Rating Rationale
Brickwork Ratings reaffirms the long term rating of ‘BWR BB’
for
enhanced long term Bank Loan Facilities of ₹ 9.36 Crores and assigns
‘BWR A4’ for short term Bank Loan Facilities of ₹ 25.00 Crores of Viva
Supermarket Private Limited
Brickwork Ratings (BWR) has reaffirmed Ratings1 of BWR BB (Pronounced BWR double B) for
the enhanced long term bank loan facilities of ₹ 9.36 Crores and assigned BWR A4 (Pronounced
BWR A Four) for the short term bank loan facilities of ₹ 25.00 Crores of Viva Supermarket
Private Limited (VSPL or the Company)1.
Facility
Present Previous
Limits
Limits
( ₹ Cr)
( ₹ Cr)
Tenure
Rating History
Reaffirmed/
Assigned Rating
BWR BB
BWR BB
Fund Based (FB)
Cash Credit
8.00
8.00
Long Term
Term Loan
Non – Fund Based
(NFB)
Import LC (DP/DA upto
120 days)
W/w Buyer’s Credit/Stand
– by LC
Total Limits
1.36
25.00
(Pronounced BWR Double (Pronounced BWR
B)
Double B)
(Outlook -Stable)
(Outlook -Stable)
-
-
BWR A4
Short Term
(25.00)
34.36
(Pronounced BWR
-
-
A Four)
INR Thirty Four Crores and Thirty six Lakhs Only
BWR has principally relied upon the audited financial results up to FY 13, provisional financials
of FY14, publicly available information and information/clarification provided by the Company’s
management.
The rating takes into account management’s ability to infuse capital as per business
requirement. The rating continues to factor VSPL’s experienced management, tie up with wellknown brands and healthy growth prospects. However, the rating remains constrained by low
profitability margins on account the trading nature of the business, high working capital
intensive nature of business, geographical concentration and severe competition from other
industry players. The rating is further constrained on account of supplier concentration risk.
1
Please refer to www.brickworkratings.com for definition of the Ratings
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1
5 Feb 2015
Background
VSPL was established in the year 1994 and incorporated on 10th June 1996. It is a family run
business promoted by Mr. Raj Thakur, Ms. Hema Thakur and Ms. Priyanka Thakur. The
Company is engaged in running supermarkets in and around Mumbai. It is mainly involved in
selling of electronic goods and readymade garments.
Shareholding Pattern
The shareholding of the Company has changed as follows:
Equity Shareholder
FY13
% of Shareholding
Hema Thakur
24.94%
Hitesh Parekh
0.002%
Priyanka Thakur
24.94%
Raj Thakur
49.92%
M/s Viva Holdings
0.00%
FY12
% of Shareholding
1.25%
0.01%
1.25%
2.50%
95.00%
Share capital was increased from Rs 5,00,000 in FY12 to Rs 1,00,00,000 in FY13, with share
premium of Rs 3 Crores, indicating promoters’ ability to infuse capital.
95% of the shares of the Company is held by M/s Viva Holdings, a partnership firm, with equal
partnership sharing ratio among its partners – Deepak Thakur, Mehul Thakur, Rohan Thakur,
Siddharth Thakur and Priyanka Thakur.
Financial Performance
Revenues increased from Rs 50.14 Crores in FY12 by around 11% to Rs 55.62 Crores in FY13,
which further increased by around 75% to Rs 97.77 Crores in FY14, as per provisional numbers,
mainly because Company started exports in FY14. Operating profit increased from Rs 2.22
Crores in FY12 to Rs 3.22 Crores in FY13. PAT increased from Rs 0.71 Crore in FY12 to Rs 1.00
Crore in FY13. Consequently, operating margin and PAT margin increased from 4.44% and
1.42% in FY12 to 5.79% and 1.80% in FY13, respectively. ROCE also increased from 8.56% in
FY12 to 11.43% in FY13, on back of increase in operating profit. Total debt of the Company
decreased from Rs 20.66 Crores in FY12 to Rs 11.57 Crores in FY13, mainly on account of
decrease in unsecured loans. Networth increased substantially from Rs 3.43 Crores in FY12 to
Rs 8.38 Crores in FY13 mainly on account of increase in share capital from Rs 0.05 Crore in
Fy12 to Rs 1.00 Crore in FY13 and shares being issued at a premium of Rs 3.00 Crores.
Consequently, gearing decreased considerably from 6.03 times in FY12 to 1.38 times in FY13.
Gearing is further expected to improve going forward driven by better operating performance
and improving capital structure. Interest coverage ratio and DSCR is recorded at 2.91 times and
0.89 time in FY13.
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5 Feb 2015
Rating Outlook
VSPL’s ability to adopt appropriate strategies for diversifying its supplier base coupled with
continued growth in revenue and improvement of margins remain the key rating sensitivities for
the Company.
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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5 Feb 2015