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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 5.00 | ACUITE BB- | Stable | Assigned | - |
| Bank Loan Ratings | 7.00 | ACUITE BB- | Stable | Upgraded | - |
| Bank Loan Ratings | 3.00 | - | ACUITE A4 | Reaffirmed |
| Total Outstanding | 15.00 | - | - |
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Rating Rationale |
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Acuite has upgraded its long-term rating to 'ACUITE BB-' (read as ACUITE double B minus) from ‘ACUITE B+ (read as ACUITE B plus) and reaffirmed the short-term rating of ‘ACUITE A4’ (read as ACUITE A four) on the Rs. 10.00 crore bank facilities and assigned the long term rating of 'ACUITE BB-' (read as ACUITE double B minus) on the Rs.5.00 crore bank facilities of Subtleweigh Electric India Private Limited. The outlook remains ‘Stable’.
Rationale for the rating The rating takes into account the improvement in operating and financial performance of the company marked by improvement in operating income, operating profitability and financial risk profile. The operating income of the company improved to Rs.85.25 Cr in FY2023 as against Rs.62.05 Cr in FY2022 and Rs. 43.97 Cr in FY2021. The operating profitability stood at 6.54 percent in FY2023 as against 5.36 percent in FY2022 and 5.13 percent in FY2021. The overall gearing which stood at 2.14 times as on March 31, 2021 improved to 1.56 times as on March 31, 2023. These strengths are, however, partly offset by its working capital intensive operations. Going forward, the company’s ability to improve its scale of operations and maintaining its profitability and capital structure and restricting elongation of working capital cycle will remain key rating sensitivities. |
| About the Company |
| Incorporated in the year of 2003 Subtleweigh Electric India Private Limited is a Kolkata based company and is engaged in providing industrial automation solutions. It has its registered office located at West Bengal. Mr. Krishna Baigpant and Mr. Mirza Jawed Baig are directors of the company. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has taken a standalone view of the business and financial risk profile of SEIPL to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management and long track record of operation:
The company has a long track record of over a decade in industrial automation industry. The long track record has helped the company to establish a healthy relationship with customers and suppliers. The directors of the company, Mr. Krishna Baigpant and Mr. Mirza Jawed Baig, also have more than a decade experience in the industrial automation industry. Acuité believes the company will continue to benefit from experienced promoters that will help to maintain long term relations with clients. Average financial risk profile The financial risk profile of the company is average marked by moderate net worth, gearing and comfortable debt protection metrics. The net worth stood Rs.8.18 Cr as on Mach 31, 2023 as against Rs.4.96 Cr as on March 31, 2022. The improvement in networth is driven by accrual of profit to reserves. The gearing (debt-equity) stood at 1.56 times as on FY2023 as against 1.97 times as on FY2022. The total debt of Rs.12.74 Cr as on FY2023 consists of long-term of Rs.3.83 Cr. and short term of Rs.8.23 Cr. of bank borrowings and USL of Rs.0.68 Cr. The interest coverage ratio stood at 5.70 times for FY2023 as against 4.12 times for FY2022. The Net Cash Accruals to Total debt stood at 0.32 times for FY2023 as against 0.21 times for FY2022. The Total outside liabilities to Tangible net worth stood high at 5.51 times for FY2023 as against 7.43 times in FY2022. |
| Weaknesses |
| Working capital management intensive in nature
The working capital management of the company remained intensive marked by high Gross Current Assets (GCA) of 188 days for FY2023 as compared to 207 days as on FY2022. The debtor period stood at 58 days for FY2023. Further, the inventory holding stood at 91 days for FY2023 as against 104 days for FY2022. The creditor days stood at 100 for FY2023 as against 137 for FY2022. The average bank limit utilisation of non-fund based facitlies stood at 69 percent for seven months ended November, 2023. . The working capital cycle of the Company is expected to remain at similar levels over the medium term. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The company has an adequate liquidity profile as reflected from its adequate net cash accruals against repayment obligations. The company generate net cash accruals of Rs. 4.05 Cr in FY2023 against repayment obligations of Rs. 0.68 Cr. The net cash accruals are estimated to range between Rs. 5-7.5 Cr against repayment obligations of Rs.0.68 Cr. The gross current asset days of the company stood at 188 days in FY2023. The bank limit utilisation of non-based facitlies by the company stood at 69.00% for the seven months ended November,2023. Current ratio stood modest at 1.17 times in FY2023.
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| Outlook: Stable |
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Acuité believes that SEIPL's outlook will remain ‘Stable’ over the medium term driven by its experienced management, the long standing operations of the company and average financial risk profile. The outlook may be revised to 'Positive' in case of higher-than-expected growth in revenues and profitability margins while improving their financial risk profile and liquidity profile. The outlook may be revised to 'Negative' in case of steep decline in revenues and profitability or higher than envisaged debt funded capex or deteriorating financial risk profile and liquidity position.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 85.25 | 62.05 |
| PAT | Rs. Cr. | 3.08 | 1.50 |
| PAT Margin | (%) | 3.61 | 2.42 |
| Total Debt/Tangible Net Worth | Times | 1.56 | 1.97 |
| PBDIT/Interest | Times | 5.70 | 4.12 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.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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