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CRISIL has assigned its ‘B+/Stable’ rating to Sanjay Steels’ cash credit facility. The rating reflects Sanjay Steels’ weak financial risk profile, marked by high gearing and below-average debt protection metrics, and its low profitability margins, which remain susceptible to volatility in steel prices. These rating weaknesses are partially offset by the experience of Sanjay Steels’ promoter in the steel trading business.
Outlook: Stable
CRISIL believes that Sanjay Steels will continue to benefit from its promoter’s experience in the steel trading business, over the medium term. The outlook may be revised to ‘Positive’ if Sanjay Steels’ capital structure improves, and its revenues and profitability increase significantly, thereby improving its financial risk profile. Conversely, the outlook may be revised to ‘Negative’ if Sanjay Steels’ profitability declines, most likely because of continued volatility in steel prices and sharp decline in sales, or if the promoter withdraws a substantial quantum of capital from the firm.
About the Firm
Set up in July 2007, Sanjay Steels is a sole-proprietorship concern promoted by Mr. Sanjay Gupta. Mr. Gupta has about 15 years of experience in trading of cold-rolled (CR) sheets in Hyderabad (Andhra Pradesh). Sanjay Steels trades in CR sheets, angles, channels, and flats.
Sanjay Steels reported a profit after tax (PAT) of Rs.7 million on net sales of Rs.1.5 billion for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of Rs.2 million on net sales of Rs.0.9 billion for 2008-09.
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Media Contacts
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Analytical Contacts
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CRISIL Rating Desk
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Mitu Samar
Head, Market Development & Communications
CRISIL Limited
Tel: +91-22- 3342 1838
Email: msamar@crisil.com
Tanuja Abhinandan
Market Development & Communications
CRISIL Limited
Tel: +91-22-3342 1818
Email: tabhinandan@crisil.com
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Gurpreet S Chhatwal
Director - CRISIL Ratings
Tel: +91-11-4250 5100
Email: gchhatwal@crisil.com
Vasudevan R
Head - CRISIL Ratings
Tel: +91-44-6656 3106
Email: rvasudevan@crisil.com
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Email: CRISILratingdesk@crisil.com
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