Press Release

Press Release

December 27, 2024

SUNITA IMPEX PRIVATE LIMITED
Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	1.05	ACUITE D \| Downgraded	-
Bank Loan Ratings	9.98	-	ACUITE D \| Downgraded
Total Outstanding	11.03	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has downgraded the long-term rating to ‘ACUITE D’ (read as ACUITE D) from ‘ACUITE B-’ (read as ACUITE B minus) and the short-term rating to ‘ACUITE D’ (read as ACUITE D) from ‘ACUITE A4’ (read as ACUITE A four) to the Rs. 11.03 crore bank facilities of Sunita Impex Private Limited (SIPL).

Rationale for downgrade
The downgrade in the rating is on account of delays in repayment of debt obligations by SIPL as reflected in its Credit Bureau Information report, latest being in the month of October 2024.

About the Company

Sunita Impex Private Limited was established as a partnership firm with the name ‘M/s Sunita Textile & Engineer’ in 1974 by the Sonika family of Kolkata, West Bengal. The firm was converted to a private limited company in June, 1991 with its current name. Since its inception, Sunita Impex Private Limited has been engaged in manufacturing and export of readymade garments and trading of engineering goods. The company has a plant situated at Bangalore operating at an installed capacity of 1 million pieces per annum. The readymade garments and engineering goods are sold to countries including France, Bangladesh, Ivory Coast and Ethiopia.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and risk profile of SIPL to arrive at the rating.

Key Rating Drivers

Strengths

Long operational track record and experienced management
Sunita Impex Private Limited (SIPL) has been in the garment industry and trading of engineering goods for about five decades since 1974. Acuité believes that the long track record of operations will benefit the company going forward, resulting in steady growth in the scale of operations. Further, the key promoter of the company Mr. Sushil Kumar Sonika and Mr. Sunil Sonika have over four decades of experience in a similar line of operation.

Weaknesses

Below average financial risk profile
The company's financial risk profile is below average marked by declining net worth, high gearing and moderate debt protection metrics. The tangible net worth of the company stood at Rs. 2.24 Cr. as on FY2023 as compared to Rs.3.37 Cr. as on FY2022 due to losses during the year which eroded the capital. The gearing of the company stood high at 6.81 times as on FY2023. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) has increased and stood at 8.18 times as on FY2023. The debt protection metrices of the company remain constrained marked by Interest coverage ratio (ICR) of (0.05) times and debt service coverage ratio (DSCR) of 0.18 times for FY2023. The net cash accruals to total debt (NCA/TD) stood at (0.06) times in FY2023.

Working capital intensive nature of operations
SPIL has high working capital requirements as evident from gross current assets (GCA) of 299 days for FY2023 and 275 days for the FY2022. Debtor days increased to 141 days in FY2023 as against 114 days in FY2022. Inventory days increased to 78 days in FY2023 as against 56 days in FY2022. Creditor days of the company stood at 113 days as on FY2023 as compared to 66 days of FY2022.

Delays in servicing term debt obligations
There have been an instance of delay in servicing of debt obligation by the company, latest being in October, 2024 as reported in its credit bureau information report.

Rating Sensitivities

Timely servicing of term debt obligations

Liquidity Position

Poor

The company has made delays in repayment of debt obligations in recent months, latest being in the month of October 2024.

Outlook: Not Applicable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 23 (Actual)	FY 22 (Actual)
Operating Income	Rs. Cr.	18.48	16.08
PAT	Rs. Cr.	(1.13)	(2.48)
PAT Margin	(%)	(6.13)	(15.39)
Total Debt/Tangible Net Worth	Times	6.81	3.49
PBDIT/Interest	Times	(0.05)	(3.54)

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
• Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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
15 May 2024	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	4.00	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	2.20	ACUITE A4 (Reaffirmed)
	Proposed Short Term Bank Facility	Short Term	0.28	ACUITE A4 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	0.50	ACUITE A4 (Reaffirmed)
	Term Loan	Long Term	1.05	ACUITE B- \| Stable (Reaffirmed)
15 Feb 2023	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	4.00	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	2.20	ACUITE A4 (Reaffirmed)
	Letter of Credit	Short Term	1.00	ACUITE A4 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	0.75	ACUITE A4 (Reaffirmed)
	Term Loan	Long Term	0.08	ACUITE B- \| Stable (Downgraded from ACUITE B \| Stable)
19 Jan 2022	Bank Guarantee (BLR)	Short Term	0.75	ACUITE A4 (Reaffirmed)
	Letter of Credit	Short Term	1.00	ACUITE A4 (Reaffirmed)
	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	PC/PCFC	Short Term	1.50	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	4.00	ACUITE A4 (Reaffirmed)
	Bills Discounting	Short Term	2.20	ACUITE A4 (Reaffirmed)
	Term Loan	Long Term	0.08	ACUITE B \| Stable (Reaffirmed)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Canara Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.50	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Canara Bank	Not avl. / Not appl.	Bills Discounting	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.00	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Canara Bank	Not avl. / Not appl.	Bills Discounting	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.20	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Canara Bank	Not avl. / Not appl.	PC/PCFC	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.50	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Canara Bank	Not avl. / Not appl.	PC/PCFC	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.50	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Not Applicable	Not avl. / Not appl.	Proposed Short Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.28	Simple	ACUITE D \| Downgraded ( from ACUITE A4 )
Canara Bank	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	27 Nov 2023	1.05	Simple	ACUITE D \| Downgraded ( from ACUITE B- )

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.

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.