 31, 2023. Further, the working capital management of the group is intensive in nature marked by Gross Current Assets (GCA) of 239 days as on 31st March 2024, however, the reliance on working capital limits remained moderate with average utilisation of fund-based limits at ~66.75% over the past five months ending July 2024, and non-fund based limit utilisation at ~90.51% during the same period. Acuité believes that going forward the group will maintain adequate liquidity position owing to steady accruals.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	754.45	968.24
PAT	Rs. Cr.	22.31	43.60
PAT Margin	(%)	2.96	4.50
Total Debt/Tangible Net Worth	Times	0.41	0.35
PBDIT/Interest	Times	2.48	4.54

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Any Other Information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.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 20 Nov 2023 Bank Guarantee (BLR) Short Term 14.50 ACUITE A2+ (Reaffirmed) Bank Guarantee (BLR) Short Term 12.00 ACUITE A2+ (Assigned) Cash Credit Long Term 9.75 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 18.25 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 13.00 ACUITE BBB+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 1.75 ACUITE BBB+ | Stable (Assigned) 09 Oct 2023 Bank Guarantee (BLR) Short Term 14.50 ACUITE A2+ (Upgraded from ACUITE A2) Cash Credit Long Term 9.75 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 13.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) 02 Aug 2022 Letter of Credit Short Term 7.00 ACUITE A2 (Reaffirmed) Cash Credit Long Term 23.00 ACUITE BBB | Stable (Reaffirmed) Covid Emergency Line. Long Term 7.25 ACUITE BBB | Stable (Assigned) 08 Jul 2022 Letter of Credit Short Term 7.00 ACUITE A2 (Reaffirmed) Cash Credit Long Term 23.00 ACUITE BBB | Stable (Reaffirmed) 30 Jun 2022 Letter of Credit Short Term 7.00 ACUITE A2 (Upgraded from ACUITE A4+) Cash Credit Long Term 23.00 ACUITE BBB | Stable (Upgraded from ACUITE BB) 28 Jul 2021 Letter of Credit Short Term 7.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 23.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating ICICI Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 14.50 Simple ACUITE A2+ | Reaffirmed HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A2+ | Reaffirmed Yes Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A2+ | Assigned HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 28.00 Simple ACUITE BBB+ | Stable | Reaffirmed ICICI Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 13.00 Simple ACUITE BBB+ | Stable | Reaffirmed Yes Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE BBB+ | Stable | Assigned Yes Bank Ltd Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A2+ | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.75 Simple ACUITE BBB+ | Stable | Reaffirmed

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

­ Sr.No Company Name 1 Sendoz Impex Limited 2 Sendoz Commercials Private Limited

Contacts

Mohit Jain Senior Vice President - Rating Operations Kirti Berlia 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.