Rating Rationale Simran Fisheries Pvt Ltd 27 Sep 2018 Brickwork Ratings revises the ratings for the Bank Loan Facilities of ₹. 9.33 Crores of Simran Fisheries Pvt Ltd. Particulars Amount (₹ Crs) Rating* Facility Tenure Previous Previous Present Present (Feb, 2016) BWR BB- BWR BB (Pronounced as Outlook: Stable 8.93 9.33 Long Term BWR Double B (Pronounced as BWR Non Fund Based Minus) Double B) Outlook: Stable (UPGRADED) Total 8.93 9.33 INR Nine Crores Thirty Three Lakhs Only *Please refer to BWR website www.brickworkratings.com/ for definition of the ratings ​ ​ Ratings: Upgraded Rationale/Description of Key Rating Drivers/Rating sensitivities: BWR has essentially relied upon Simran Fisheries Pvt Ltd (SFPL) Audited Financial Statements from FY15 to FY18 & projected financials for FY19 for ease in understanding and comparison. SFPL has also provided the projected financial statements for FY20, publicly available information and information / clarification provided by the SFPL management. The ratings assigned to the bank facilities of SFPL draws strength from consistent rse in TNW, steady increase in PAT, moderate coverage ratios, increase in current ratio, fishing rights to five dams. The ratings are however constrained by dip in revenue, limited experience of promoters, dependence on a single reservoir. Going forward the firm’s ability to improve sales, debt servicing capability, maintain the profitability and reducing dependence on a single reservoir would be the key rating sensitivities. 1 27 Sep 2018 Description of Key Rating Drivers ● Credit Strengths: Consistent rise in TNW & PAT: The TNW of SFPL has increased from Rs 4.59 Cr (Rs 8.92 Cr ​ analysed) in FY17 to Rs 5.27 Cr (Rs 11.49 Cr analysed) in FY18. Whereas, the PAT of the company has increased from Rs 0.49 Cr in FY17 to Rs 0.68 Cr in FY18. Moderate coverage ratios: The DSCR & ISCR of SFPL stood at 0.74x & 1.22x respectively in FY17 which further improved to 1.27x & 1.67x in FY18. Improvement in the liquidity profile: The current ratio of SFPL showed improvement from 1.16x(reworked) in FY17 to 1.62x (reworked) in FY18. Fishing right to five dams: Despite being a fairly new player in the market, SFPL bagged fishing contracts for five years for the Omkareshwar Dam, Khutaghat dam, Rana Pratap Sagar dam, Bango dam, with exclusive fishing rights to Indirasagar dam. ● Credit Risks: Dip in revenue: The revenue of SFPL dipped from Rs 42.09 Cr in FY17 to Rs 31.67 Cr in FY18 as in the fifth year of the contract, SFPL purchased lesser fishlings from from MP government. Limited experience of the promoters: The company is a fairly new player in the fisheries ​ industry and the promoters have limited experience but, BWR takes into account the support gained from the diversified presence of the group companies in the animal husbandry business and the reputation of the entire group in Madhya Pradesh. Perishable Nature of commodity: SFPL like other entities involved in the fisheries business are ​ exposed to the inherent risk of climate change and and perishable nature of the commodity. Analytical Approach For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale). Rating Outlook: Stable ​ 2 27 Sep 2018 BWR believes the Simran Fisheries Pvt Ltd business risk profile will be maintained over the medium ​ ​ term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures. About the Company: Simran Fisheries Pvt. Ltd. was incorporated in January, 2013 with registered office in Indore, Madhya Pradesh. SFPL is engaged in fish trading activities and mainly deals in freshwater fish segment namely, Rohu and Katla. The company has signed a lease agreement with the Madhya Pradesh Matsya Mahasangh for fishing from the Indira Sagar reservoir in Madhya Pradesh. The Company has four directors . Mr. Satpal Singh is the Managing Director and Mr. Harpal Singh, Mr. Gurmeet Singh and Mr. Prabhtej Singh Bhatia are the directors of the company. Company Financial Performance During FY17, the total operating income of the company stood at Rs.42.09 crore (vis-à-vis Rs.31.67 crore in FY18), whereas the PAT during the same year stood at Rs.0.49 crore (vis-à-vis Rs.0.68 crore in FY18). DSCR stood at 0.74 Times in FY17 as compared to 1.27 Times in FY18. Rating History for the last three years S.No Facility Current Rating (2018) Rating History Amount Type Rating 2017 Feb, 2016 2015 (₹ Crs) BWR BB- (Pronounced BWR BB as BWR (Pronounced as BWR Non Fund Double B 1 Long term 9.33 Double B) NA NA Based Minus) Outlook: Stable Outlook: (Upgraded) Stable Total 9.33 ₹Nine Crores Thirty Three Lakhs Only Status of non-cooperation with previous CRA (if applicable)-NA 3 27 Sep 2018 Key Financial Indicators Key Parameters Units 2018 2017 Result Type Audited Audited Operating Revenue ₹ Cr 31.96 42.09 EBITDA ₹ Cr 2.41 2.27 PAT ₹ Cr 0.68 0.49 Tangible Networth (Analysed) ₹ Cr 11.49 8.90 Total Debt/Tangible Net worth Times 1.64 1.50 Current ratio Times 1.62 1.16 Hyperlink/Reference to applicable Criteria ● General Criteria ● Approach to Financial Ratios ● Infrastructure Sector ● Short Term Debt For any other criteria obtain hyperlinks from website Analytical Contacts Media Sushil Kumar Chitkara [email protected] DGM Ratings Relationship Contact [email protected] [email protected] Phone: 1-860-425-2742 For print and digital media 4 27 Sep 2018 The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. 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