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CRISIL has assigned its ‘BB-/Stable/P4’ ratings to the bank facilities of Vishesh Overseas (Vishesh). The ratings reflect Vishesh’s small scale of operations, constrained financial risk profile, marked by a low net worth and weak debt protection measures, and exposure to risks related to customer concentration in its revenue profile, vulnerability of profitability to fluctuations in foreign exchange rates, and large working capital requirements. These rating weaknesses are partially offset by the benefits that Vishesh derives from its promoters’ industry experience and its moderate operating margin.
Outlook: Stable
CRISIL believes that Vishesh will continue to benefit over the medium term from its promoters’ industry experience and its moderate operating efficiencies. The outlook may be revised to ‘Positive’ if the firm diversifies its customer profile, enhances its scale of business, and improves its cash accruals. Conversely, the outlook may be revised to ‘Negative’ if the firm’s cash accruals deteriorate, resulting in weak liquidity, or if the firm’s financial risk profile deteriorates because of large debt-funded capital expenditure.
About the Firm
Set up in 1981 as a partnership firm by Mr. Rajiv Prem Arora and Mrs. K Krishna, Vishesh manufactures and exports casual wear for women, such as tops, blouses, and ensembles. In April 2006, Mrs. K Krishna left the firm, and Mr. Adil Prem Arora (son of Mr. Rajiv Prem Arora) took her place as partner. Profit and loss sharing ratio between Mr. Rajiv Prem Arora and Mr. Adil Prem Arora is at 9:1. Vishesh also derives 30 to 35 per cent of its revenues from sale of kids’ apparel such as t-shirts and tops. Vishesh caters mainly to the spring and summer collection of international retailers such as Hennes & Mauritz (H&M), Debenhams Retail plc, and Mother Works Inc.
Vishesh reported a net loss of Rs. 11.7 million on net sales of Rs.199 million for 2008-09 (refers to financial year, April 1 to March 31), against a profit after tax (PAT) of Rs.10 million on net sales of Rs.291 million for 2007-08.
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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
Mohit Makhija
Senior Manager - CRISIL Ratings
Tel: +91-11-4250 5100
Email: mmakhija@crisil.com
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Email: CRISILratingdesk@crisil.com
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