Rating Rationale: Facility Amount ( CR) Tenure Rating

Rating Rationale
Malar International
27 Aug 2018
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of ₹6.00Crores of Malar
International
Particulars
Amount
Rating*
Facility (₹ Cr) Tenure
Fund based
Packing Credit 5.00 BWR A4

Non Fund based Short Term (Pronounced as BWR A four)
1.00
ILC/FLC/LOU
Total 6.00 INR Six Crore Only
*Please refer to BWR website www.brickworkratings.com/ for definition of the ratings
Rationale/Description of Key Rating Drivers/Rating sensitivities:
BWR has principally relied upon the audited financials in of FY17, provisional financial of FY18 and
projected financials up to FY20 and publicly available information and information/clarifications
provided by the concern.
The rating draws strength from the experience of the Proprietor in cashew processing and trading
industry and established relationship with customers and suppliers for procurement of cashews and
export of processed cashews. The ratings are, however, constrained by small scale of operations, modest
net worth and high reliance on short term borrowings, exposure to intense competition and
susceptibility of the operating margin to volatile raw material prices and forex risk. Going forward,
ability to adapt the changes in cashew industry, sustaining the profit margins, achieving the futuristic
projections and exploring new demands will be the key rating sensitives.
Description of Key Rating Drivers
Strengths:
The concern benefits from the extensive industry experience of more than a decade of its proprietor in the
cashew processing industry and he has developed healthy relationships with its suppliers ensuring
adequate and timely supply of raw materials.
1 27 Aug 2018
Constraints:
The concern had a modest net worth of around Rs.1.19 cr as of March 31, 2017, on account of limited
accretion to reserves due to modest scale of operations. The concern's gearing is high at 4.49 times for
FY17 due to high reliance on short term bank limits.
Prices of cashew kernels are highly volatile due to the seasonal nature of the product, and maintenance of
a large inventory exposes the concern to price risks and numerous small-scale unorganized players
catering to local demands and exposure to forex risk.
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).
About the concern

Malar International established in the year 2002, engaged in the imports of Raw Cashew Nuts, exporting
processed Cashew kernels and CNSL(CASHEW NUT SHELL LIQUID) to other countries. The installed
capacity for the unit is 8 to 10 tons per day and their utilised capacity is 6 tons per day.
Concern’s Financial Performance

Gearing of the concern has improved to 3.00 times in FY18(provisional) as compared to 4.49
times in FY19. However, the long term borrowings of the concern includes unsecured loan of
Rs.1.16 crs. (FY17).
Key Financial Indicators

Key Parameters Units 2018 2017
Result Type Provisional Audited
Operating Revenue ₹ Cr 18.85 25.90
EBITDA ₹ Cr 0.82 0.47
PAT ₹ Cr 0.20 0.36
Tangible Net worth ₹ Cr 1.37 1.19
Total Debt/Tangible Net worth Times 3.00 4.49
Current Ratio Times 1.90 1.19
2 27 Aug 2018
Rating History for the last three years
Instrument
S.No Current Rating (2018)
/Facility Rating History
Type
Amount
(Long Term/ Rating 2017 2016 2015
(₹ Crs)
Short Term)
1 Fund Based Short term 5.00

BWR A4
(Pronounced as NIL
Non Fund Based BWR A four )
2 Short term 1.00
Total 6.00 ₹ Six Crore Only
Status of non cooperation with Previous CRA : NIL

Any other information: Non Applicable
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
media@brickworkratings.com
R Varadarajan
Chief Manager-Ratings
Relationship Contact
analyst@brickworkratings.com
bd@brickworkratings.com
Phone: 1-860-425-2742
3 27 Aug 2018
For print and digital media
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it
may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a
meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its
rationales for consideration or otherwise through any print or electronic or digital media.
Note on complexity levels of the rated instrument:

BWR complexity levels are meant for educating investors. The BWR complexity levels are available
at www.brickworkratings.com/download/ComplexityLevels.pdf Investors queries can be sent to info@brickworkratings.com.
About Brickwork Ratings

Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers
Bank Loan, NCD, Commercial Paper, MSME ratings and grading services. NABARD has empaneled Brickwork for MFI
and NGO grading. BWR is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of
India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter and strategic partner.
BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh,
Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations. BWR has rated debt
instruments/bonds/bank loans, securitized paper of over ₹ 11,99,663 Cr. In addition, BWR has rated over 6819 MSMEs.
Also, Fixed Deposits and Commercial Papers etc. worth over ₹48,803 Cr have been rated.
BWR has rated over 30 PSUs/Public Sector banks, as well as many major private players. BWR has a major presence in
ULB rating of nearly 102 cities
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.
4 27 Aug 2018

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Rating Rationale

Packing Credit 5.00 BWR A4

Total 6.00 INR Six Crore Only

*Please refer to BWR website www.brickworkratings.com/ for definition of the ratings

Rationale/Description of Key Rating Drivers/Rating sensitivities:

Description of Key Rating Drivers

About the concern

Concern’s Financial Performance

Key Financial Indicators

Result Type Provisional Audited

Operating Revenue ₹ Cr 18.85 25.90

EBITDA ₹ Cr 0.82 0.47

PAT ₹ Cr 0.20 0.36

Tangible Net worth ₹ Cr 1.37 1.19

Total Debt/Tangible Net worth Times 3.00 4.49

Current Ratio Times 1.90 1.19

1 Fund Based Short term 5.00

Total 6.00 ₹ Six Crore Only

Status of non cooperation with Previous CRA : NIL

Hyperlink/Reference to applicable Criteria

● Approach to Financial Ratios

● Short Term Debt

For any other criteria obtain hyperlinks from website

Analytical Contacts Media

Note on complexity levels of the rated instrument:

About Brickwork Ratings

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