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CRISIL has assigned its ‘B+/Stable/P4’ ratings to Sri Ramalingeswara Rice & Oil Mills’ (Sri Ramalingeswara’s) bank facilities. The ratings reflect Sri Ramalingeswara’s below-average financial risk profile marked by high gearing levels, large working capital requirements, and susceptibility to adverse changes in the Government regulations on paddy and rice prices. These weaknesses are partially offset by the benefits that Sri Ramalingeswara derives from assured offtake by Food Corporation of India (rated ‘AAA (so)/Stable’ by CRISIL), and Sri Ramalingeswara’s promoters’ experience in the rice milling business.
Outlook: Stable
CRISIL believes that Sri Ramalingeswara will maintain its business risk profile over the medium term, backed by its industry experience of its promoters. Any significant improvement in Sri Ramalingeswara’s capital structure and profitability may lead to a revision in the outlook to ‘Positive’. Conversely, the outlook may be revised to ‘Negative’ if the firm undertakes a large debt-funded capital expenditure (capex) programme, or reports a significant decline in its realisations and accruals.
About the Firm
Set up in 1950 by Mr. Pattabhi Chowdary, Sri Ramalingeswara is a partnership firm. It is into milling and marketing raw and boiled rice. Currently, the partners in the firm are Mr. Banda Ramachandra Rao, Mr. B V Krishna Rao, and Mr. B V V S K Govind. The rice mill is located in Velpur, Andhra Pradesh, with an installed capacity of 20 tonnes per hour (tph) - 10 tph of raw rice and 10 tph of boiled rice.
Sri Ramalingeswara posted a provisional profit after tax (PAT) of Rs.5.1 million on net sales of Rs.406.9 million for 2009-10 (refers to financial year, April 1 to March 31), against a reported net loss of Rs.25.6 million on net sales of Rs.402.8 million for 2008-09.
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Media Contacts
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Analytical Contact
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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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