Global Packaging : Long Term Rating BWR BB

Rating Rationale
Brickwork Ratings assigns ‘BWR BB-’ & ‘BWR A4’ rating for the Bank Loan
Facilities of ₹ 13.83 Cr of Global Packaging.
Brickwork Ratings (BWR) has assigned the following Ratings1 for the Bank Loan facilities
aggregating ₹ 13.83 Cr of Global Packaging. (‘GP or the firm’).
Facility
Limits
(₹ Cr)
Cash Credit
Fund Based
6.60
Term Loan – I
Fund Based
0.99
Term Loan – II
Fund Based
2.38
Tenure
Long Term
Term Loan – III
Fund Based
3.13
Sub Limit:
Buyers Credit
Fund Based
(3.13)
Term Loan – IV
Fund Based
0.27
Bank Guarantee
Non-Fund Based
0.46
Total
13.83
Rating^
BWR BB(Pronounced BWR Double B Minus)
Outlook : Stable
Short Term
BWR A4
(Pronounced BWR A Four)
(INR Thirteen Crores and Eighty Three Lakhs only)
BWR has principally relied upon the audited financial results up to FY14, and projections for
FY15, publicly available information and information/clarifications provided by the
management.
The rating reflects the experience of the promoters in the yarn manufacturing business, increase
in revenue from operations and improvement in operating profitability. The rating also factors
the favourable location of the firm near to the textile hub. However, the ratings are constrained
by small scale of operations, project implementation risk of the ongoing capex, moderate
financial risk profile marked by low net profit margins. The rating is further constrained by
volatility associated with the input prices and presence of strong players in a highly fragmented
industry.
Background
GP established as Partnership firm in 2011 promoted by Mr. Kshitij Yadav, Mr. Pawan Yadav
and Mr. Sumit Yadav. The company is engaged in manufacturing of texturized yarn, twisted
1
Please refer to www.brickworkratings.com for definition of the Ratings
www.brickworkratings.com
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27 Jan 2015
yarn and grey knitted fabrics. GP generates a majority income through the sale of texturized
yarn and further from sale of knitted fabrics. The company caters majorly the western part of
India and earns its revenue from the domestic markets. GP has two plants located in Silvassa,
Daman and Dadra & Nager Haveli, having total installed capacity of 2300 metric tonnes per
annum (MTPA) as on March 31, 2014. The company is in the process of setting up two warp
knitting machine.
Management Profile
GP is managed by Mr. Kshitij Yadav who looks after the aspects of procuring order, quality,
control and production. Mr. Pawan Yadav looks after day to day administration and liasioning
work with various agencies. Mr. Sumit Yadav looks after the marketing activities. Mr. Ajeet
Yadav is the mentor of the unit.
Financial Performance
GP has reported total operating income of ₹ 30.33 Cr and operating profit of ₹2.77 Cr in FY14 as
against total operating income of ₹24.37 Cr and operating profit of ₹1.46 Cr in FY13. Net profit
increased to ₹0.20 Cr in FY14 from ₹0.05 in FY13. Tangible net worth has marginally increased
to ₹5.60 Crs in FY14 from ₹5.30 Crs in FY13.
Rating Outlook
The outlook is expected to be stable for the current year. Going forward, the firm's ability to
complete the capex within the envisaged time, scale up its operations, improve leveraged
position and manage working capital efficiently will be the key rating sensitivities.
Analyst Contact
Relationship Contact
analyst@brickworkratings.com425-24
bd@brickworkratings.com
Phone
Media Contact
1-860-425-2742
media@brickworkratings.com
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
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27 Jan 2015