Download Report

Rating Rationale
Brickwork Ratings reaffirms ‘BWR BB-’ the Bank Facilities of ₹ 7.13 Crores
for Maheshweri Fabtex Private Limited
Brickwork Ratings (BWR) has reaffirmed the Ratings1 of “BWR BB-” (Pronounced BWR
Double B Minus) with a Stable outlook for long term- bank facilities of ₹ 7.13 crores for
Maheshweri Fabtex Private Limited (MFPL” or the company”)
The rating continues to factor in the long standing experience of the management in the textile
industry, established relationship with reputed clientele base, fiscal benefits in the form of TUFS
and access to cheap power from the state Government.
The rating however continues to remain constrained on account of small scale of operations,
weak financial profile; marked by lower profitability margins and leveraged capital structure.
The rating are further constrained on account of limited presence of MFPL in the textile value
chain, highly competitive nature of the industry and volatility associated with the raw material
prices.
Background:
Maheshweri Fabtex Private Limited (MFPL), established in the year 2002, is mainly engaged in
trading business of Shirting fabrics. Company’s registered office is situated at Kalbadevi;
Mumbai. MFPL deals into shirting fabrics like 100% polyester, 100% cotton, Polyester viscose
blended fabrics and polyester cotton blended fabrics ranging in width from 90cms to 147cms.
The company mainly caters to two segments in shirting fabrics 1) Fancy fabric 2) Uniform
fabrics for various industries. Over the years, MFP has become successful in associating itself
with the reputed clients such as Bombay Dyeing, Mafatlal, Madura Garments, S. Kumar,
Siyaram and ITC.
Financial Performance
Operating Income (OI) remained volatile for the period under study. OI for FY13 increased by
26.13% to Rs30.22cr, while it has increased marginally by 1.58% in FY14 to Rs30.70Cr.
Operating margin stood at 5.40% as per the provisional financial for FY14 from 3.76% in FY13.
Net profit margin continues to remain low at 0.98% in FY13 and 0.98% as per the provisional
financial of FY14. Total debt stood at Rs.6.85cr while tangible Net worth Stood at Rs.2.43cr in
FY14 v/s Rs2.12cr in FY13 resulting in high gearing at 2.48x in FY13 and 2.82x as per the
provisional financials for FY14.
Management Profile
MFPL is family controlled business. Board consists of two members Mr. Ankit Khator and Mrs.
Bina Khator. Mr. Ankit looks after the financials and sales development while Mrs. Bina plays a
1
Please refer to www.brickworkratings.com for definition of the Ratings
www.brickworkratings.com
1
21 Nov 2014
vital role in formation of growth and development strategies. They are assisted by Mr. Arvind
Khator who has significant experience in textile industry and managing the group activities.
Rating Outlook:
The ability to increase the scale of operations with an improvement in the profitability in the
wake of increasing competition, steady flow of orders & better working capital management are
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
21 Nov 2014