press release r.s.triveni foods pvt. ltd. - careratings.com foods pvt... · press release...
TRANSCRIPT
1 CARE Ratings Limited
Press Release
R.S.Triveni Foods Pvt. Ltd.
November 15, 2017
Ratings
Facilities Amount
(Rs. crore) Rating1 Rating Action
Long-term / Short-term Bank Facilities
40.00
CARE BBB-; Stable/CARE A3 (Triple B Minus; Outlook:
Stable/ A Three) Reaffirmed
Total Facilities 40.00
(Rs. Forty Crores only)
Details of instruments/facilities in Annexure-1
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of R.S. TriveniFoods Pvt. Ltd (RST) continue to derive strength from
experienced promoters of Agropure group with demonstrated financial support, group’s long track record,
growing scale of operations and its moderate financial risk profile marked by moderate gearing as well as debt
coverage metrics and comfortable operating cycle. The ratings are however constrained by low profitability
margins due to group’s presence in a highly fragmented industry and susceptibility of margins to changes in
commodity prices and government policies.
Going forward, the ability of the group to sustain growth in sales and register improvement in margins and
maintain a moderate gearing would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoters with long track record:The Agropure group has been into processing and trading of
pulses since 1980s with APCF and GFPL having more than 7 years of track record of operations, RST having
more than 6 years of track record, SMPPL having more than 5 years of track record and HDFM (partnership
firm) having more than 27 years of track record of operations. All the 5 companies/firms are managed and
promoted by Goyal Family. The promoters of the AgroPure group have experience of almost three decades in
the same business. Over the years, the promoters have expanded the processing capacity and have entered
into processing of different varieties of pulses.
Financial support from promoters:The promoters have extended financial support to the Agropure Group as
reflected by incremental infusion of equity/capital of Rs. 2.28 crs in FY15 (refers April 1 to March 31), Rs. 2.84
crs in FY16 and Rs. 0.49 crs in FY17. Apart from this, the promoters have also extended support in the form of
infusion of unsecured loans to meet the liquidity requirements of the entities. The total unsecured loans
extended by promoters and related parties stood at Rs.10.49 crs as on March 31, 2017 (PY: Rs.10.08 crs).
Growing scale of operations and albeit low profitability margin: The total operating income of the Agropure
Group has grown at a CAGR 32% over the past 3 years from from Rs. 880.39 crs in FY15 to Rs. 1540.50 crs in
FY17, majorly on account of expansion of capacity for pulses, besan and cattle feed over the period FY15-17,
higher capacity utilization for meeting higher demand in the market leading to increase in price of pulses and
increase in sales realization. The PBILDT margin increased to 2.54% in FY17 (PY: 1.38%) and the PAT margin
1Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications
2 CARE Ratings Limited
Press Release
increased to 1.23% in FY17 (PY: 0.22%) on account of higher operating profits and lower interest cost. The
profitability margins of the group were high because of high fluctuation of prices of pulses in the industry
benefiting the group during the year. Nonetheless, the margins remain low due to high competition in the
industry.
Large Customer base and established network of brokers and distributors: The Agropure group deals with
large number of wholesalers and traders, with whom it has been associated for a long time. The sales are
made through network of more than 250 distributors and 50 traders. Also, the group has established strong
relationship with various reputed brands. The group has been growing on account of greater emphasis on
direct sales to the large retail chains which now accounts for 20-25% of the total sales of the group. It largely
caters to markets in Northern Indian States such as Delhi, Haryana, Punjab, Uttarakhand, UP etc.
Comfortable operating cycle:The operating cycle of group remained comfortable at 23 days as on March 31,
2017 (PY: 28 days). The average fund based working capital utilization of RST remained low at 26.50% for the
last trailing 12 months ending September, 2017 due to healthy cash accruals. The current ratio of the group
had improved and remained comfortable at 2.40x as on March 31, 2017 (PY: 1.94x).
Moderate financial risk profile: The capital structure of the group improved and remained comfortable as on
March 31, 2017 with an overall gearing of 0.75x (PY: 1.29x) on account of accretion of profits to the net worth
of the company and lower debt. The debt protection metric represented by total debt to GCA of the group had
significantly improved to 2.35x as on March 31, 2017 (PY: 11.21x) on account of lower debt and healthy cash
accruals and interest coverage of the entire Agropure group also improved to 5.81x during FY17 (PY: 1.80x)
owing to increasing operations marked by higher PBILDT and corresponding lower interest costs.
Key Rating Weaknesses
Highly fragmented industry:The pulses processing and trading industry is highly fragmented, characterized by
presence of large number of small players competing with few organised players. The entry barriers are low in
the industry. The fragmented nature of the industry along with the intense competition puts pressure on the
already low profitability margins.
Susceptibility to fluctuation in raw material prices and Government policies: Wide fluctuation in prices of
commodities can impact the operating profitability of the companies. However, since the inventory cycle of
Agropure group is short, the risk arising due to fluctuation in market prices and hike in minimum support
prices announced by the government is mitigated to some extent. The group stands to gain from the recent
export ban lift on tur, urad and moong by government of India (GoI) in September 2017 following record
production of 22.4 million tonne in 2016-17 (July-June) as against 16.35 million tonne in the previous year.
Analytical approach:CARE has taken a combined view of Agro Pure Capital Foods Pvt. Ltd. (APCF, rated CARE
BBB-; Stable / CARE A3), Hindustan Dall Flour & Mills (HDFM), Shri Mahavir Pulses Pvt. Ltd. (SMPPL, rated CARE
BBB-; Stable / CARE A3), R. S.Triveni Foods Pvt. Ltd. (RST, rated CARE BBB-; Stable / CARE A3) and GPA Foods
Pvt. Ltd. (GFPL, rated CARE BBB-; Stable / CARE A3) while assessing the credit risk as these entities are
engaged in similar line of business of processing and trading of pulses with a common management and
control.
3 CARE Ratings Limited
Press Release
Applicable Criteria:
Criteria on assigning Outlook to Credit Ratings
CARE’s Policy on Default Recognition
Criteria for Short Term Instruments
Rating Methodology-Factoring linkages in ratings
Rating Methodology-Manufacturing Companies
Financial ratios – Non-Financial Sector
About the Company
R.S Triveni Foods Pvt. Ltd. (RST), belongs to AgroPure Group and was incorporated in April 2010 as a private
limited company to change the constitution of Triveni Industries which was a partnership firm incorporated in
September 2004. In July 2012, Triveni Industries got merged with RST. Prior to merger, there were no
operations in RST. The main promoters of RST are Mr. Pramod Kumar and Mr. Anish Goyal both of them have
a cumulative experience of over five decades. RST is primarily engaged in processing and trading of Pulses
&Besan and Cattle feeds which contributed 99.88% to the turnover of the company in FY17. Currently, it is
operating at an installed capacity of 60,000 MTPA for pulses and cattle feed as on March 31, 2017.The
combined capacity of the group as on March 31, 2017 stands at 2.53 lakh tones per annum for pulses and
cattle feed and 0.25 lakh tones per annum for Besan across the seven plants spread across Narela and
Lawrence road locations, Delhi/NCR.
Brief Financials of RST (Rs. crore) FY16 (A) FY17 (A)
Total Operating Income 460.90 387.83
PBILDT 4.55 8.07
PAT 1.02 4.26
Overall gearing (times) 0.92 0.36
Interest coverage (times) 1.56 5.91
A: Audited
Status of non-cooperation with previous CRA: Not Applicable
Any other information: Not Applicable
Rating History for last three years: Please refer Annexure-2
Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of
complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators
or others are welcome to write to [email protected] for any clarifications.
Analyst Contact:
Name: Ajay Kumar Dhaka
Tel: +91-11-45333218
Mobile: +91-8826868795
Email: [email protected]
**For detailed Rationale Report and subscription information, please contact us at www.careratings.com
About CARE Ratings:
CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit
4 CARE Ratings Limited
Press Release
Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices.
Disclaimer
CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments.
In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.
Annexure-1: Details of Instruments/Facilities
Name of the Instrument
Date of Issuance
Coupon Rate
Maturity Date
Size of the Issue
(Rs. crore)
Rating assigned along with Rating
Outlook
Fund-based/Non-fund-based – LT/ST
- - - 40.00 CARE BBB-; Stable/ CARE A3
Annexure-2: Rating History of last three years
Sr. No.
Name of the Instrument/Bank
Facilities
Current Ratings Rating history
Type
Amount Outstanding (Rs. crore)
Rating
Date(s) & Rating(s)
assigned in 2017-2018
Date(s) & Rating(s)
assigned in 2016-2017
Date(s) & Rating(s)
assigned in 2015-2016
Date(s) & Rating(s)
assigned in 2014-2015
1. Fund-based/Non- Fund – LT/ST
LT/ST 40.00 CARE BBB-; Stable/ CARE A3
- 1) CARE BBB-; Stable/ CARE A3 (08-Feb-2017)
1) CARE BB+/ CARE A4+ (11-Mar-
2016)
1)CARE BB (04-Mar-2015)
5 CARE Ratings Limited
Press Release
CONTACT Head Office Mumbai
Ms. Meenal Sikchi Mr. Ankur Sachdeva Cell: + 9198190 09839 Cell: + 9198196 98985 E-mail: [email protected] E-mail: [email protected]
Ms.Rashmi Narvankar Mr. Saikat Roy Cell: + 9199675 70636 Cell: + 9198209 98779
E-mail: [email protected] E-mail: [email protected]
CARE Ratings Limited (Formerly known as Credit Analysis & Research Ltd.)
Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022
Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: [email protected]
AHMEDABAD Mr. Deepak Prajapati 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad - 380 015 Cell: +91-9099028864 Tel: +91-79-4026 5656 E-mail: [email protected] BENGALURU Mr. V Pradeep Kumar Unit No. 1101-1102, 11th Floor, Prestige Meridian II, No. 30, M.G. Road, Bangalore - 560 001. Cell: +91 98407 54521 Tel: +91-80-4115 0445, 4165 4529 Email: [email protected] CHANDIGARH Mr. Anand Jha SCF No. 54-55, First Floor, Phase 11, Sector 65, Mohali - 160062 Chandigarh Cell: +91 85111-53511/99251-42264 Tel: +91-0172-490-4000/01 Email: [email protected] CHENNAI Mr. V Pradeep Kumar Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai - 600 002. Cell: +91 98407 54521 Tel: +91-44-2849 7812 / 0811 Email: [email protected] COIMBATORE Mr. V Pradeep Kumar T-3, 3rd Floor, Manchester Square
Puliakulam Road, Coimbatore - 641 037.
Tel: +91-422-4332399 / 4502399
Email: [email protected] HYDERABAD Mr. Ramesh Bob 401, Ashoka Scintilla, 3-6-502, Himayat Nagar, Hyderabad - 500 029. Cell : + 91 90520 00521 Tel: +91-40-4010 2030 E-mail: [email protected]
JAIPUR Mr. Nikhil Soni 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road, Near Collectorate Circle, Bani Park, Jaipur - 302 016. Cell: +91 – 95490 33222 Tel: +91-141-402 0213 / 14 E-mail: [email protected] KOLKATA Ms. Priti Agarwal 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) 10A, Shakespeare Sarani, Kolkata - 700 071. Cell: +91-98319 67110 Tel: +91-33- 4018 1600 E-mail: [email protected] NEW DELHI Ms. Swati Agrawal 13th Floor, E-1 Block, Videocon Tower, Jhandewalan Extension, New Delhi - 110 055. Cell: +91-98117 45677 Tel: +91-11-4533 3200 E-mail: [email protected] PUNE Mr.Pratim Banerjee 9th Floor, Pride Kumar Senate, Plot No. 970, Bhamburda, Senapati Bapat Road, Shivaji Nagar, Pune - 411 015. Cell: +91-98361 07331 Tel: +91-20- 4000 9000 E-mail:[email protected]
CIN - L67190MH1993PLC071691