Rating Rationale
Brickwork Ratings reaffirms the rating for the Bank Loan Facilities aggregating ₹
12 Cr of Savoir Faire Manufacturing Company Private Limited
Brickwork Ratings has reaffirmed following Rating1 for the Bank Loan Facilities of Savoir Faire
Manufacturing Company Private Limited. (SFMC or the “Company”):-
Facility
Previous
Limits
(₹ Cr)
Present
Limits Tenure
(₹ Cr)
Previous Rating
Rating after Review
BWR BB
(Pronounced as
BWR Double B)
Outlook: Stable
BWR BB
(Pronounced as BWR
Double B)
Outlook: Stable
Reaffirmed
Fund Based
Cash
Credit
15.00
12.00
Total
15.00
12.00
Long
Term
INR Twelve Crores only
BWR has essentially relied upon audited financial results of SFMC up to FY15, provisional
financials for FY16 and projected financial data for FY17 & FY18, publicly available information
and information provided by the management.
The rating has, inter alia, factored in the experienced management, comfortable debt protection
metrics and increasing sales marked by government contracts. The rating is, however,
constrained by a moderate scale of operations with low tangible net worth, fluctuations in raw
material costs and a long conversion cycle.
Background:
Savoir Faire Manufacturing Company Private Limited was incorporated in 2004. The company
is promoted by Mr. Mahesh Aggarwal and Mr. Bhupesh Khanna. The company is engaged in the
manufacture of various pipes such as PVC, PP-R, SWR pipes, agricultural pipes, WWT products
amongst others. The company has four manufacturing units located at Haridwar (one),
Dehradun (two) and Nepal (one). The company sells its products to sanitary and hardware
traders real estate and construction companies.
Ownership and Management:
Mr. Mahesh Agarwal and Mr. Bhupesh Khanna are the founding directors of the company with
68.15% and 31.85% percent stake respectively, both having an experience of more than 18 years
in the similar line of business. Mr. Mahesh Agarwal holds a graduate degree in B.E. (Chemical)
and Masters in International Business and Marketing, and handles Finance and Marketing
departments in the Company. Mr. Bhupesh Khanna holds a graduate degree in science and
handles the R&D department.
1
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1
6 Sep 2016
Financial Performance:
As per the audited financials for FY15, SFMC’s operating income stood at Rs. 46.80 Cr. against
Rs. 46.36 Cr. in FY14. Profit after tax for the company stood at Rs. 1.67 Cr. In FY15 against a
profit after tax of Rs. 1.52 Cr in FY14. Operating profit margin and net profit margin for the
company stood at 8.50% and 3.13% respectively in FY15. ISCR and DSCR for the company
stood at 2.45 times and 2.08 times respectively in FY16. Tangible networth for the company
stood at Rs. 17.33 Crores in FY15. Leverage for the company i.e. TOL/TNW is 1.29 times in FY15.
As per the provisional financial data for FY16, SFMC achieved turnover of Rs. 50.12 Crs with a
PAT of Rs. 1.64 Cr, Tangible Net Worth stood at Rs. 18.97 Crs with leverage of 0.97 times.
Rating Outlook:
The rating outlook is expected to be stable over the current year. Going forward, scaling up
operations, managing inventory turnover, improving profitability margins, meeting projections
and ensuring timely servicing of debt would be the key rating sensitivities.
Analyst Contact
Relationship Contact
[email protected]
[email protected]
Phone
Media Contact
1-860-425-2742
[email protected]
Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,
which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or
completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied warranty
of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR
should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses
incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any
reasons.
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2
6 Sep 2016