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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 31.00 | ACUITE A- | Stable | Assigned | - |
| Bank Loan Ratings | 87.12 | ACUITE A- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 12.91 | - | ACUITE A2+ | Reaffirmed |
| Total Outstanding | 131.03 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating to ‘ACUITE A-’ (read as ACUITE A minus) and short-term rating to ‘ACUITE A2+’ (read as ACUITE A two plus) on the Rs. 100.03 crore of bank facilities of Shri Maa Polyfabs Limited (SMPL). The outlook is ‘Stable’.
Acuité has assigned the long-term rating to ‘ACUITE A-’ (read as ACUITE A minus) on the Rs. 31.00 crore of bank facilities of Shri Maa Polyfabs Limited (SMPL). The outlook is ‘Stable’. Rationale for Rating
The rating takes into consideration the experienced management, diversified product range supported by track record of the group. The financial risk profile of the group is moderate marked by healthy adjusted net worth, moderate adjusted gearing and comfortable debt protection metrics. The aforesaid factors are offset by the working capital-intensive nature of operation and susceptibility of profits to raw material price fluctuations.
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| About the Company |
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Shri Maa Polyfabs Limited was incorporated in 2005 by Mr. Sajjan Bansal and Mr. Rakesh Kumar Sharma. The company is engaged in manufacturing of bulk packaging material such as woven sacks, fabrics and leno bags made of polypropylene (PP) and high-density polypropylene (HDPE). Currently the company has installed capacity of 16100 MTPA and working at ~99% capacity in the FY24(Prov). The company is also a delcredere agent for Brahmaputra Cracker and Polymer limited (rated ACUITE AA+/Stable/A1+). The registered office of the company is in Kolkata.
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| About the Group |
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Manhar Polymers Private Limited was incorporated in 2017 by Mr. Sajjan Bansal and Mr. Rakesh Kumar Sharma and started its commercial operation form June 2020 onwards. The company is engaged in manufacturing polypropylene (PP) and high-density polypropylene (HDPE) bags and fabrics. The company has its manufacturing facility located in Asansol, West Bengal with an installed capacity of 7200 MTPA and working at ~76% capacity in the FY24(Prov).
Hariom Polypacks Limited was incorporated in 2010 by Mr. Sajjan Bansal and Mr. Rakesh Kumar Sharma. The company is engaged in manufacturing non-woven sacks and fabrics. The company has its manufacturing facility located in Asansol, West Bengal with an installed capacity of 7705 MTPA and working at ~86% capacity in the FY24(Prov). Shri Dakshineshwari Maa Polyfabs Limited was incorporated in 2016 by Mr. Sajjan Bansal and Mr. Rakesh Kumar Sharma. The company is engaged in manufacturing of printed plastic bags, Leno bags, Cement bags and Adprotex Bags made of polypropylene (PP) and high density polypropylene (HDPE). The company has its manufacturing facility located in Hooghly, West Bengal with an installed capacity of 19500 MTPA and working at ~97% capacity in the FY24(Prov). |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has considered the consolidated financial and business risk profile of Shri Maa Polyfabs Limited (SMPL), Hariom Polypacks Limited (HPPL), Shri Dakshineshwari Maa Polyfabs Limited (SDMPL) and Manhar Polymers Private Limited (MPPL). The same is on account of common management, same line of operations and significant operational and financial linkages. The group is herein being referred to as Shri Maa Group. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established track record of operations
Shri Maa group was established in the year 2002 by Mr. Sajjan Bansal and Mr. Rajesh Kumar Sharma. The promoters of the group have more than two decades of experience in the plastic and packaging industry. The extensive experience of the management has helped the group establish long-term relations with suppliers resulting in direct procurement of polypropylene from Haldia Petrochemical Limited (HPCL), Reliance Industries Limited (RIL), and Indian Oil Corporation Limited (IOCL) among others. Moreover, their experience has also helped in building healthy customer relations with reputed customers in cement industry such as Birla Corporation Limited, Reliance Retail Limited, India Cement Limited, JSW Cement Limited, and among others in the eastern part of the country. Acuité believes that the group will continue to benefit from long experience of the management in establishing relations with their key suppliers and customers. Improvement in scale of operations and profitability The revenue of the group stood healthy at Rs.728.26 crore in FY2024(Prov) as compared to Rs.699.40 crore in the FY 2023 and Rs 649.13 crore in FY22. This increase in revenue of the group during FY2024 is on account of increase in volumes sales, despite a decline in price realization. Operating margin of the group has moderated to 9.18 percent in FY2024(Prov) as compared to 8.99 percent in the FY 2023 and 13.5 per cent in FY2022. During and post covid many small players in the industry had to shut down their business to meet the high working cycle demand, supply chain and labour issues. To fulfil the demand, cement companies were providing the incentives and premium for timely and bulky delivery and group was getting the advantage of the same. The company had also undertaken opportunistic manufacturing of PPE kits which led to high margin during that period. Likewise net profitability margin of the group has also improved to 2.53 percent in FY2024 (Prov) as compared to 1.88 percent in FY2023 and 3.60 percent in FY2022. Based on that margins were reflected on higher side. Acuité believes the profitability margin of the group will be sustained at current levels over the medium term on account of well-established position in the eastern market, steady demand for PP bags mainly from the cement industries along with capacity additions and backward integration in FY25. Moderate financial risk profile The financial risk profile of the group is marked by healthy adjusted net worth, moderate gearing and comfortable debt protection metrics. The adjusted net worth of the group stood healthy at Rs.263.82 crore in FY 2024(Prov) as against Rs 227.45 crore in FY2023 and Rs 200.46 Cr. in FY22. This improvement in networth is mainly due to the retention of current year profit, increase in share capital, increase in security premium. Acuite has also considered Rs.25.39 crore of unsecured loan as quasi capital as the same amount is subordinated with the bank debt. The adjusted gearing of the group stood moderate at 1.16 times in FY24(Prov) as against 1.39 times in FY23 and 1.35 times in FY22. This improvement in overall gearing is on account of increase in networth during the period. However, Interest coverage ratio (ICR) has moderated and stood at 2.77 times in FY2024(Prov) as against 2.39 times in FY 2023 and 4.07 times in FY2022 mainly because increase in the usage of bank limit utilisation led to increase in interest cost of the group and the same had improved in the FY24 as compared to FY23. Even the debt service coverage ratio (DSCR) of the company is decline and stood at 1.30 times in FY2024(Prov) as against 1.37 times in the FY2023 and 1.94 times in the FY 2022. The net cash accruals to total debt (NCA/TD) also moderated at 0.13 times in FY2024(Prov) as against 0.11 times in the FY 2023 and 0.22 times in the FY 2022. Going forward, Acuite believes the financial risk profile of the group will remain at similar levels on account of steady net cash accruals over the near term and absence of any major capex plan over the medium future. |
| Weaknesses |
| Working capital intensive nature of operation The working capital intensive nature of operation of the group is marked by high gross current asset (GCA) days of 194 days as on 31st March 2024(Prov) and as compared to 196 days as on 31st March 2023 and 166 days as on 31st March 2022. These high gross current asset (GCA) days are mainly on account of high other current asset of Rs.80.45 crore during 31st March 2024(Prov) which mainly consists of statutory deposits, other receivables, and other current assets. However, the inventory holding period of the group stood moderate at 70 days in FY2024(Prov) as compared to 68 days in the FY 2023 and 69 days in the FY 2022. The collection period of the group is also stood moderate at 83 days during 31st March 2024(Prov) as compared to 92 days in the FY 2023 and 73 days in the FY 22. The creditors holding period of the group improved and stood at 32 days in FY2024(Prov) as compared to 43 days in the FY 2023 and 28 days in the FY 2022. The group has utilized ~86 per cent of its working capital limit facility for the last six months ended March 2024. Acuité believes any significant deviation in working capital management would be a key rating sensitivity factor. Susceptibility of profitability margins to fluctuations in prices of raw material and competitive and fragmented nature of operations The basic raw materials required by the group are plastic granules which is crude oil derivative. The prices of the commodities are subject to volatility in line with those of global crude oil prices. Further, the group is operating in competitive and fragmented nature of industry. There are several players engaged in the Plastic Packaging industry in organized and unorganized sector. Hence, the group might face pricing pressure from other competitors. Therefore, having an established brand name is of utmost importance in this industry along with continuous addition of value-added products in the product offerings. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The group has adequate liquidity marked by healthy net cash accruals of Rs 39.95 crore as against Rs 24.93 crore long term debt obligations in FY2024. The current ratio of the group stood comfortable at 1.38 times in FY2024(Prov) as against 1.27 times in FY2023 and 1.43 times in FY 2022. The working capital-cycle of the group is intensive marked by Gross Current Asset (GCA) days of 194 days in FY2024(Prov) as against 196 days in FY2023 and 166 days in FY 2022. The bank limit of the group has been ~86 percent utilized during the last six months ended in March 2024. The promoters have the flexibility to infuse funds in business as an when need basis as is evident from unsecured loans of Rs. 25.39 Cr. as on March 2024. Acuité believes that the liquidity of the group is likely to remain adequate over the medium term on account of healthy cash accruals against long debt repayments over the medium term.
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| Outlook: Stable |
| Acuité believes that Shri Maa Group will maintain a 'Stable' outlook over the medium term owing to its promoters’ extensive experience in the industry and longstanding relations with clientele. |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Provisional) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 728.26 | 699.40 |
| PAT | Rs. Cr. | 18.44 | 13.12 |
| PAT Margin | (%) | 2.53 | 1.88 |
| Total Debt/Tangible Net Worth | Times | 1.16 | 1.39 |
| PBDIT/Interest | Times | 2.77 | 2.39 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any Other Information |
| None |
| Applicable Criteria |
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• 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 • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||
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