Rating Rationale Brickwork Ratings reaffirms ‘BWR B+’ & assigns ‘BWR A4’ for the enhanced Bank Loan Facilities aggregating to ₹ 34.22 Cr of Vasani Wood Works Brickwork Ratings has reaffirmed following Ratings1 for Bank Credit facilities of Vasani Wood Works. Facility Previous (₹ in Cr) Present (₹ in Cr) Fund BasedCash Credit 13.00 5.00 Tenure Rating1 Long term 6.22 Term loan Non Fund Based – Letter of Credit Total BWR B+ (Pronounced BWR B Plus) (Outlook : Stable) BWR A4 (Pronounced BWR A Four) Rating History (August 2013) BWR B+ (Pronounced BWR B Plus) (Outlook : Stable) - 23.00 Short term - 13.00 34.22 (INR Thirty Four Crores and Twenty Two Lakhs only) The rating factors strong group profile and consistent growth in turnover over the years . However the rating is constrained by low tangible networth, intense competition, weak debt protection metrics and inability to derive higher margins from the trading business. Background: Vasani Wood Works is a partnership firm established in the year 2007 with four partners which has been reconstituted with 2 partners in Sept 2013. The partners are Suresh N.Patel and Hashmita S Patel who are having more than two decades of experience in running saw mill and trading in timber & plywoods. This firm is one of the group concerns of Prabhat group of companies. The group has a strong profile with more than 40 firms/ companies engaged in similar activities for more than four decades. The partners are guided by the promoters of the group Shivgan K Patel, Nathu K Patel and Gopal K Patel. Financial Performance: The firm reported gross sales of Rs. 71.59 Crores in FY 14 compared to Rs.56.23 Crs for the FY13. The operating profit margins are at 4.20% in FY 14 compared to 3.52% in FY 13. Net Profit margin is low at 0.73 for the FY14. The firm’s finance costs have been on the rise in the past. 1 Please refer to www.brickworkratings.com for definition of the Ratings www.brickworkratings.com 1 23 Dec 2014 Rating Outlook: Being a trading entity, Vasani Wood Works has been generating very low operating profits. Going forward, ability to improve the margins, control/ reduce its finance costs and strengthen the net worth of the firm will be the key rating sensitivity factors. 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. www.brickworkratings.com 2 23 Dec 2014
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