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CRISIL has assigned its bank loan ratings of ‘BBB/Stable/P3+’ to the various bank facilities of Dicitex Furnishings Ltd (DFL). The ratings reflect the Dicitex Group’s strong operating efficiency, supported by vertical integration of operations, and established market position. These strengths are partly offset by high gearing, which restricts the company’s financial flexibility and overall financial risk profile, and implementation risks associated with expansion project.
Analytical Approach
For arriving at the ratings, CRISIL has combined the financial and business profiles of Dicitex Furnishings Ltd. (DFL), Manohar Processors Pvt. Ltd. (MPPL) & Veena Polysters Pvt. Ltd. (VPPL) (herein referred to as Dicitex Group) since they are in the same line of business, have significant business transactions & synergies and common set of promoters. The management is also in the process of amalgamation of MPPL and VPPL. Additionally, the debt of MPPL is backed by corporate guarantee of DFL while the debt of VPPL is backed by corporate guarantee of both MPPL and DFL.
Outlook: Stable
CRISIL expects Dicitex Group to maintain their established position in the furnishings market, backed by vast experience of the promoters. The outlook may be revised to ‘Positive’ if there is a significant improvement in the capital structure through generation of sustainable cash flows. Conversely, the outlook may be revised to ‘Negative’ if there is deterioration in financial risk profile due to larger than expected debt-funded capital expenditure.
About Dicitex Group
Dicitex group was started by Mr Dharam Chand Arora in 1950s and currently consists of three entities – Dicitex Furnishings Ltd., Manohar Processors Pvt. Ltd. & Veena Polysters Pvt. Ltd. The group is managed by Mr. M.L.Arora supported by his two sons Mr. Rajnish & Mr. Nimish Arora. The group presently operates in two main lines of businesses – dress materials & furnishings, and is serving both the domestic as well as the exports market. Dicitex Group has achieved vertical integration in its three manufacturing facilities all located at MIDC, Tarapur near Mumbai.
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Media Contact
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Analytical Contacts
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CRISIL Rating Desk
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Ramya Krishnan Anil
Head, Market Development & Communications
CRISIL
Tel: +91-22-6758-8051
Mobile: +91 98203 42671
Facsimile: +91-22-6758-8088
Email: RamyaKA@crisil.com
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Pawan Agrawal
Director, Corporate and Government Ratings – CRISIL Ratings
Tel: +91-22-6691 3301
Email: pagrawal@crisil.com
Gurpreet S Chhatwal
Head, Corporate and Government Ratings - CRISIL Ratings
Tel: +91-11-4250 5100
Email: gchhatwal@crisil.com
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Email: CRISILratingdesk@crisil.com
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Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 6691 3001 - 09.
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