Press Release October 10, 2024 STANDARD PUBLICITY PRIVATE LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	9.65	ACUITE BB | Stable | Reaffirmed	-
Bank Loan Ratings	0.18	-	ACUITE A4+ | Reaffirmed
Total Outstanding	9.83	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has reaffirmed its long-term rating to ‘ACUITE BB’ (read as ACUITE double B) and its short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.9.83 Cr. bank facilities of Standard Publicity Private Limited (SPPL). The outlook remains 'Stable'. Rationale for rating The rating reaffirmation considers the long track record of operations business risk profile is backed by a steady scale of operations as the revenue from operations of the company stood at Rs.19.75 crore in FY23 as compared to Rs. 15.29 crore in FY22. Further, the company has achieved revenues of Rs.20.10 crore in FY24 (Provisional). The Company has an average financial risk profile which is marked by improving net worth, comfortable gearing levels, and moderate debt protection metrics. The working capital cycle of the company continues to remain high marked by high Gross Current Asset (GCA) days of 415 days in FY2024 (Provisional) as compared to 519 days in FY23. The stretched liquidity position of the company is marked by small but steady cash accruals of Rs. 1.14 Cr. against a long-term debt repayment of Rs.0.47 Cr. over the same period and high bank limit utilisation. the rating is further constrained by pressure on profitability which remains vulnerable to newsprint prices, increasing competition from digital media and significant dependence on advertisement revenue.

About the Company

­Incorporated in 1987, Standard Publicity Private Limited (SPPL) is managed by Mr. Asim Kumar Sarkar and Mr. Kalyaneswar Sarkar. SPPL is a Kolkata based company engaged into advertising, marketing and promoting. It also has branch offices in Delhi, Guwahati, Bhubaneswar, and Shillong.   The company provides all the media and advertisement related services to its clients through various media like Newspaper ads, Posters,Billboards ,Hoardings ,Videos for tele ads,Tele marketing,Digital advertisements.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone financial and business risk profile of Standard Publicity Private Limited (SPPL).­

Key Rating Drivers

Strengths

Long track record of operations and experienced management  SPPL has been in operations since 1987. The directors of SPPL, Mr. Asim Kumar Sarkar and Mr. Kalyaneswar Sarkar have more than three decades of experience in the advertisement and media industry. The extensive experience of the management has aided in establishing healthy relations with reputed clients such as National Aluminium Company (NALCO), Coal India Ltd, Damodar Valley Corporation (DVC), Income Tax Department, Kolkata Municipal Corporation (KMC), Calcutta University (CU), Kutchina (Bajoria Appliances), among others. Acuité believes that the vintage of the promoters and the long-standing operations will continue to benefit the company going forward. Steady scale of operations The revenue from operations of the company stood at Rs.19.75 crore in FY23 as compared to Rs. 15.29 crore in FY22. Further, the company has achieved revenues of Rs.20.10 crore in FY24 (Provisional). The increase in revenues is supported by the regular order flow and the timely execution of it. Despite improvement, the revenues of the company remained low on account of low order values over the years. However, in FY2024 the company is planning to add few new customers namely, NTPC, LIC, DBS BANK. The operating margin of the company increased to 6.29 per cent in FY24 (Provisional) from 4.50 per cent in FY2023. The increase in operating margin in FY24 (Provisional) is because the company has reduced its material costs. Going forward, the Company expects that the margin would remain at similar levels over the medium term. The PAT margin also increased marginally to 5.43% in FY24 (Provisional) as compared to 1.88% in FY23. The ROCE levels stood comfortable at 7.83% in FY24 (Provisional) as against 6.15 % in FY23. Acuité believes that the company’s ability to improve the scale of operations will be key monitorable. Average financial risk profile The average financial risk profile of the company marked by improving net worth, comfortable gearing levels, and moderate debt protection metrics. The company’s net worth of the company stood at Rs.14.35 crore as of March 2024 (Provisional) as against Rs. 13.50 crore as of March 31, 2023, due to low accretion of reserves. The gearing of the company stood below unity at 0.71 times as on March 31, 2024 (Provisional) as against 0.82 times as of March 31, 2023. The total outside liabilities/tangible net worth (TOL/TNW) stood at 1.21 times as of March 31, 2024 (provisional) as against 1.52 times as of March 31, 2023. The debt protection metrics of the company remained strong marked by Interest Coverage Ratio (ICR) at 2.87 times and Debt Service Coverage Ratio (DSCR) of 1.58 times in FY2024 (Provisional).

Weaknesses

Working Capital Intensive nature of operations The working capital management of the company is intensive in nature marked by improving but high Gross Current Asset (GCA) days of 415 days in FY2024 (Provisional) as compared to 519 days in FY23. The high GCA days are on account of the elongated debtor period of 293 days in FY2024 (Provisional) as against 348 days in FY2023. This is due to the extended credit period provided to both government companies and general customers. However, the inventory period stood nil due to no requirement of any inventory. The creditor days stood at 50 days in FY24 Provisional as compared to 102 days in FY23.  Acuité believes that the working capital cycle of SPPL will continue to remain intensive due to the prolonged collection mechanism. Profitability remains vulnerable to newsprint prices, increasing competition from digital media and significant dependence on advertisement revenue The main cost element for a newspaper company is the newsprint cost. Newsprint prices have been volatile, and it may not always be possible to pass on the increase to the customers through an increase in cover price or higher advertisement tariff. The newspaper publications are witnessing gradual slowdown in circulation and readership due to the increasing penetration of the digital medium, market saturation and changing media consumption habits. As digital penetration increases, the circulation volumes of newspapers may undergo significant changes. Major portion of the revenue comes from advertisement through print media. Furthermore, the operating margin of media houses remains vulnerable to economic downturns as advertisement revenue is linked to economic conditions.

Rating Sensitivities

Growth in revenue along with improvement in profitability margins Elongation of working capital cycle

Liquidity Position

Stretched

The stretched liquidity position of the company is marked by low cash accruals and high utilisation of the fund based limits. The fund-based bank limit stood at 90 percent over the six months ending July 2024. The net cash accruals stood at Rs. 1.14 crore in FY24 (Provisional) as against the long-term debt obligations of Rs. 0.47 crore over the same period. Further, the working capital management of the company is intensive in nature, marked by high Gross Current Assets (GCA) of 415 days in FY2024 (Provisional) as compared to 519 days in FY2023. However, the current ratio stood comfortably at 2.03 times as of March 31, 2024 (Provisional). The cash and bank balances of the company stood at Rs. 5.99 crore as of March 31, 2024 (Provisional). Acuité believes that the liquidity position of the company will remain stretched over the medium term owing to the high utilisation of the fund-based limits and the intensive working capital cycle

Outlook: Stable

­Acuité believes that the company’s outlook will remain ‘Stable’ over the medium term from its experienced management and established operations. The outlook may be revised to ‘Positive’ in case of growth in revenues and profitability while improving its financial risk profile. The outlook may be revised to ‘Negative’ in case of a steep decline in revenues and profitability or further deterioration in working capital management.

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Provisional)	FY 23 (Actual)
Operating Income	Rs. Cr.	20.10	19.75
PAT	Rs. Cr.	1.09	0.37
PAT Margin	(%)	5.43	1.88
Total Debt/Tangible Net Worth	Times	0.71	0.82
PBDIT/Interest	Times	2.87	1.60

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 • Service Sector: https://www.acuite.in/view-rating-criteria-50.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 08 Aug 2023 Secured Overdraft Long Term 3.41 ACUITE BB | Stable (Downgraded from ACUITE BB+ | Negative) Cash Credit Long Term 5.00 ACUITE BB | Stable (Downgraded from ACUITE BB+ | Negative) Covid Emergency Line. Long Term 1.24 ACUITE BB | Stable (Downgraded from ACUITE BB+ | Negative) Bank Guarantee (BLR) Short Term 0.18 ACUITE A4+ (Reaffirmed) 20 Jun 2022 Secured Overdraft Long Term 2.65 ACUITE BB+ | Negative (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BB+ | Negative (Reaffirmed) Proposed Long Term Bank Facility Long Term 2.00 ACUITE BB+ | Negative (Reaffirmed) Bank Guarantee (BLR) Short Term 0.18 ACUITE A4+ (Reaffirmed) 21 Jan 2022 Bank Guarantee/Letter of Guarantee Short Term 0.18 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Secured Overdraft Long Term 9.65 ACUITE BB+ (Reaffirmed & Issuer not co-operating*)

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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 Indian Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.18 Simple ACUITE A4+ | Reaffirmed Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 6.50 Simple ACUITE BB | Stable | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.15 Simple ACUITE BB | Stable | Reaffirmed

Contacts

Mohit Jain Senior Vice President - Rating Operations Abhishek Singh 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.