|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
|---|---|---|---|
| Bank Loan Ratings | 3.00 | ACUITE C | Downgraded | - |
| Bank Loan Ratings | 27.00 | - | ACUITE A4 | Downgraded |
| Total Outstanding | 30.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
Rating Rationale |
|
Acuite has downgraded the long-term rating to ‘ACUITE C’(read as ACUITE C) from ‘ACUITE BBB-'(read as ACUITE triple B minus) and its short-term rating to ‘ACUITE A4’(read as ACUITE A four) from ‘ACUITE A3’ (read as ACUITE A three) on the Rs.30.00 crore bank facilities of Vipul Organics Limited(VOL).
Rationale for Downgrade As per the CRIF Report, there was a delay in the month of August 2024 of 34 days in the Packing Credit facility. |
| About Company |
|
VOL, established in 1972 in Mumbai by Mr. Pravichandra B. Shah as a small venture, is involved in the production and trading of pigment powder, pigment dispersion, Dyes, and Dyes Intermediates. In 1994, the company transformed into a public limited entity and became listed on the Bombay Stock Exchange. The role of Managing Director was assumed by Mr. Vipul P. Shah, a chemical engineer by profession and the son of Mr. P. B. Shah. The company currently operates three manufacturing units situated in Tarapur, Ambernath, and Palghar (Maharashtra), collectively offering a total annual capacity of 3120 MT.
|
Unsupported Rating |
| Not Applicable |
Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| Acuité has consolidated the business and financial risk profiles of Vipul Organics Limited (VOL) and its subsidiary, i.e. Shree Ambika Naturals Private Limited (SANPL). The consolidation is in view of the common management, operating in same line of business and operational synergies between these entities. As of FY23, VOL holds 56.04 percent of equity shares in SANPL.
|
Key Rating Drivers |
Strengths |
| Experienced management with established track record of operations
Established in 1972 by Mr. Pravichandra B. Shah, the company is involved in the manufacturing and trading of pigment-related products such as pigment powder, pigment dispersion, Dyes, and Dyes Intermediates. Subsequently, in 1994, VOL underwent conversion into a public limited company and achieved listing on the Bombay Stock Exchange. The company’s operations are overseen by Mr. Vipul P. Shah, a chemical engineer with over thirty years of experience in the Dyes and Pigments Industry, who is the son of Mr. P. B. Shah. The proficient second line of management provides robust support to the top management. The company’s lengthy operational history of more than five decades, combined with skilled leadership, has facilitated the establishment of strong global relationships with esteemed clients and suppliers. |
|
| Working capital intensive operations
The inventory days stood at 88 days in FY2024 as against 106 days in FY2023. Further, the debtor days stood at 108 days in FY 2024 as compared to 93 days in FY 2023. The creditor days tsood at 144 days in FY2024 as against 138 days in FY2023. Acuité believes that the working capital operations of the firm will remain at the similar levels over the medium term. |
Rating Sensitivities |
| Timely servicing of debt obligations |
Liquidity Position |
| Poor |
|
Delays in debt obligations
Acuite has observed a delay of 34 days in the month of August 2024 for Packing Credit facility. The banker feedback are also not available. It appears to be cash flow mis-match of the Company and hence the rating downgrade has been undertaken. |
| Outlook: Not Applicable |
| |
Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
|---|---|---|---|
| Operating Income | Rs. Cr. | 150.08 | 133.93 |
| PAT | Rs. Cr. | 3.34 | 1.87 |
| PAT Margin | (%) | 2.22 | 1.40 |
| Total Debt/Tangible Net Worth | Times | 0.49 | 0.54 |
| PBDIT/Interest | Times | 5.24 | 4.39 |
Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
Any Other Information |
| None |
Applicable Criteria |
|
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Covered Bonds: https://www.acuite.in/view-rating-criteria-83.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm |
Note on complexity levels of the rated instrument |
|
| |
|
| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
|
||||||
|
|
