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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 182.80 | ACUITE BBB- | Negative | Reaffirmed | Stable to Negative | - |
| Bank Loan Ratings | 67.20 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 250.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B Minus) and short term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs.250.00 Cr. bank facilities of Suraj Impex India Private Limited (SIIPL). The outlook is revised from 'Stable' to ‘Negative’.
Rationale for rating The outlook revision is on account of lower operating and profitability margins in FY24 as compared to previous year due to global trade disruptions and fluctuations in commodity prices. Further, the rating reaffirmation takes into account the long standing experience of promoters and moderate financial risk profile which is expected to improve over the medium term. Moreover, rating is constrained due to the volatility in the operational income on account of macro-economic factors like demand and price of the traded commodities and moderate working capital levels. |
| About the Company |
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Incorporated in the year 1997, Suraj Impex India Private Limited (SIIPL) is an Indore based company engaged into the trading of agro commodities like Indian yellow maize, soybean meal, sunflower extract, wheat, soybean seed etc. The company runs two warehouses at Kandla & Tuticorin with a capacity of 150,000 sq. ft each. In FY25, the company has also acquired another land for warehouse in Tuticorin for ~Rs.15 Cr. Further, the company also has a solar plant of 2MW for which it has signed a 25 years power purchase agreement (PPA) with Telangana State Government at a rate of ~Rs.6.75/unit. SIIPL is currently managed by Mr. Vinod Kumar Jain and Mr. Praveen Kumar Vyas.
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| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of SIIPL to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Experience of promoters and established track record of operations
Incorporated in 1997, SIIPL is promoted and managed by Vinod Kumar Jain who has an experience of 35 years in the agro industry. The company deals in multiple products including Indian yellow maize, soya bean meal, wheat, sunflower extraction, etc. The company procures the commodities from domestic processors and exports to various countries like Singapore, Vietnam, Iran, France etc. It also imports certain commodities and sells in domestic market to the end users like poultry feed manufacturers. Acuité believes the company shall benefit due to its established clientele and promoter experience over the medium term. Moderate financial risk profile The financial risk profile of the company is moderate marked by healthy net-worth and gearing levels with low coverage indicators. The net worth of the company stood at Rs. 232.52 Cr. as on 31st March, 2024 against Rs. 222.43 Cr. in the previous year. The increase in net worth is attributable to healthy accretion to reserves. The total debt of the company stood on lower levels in FY24 at Rs.187.53 Cr. as on 31st March, 2024 against Rs.231.43 Cr. as on 31st March, 2023. The lowering in debt is led by lower long-term borrowings as well as low working capital requirements as compared to the previous year. The gearing level (debt-equity) stood at 0.81 times in FY24 against 1.04 times in FY23. Further due to decline in absolute profitability, the debt protection metrics recorded a significant moderation. The Interest Coverage Ratio (ICR) and Debt Service Coverage Ratio (DSCR) declined to 1.69 times and 1.04 times in FY24 against 3.62 times and 1.98 times in FY23 respectively. Debt-EBITDA ratio moderated to 5.12 times in FY24 against 3.53 times in FY23. Going ahead, financial risk profile is expected to remain at moderate levels in absence of no major debt funded capital expenditure and expected healthy cash accruals generation. |
| Weaknesses |
| Volatile revenues with significant decline in margins
The business of the company is largely driven by demand and pricing trends of the traded commodities. The revenue stood increased at Rs. 1,351.65 Cr. in FY24 against the moderated revenue of Rs.676.37 Cr. in FY23. This increase of revenue is on account of increased exports of soybean meal to Iran during the year; which was earlier restricted by the government due to the geo-political circumstances. Further, the domestic sales of maize also contributed to the increase in top line. Moreover, the demand for soybean meal decreased in the start of oil year 2024-25 (Oct’24-Sep’25) due to global disruptions. Therefore, as on December 31, 2024, the company has recorded revenue of Rs.592.27 Cr. Further, despite the increase in revenue, the operating profitability declined to 2.25 percent in FY24 against 8.77 percent in FY23 on account of price fluctuations in the soybean meal and increase in freight rates due to the Red Sea issue. Also, the PAT margin also stood low at 0.75 percent in FY24 against 5.11 percent in the previous year. Acuité believes that the volatility in revenue and any further moderation in the operating margins shall be a key rating sensitivity. Moderate working capital operations The working capital operations are moderate in nature with Gross Current Assets (GCA) of 107 days in FY24 against 213 days in FY23. The decrease in GCA days are led by decline in inventory holding period which stood at 87 days in FY24 against 149 days in FY23. However, the inventory holding generally remain high in this business since the commodities are non-perishable in nature. The average bank limit utilisation for the last 6 months ended January, 2025 stood at ~89%. Going ahead, the working capital operations are expected to remain in the same level depending upon the business operations. Susceptible to volatility in commodity prices and macro-economic factors The main product of export is the ‘soybean meal’ and for domestic market is the ‘Indian yellow maize’ and the prices of such commodities are linked to agricultural production, which, in turn, is susceptible to monsoon, acreage, and yield. The overall demand scenario from international as well as domestic markets for the agro products and the pricing potential continue to remain a key watch out from the business perspective. Also, agricultural commodities are highly regulated by the government on the basis of domestic demand and inflationary conditions. Thus, these factors directly affect the revenue and profitability of the company. |
| Rating Sensitivities |
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Significant volatility in revenues with any further decline in the margins Deterioration in the financial risk profile due to inadequate cash accruals Any stretch in working capital cycle days |
| Liquidity Position |
| Adequate |
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The net cash accruals of the company stood at Rs.11.21 Cr. against debt repayment obligation of Rs.10.05 Cr. in FY23. Going forward, the net cash accruals are expected to be in the range of Rs.11.00-18.00 Cr. through FY2025-27 against repayment obligations of Rs.7-9 Cr. Further, given the nature of industry the reliance on working capital limits is moderately high at 89% utilisation levels for last 6 months ending January 2025. The company has cash and bank balance of Rs.0.19 Cr. and current ratio of 1.35 times as on 31st March, 2024.
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| Outlook: Negative |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 1351.65 | 676.37 |
| PAT | Rs. Cr. | 10.09 | 34.56 |
| PAT Margin | (%) | 0.75 | 5.11 |
| Total Debt/Tangible Net Worth | Times | 0.81 | 1.04 |
| PBDIT/Interest | Times | 1.69 | 3.62 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite) |
| Not applicable |
| Any other information |
| None. |
| Applicable Criteria |
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• 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 • Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm |
| Note on complexity levels of the rated instrument |
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