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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 148.27 | ACUITE BBB | Positive | Reaffirmed | Stable to Positive | - |
| Total Outstanding Quantum (Rs. Cr) | 148.27 | - | - |
| Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs.148.27 crore bank facilities of STONEX INDIA PRIVATE LIMITED. The outlook revised from ‘Stable’ to ‘Positive’.
Rationale for Reaffirmation and revision in outlook Acuite factors in experienced management, Improvement in Business, Healthy financial risk profile and adequate liquidity profile of the company The revenue from operations of the company witnessed substantial improvement to Rs. 440.10 crore in FY2023 as against Rs. 336.34 crore in FY2022. Improvement in revenue is on account of increase in price and Volume sale. Likewise The operating profit margin of the company improved to 17.20 percent in FY2023 as against 9.93 percent in FY2022 on account of price increase, better product mix and scale of operations. Similarly, PAT Margin improved & stood at 8.71 Percent in FY 2023 as against 2.20 percent in FY 2022. Coupled to this coverage indicators improved in FY 23. Acuité believes that the company will grow its scale of operations in the volume terms and improve profitability while maintaining a healthy capital structure. |
| About the Company |
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Stonex India Private Limited is Delhi based company incorporated in 2007. The company is engaged in manufacturing of marbles, marble blocks, semi-precious stones, etc. It is promoted by Mr. Gaurav Aggarwal, Mr. Saurav Aggarwal and Mr.Vikas Aggarwal. Stonex India Private Limited has manufacturing unit at Kishangarh, Ajmer with current installed capacity of 1 crore sqft pa. Company currently under process to incease the installed capacity to ~1.90 crore Sqft pa. coupled to this one experience centre is being constrcuted at Peeragarhi (New Delhi) Location. Estimated capital expenditure for FY 24 is Rs~83 crore and For FY 25 is Rs ~58 crore.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of Stonex India Private Limited to arrive at this rating. |
Key Rating Drivers
| Strengths |
| Experienced management
The Directors of the company has vast experience in the aforementioned line of business. Their experience into this line of business would help the company to flourish. Acuite believes that Stonex India Private Limited. will continue to benefit from its operations and excellence. Business risk profile-Improved SIPL’s operation witnessed substantial improvement which is apparent from growth in revenue from operations by ~31% in FY2023 to Rs 440.10 crore as against Rs. 336.34 crore for FY2022 (~72 percent from FY 21 to FY 23). The operating profit margin of the company increased by 727 bps in FY 23. Operating Profit Margin of company stood at 17.20% in FY2023 as against 9.93% in FY2022 likewise the net profit margin of the company jumped by 651 bps and stood at 8.71 percent in FY2023 as against 2.20 percent in FY 22. ROCE of the company stood at 24.85 times in FY2023. Financial Risk Profile- Healthy Company has healthy financial risk profile marked by strong net worth, moderate gearing and comfortable coverage indicators. The Total Tangible net worth stood at Rs. 133.09 Cr as on 31st March 2023 as against Rs. 94.49 Cr a year earlier. Increase in net worth is on account of Profit accretion.Company follows moderate leverage policy marked by its average gearing of last three years (Average gearing 1.53). Debt to Equity ratio improved and stood at 1.22 times in FY 2023 as against 1.47 times in FY 22. Improvement in gearing is on account of increase in Net Worth. Gearing is expected to improve in near medium term. Interest coverage ratio grew by 272 bps and stood strong at 5.31 times for FY2023 as against 2.58 times in FY2022. Improvement in Interest coverage ratio is on account of improved operating margin and higher operating income in FY 23 in comparison to FY 22. Likewise, Debt Service coverage ratio increased by 148 bps and stood comfortable 2.72 times for FY2023 as against 1.24 times in FY2022. |
| Weaknesses |
| Working capital operations- Improved yet Intensive
Company has improved yet intensive working capital requirements as evident from gross current assets (GCA) of 231 days in FY2023 as compared to 234 days in FY2022. Intensiveness of Working capital is on account of High Inventory Days. Inventory days stood at 213 days in FY 23 (178 days in FY22). Debtor days stood at 38 days in FY2023 as against 52 days in FY 22. |
| Rating Sensitivities |
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Improvement in Operating Income as envisaged Company’s ability to maintain the existing profitability or improve upon it. Significant Improvement in working capital management of the company resulting into improved liquidity. Completion of Experience Centre in current fiscal |
| All Covenants |
| Not Available |
| Liquidity Position |
| Adequate |
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Company has adequate liquidity marked by net cash accruals to its maturing debt obligations, current ratio, cash and bank balance. Company generated cash accruals of Rs. 48.49 crore for FY2023 as against obligations of Rs. 8.82 crore for the same period. Current Ratio stood at 1.42 times as on 31 March 2023 as against 1.31 times in the previous year. Working capital limits are utilized at ~83 per cent during the last twelve months ended August 23 leaving additional cushion in working capital limits to meet contingencies. Cash and Bank Balances of company stood at Rs 1.04 crore. Further company has fixed deposits of Rs 1.60 crore(unencumbered Rs ~1 crore) as on March 31, 2023.In addition to this SBI has sanction cash credit limit of Rs 40 crore in July 23 which will result result in lower bank limit utilization.
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| Outlook:Positive |
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Acuité believes that SIPL will continue to benefit over the medium term due to its “established market position and established relations with its customers, moderate financial risk profile and will benefit over the medium term from its promoters extensive industry experience. The rating may further be upgraded in case of sustainable growth in revenues as envisaged while maintaining its profitability at existing level or improving upon it alongwith completetion of Exeperience center in current fiscal. Conversely, the outlook may be revised to 'Stable' if company fails to acheive the projected revenue or profitability or any further delay in capex also any stretch in the working capital cycle impacting the liquidity wil, have negative bias.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 440.10 | 336.34 |
| PAT | Rs. Cr. | 38.35 | 7.41 |
| PAT Margin | (%) | 8.71 | 2.20 |
| Total Debt/Tangible Net Worth | Times | 1.22 | 1.47 |
| PBDIT/Interest | Times | 5.31 | 2.58 |
| 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 • Entities In Manufacturing Sector:- https://www.acuite.in/view-rating-criteria-59.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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