December 20, 2013

Mumbai

BSL Castings Private Limited

Rating Reaffirmed

Total Bank Loan Facilities Rated	Rs.380.0 Million
Long-Term Rating	CRISIL BBB-/Stable (Reaffirmed)
Short-Term Rating	CRISIL A3 (Reassigned)

(Refer to Annexure 1 for details on facilities)

CRISIL’s ratings on the bank facilities of BSL Castings Pvt Ltd (BSL; part of the Bhupendra group) continue to reflect the Bhupendra group’s above-average financial risk profile, marked by low gearing and strong debt protection metrics, its promoters’ extensive industry experience, and established customer relationship. These rating strengths are partially offset by the group’s large working capital requirements and susceptibility to cyclicality in the automobile segment.

For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BSL) and Bhupendra Steels Pvt Ltd (BSPL; rated ‘CRISIL BBB-/Stable/CRISIL A3’), collectively referred to as the Bhupendra group. This is because both the companies are in a similar line of business, have common promoters, operational linkages, and fungible cash flows. Furthermore, BSPL has cross-guaranteed the bank lines of BSL.

Outlook: Stable

CRISIL believes that the Bhupendra group will continue to benefit over the medium term from its established customer relationships backed by extensive experience of the promoters. The outlook may be revised to ‘Positive’ in case the group scales up its operations significantly and diversifies its clientele, while maintaining its profitability and working capital requirements. Conversely, the outlook may be revised to ‘Negative’ in case the Bhupendra group undertakes a larger-than-expected, debt-funded capital expenditure programme or its working capital requirements increase, weakening the group’s capital structure.

About the Group

The Bhupendra group entered the castings manufacturing business by setting up BSPL, the group’s flagship company, in 1980. BSPL manufactures ingots, castings, rounds and bars, which are mainly used in the automotive sector. BSPL’s manufacturing unit in Faridabad (Haryana) has an installed capacity of 20,000 tonnes per annum (tpa) for ingots, 6000 tpa for castings, and 45,000 tpa for rounds and flats. BSL is also in the same line of business as BSPL. BSL mainly supplies to the engineering and automotive sectors. BSL has an installed manufacturing capacity of 15,000 tpa. It supplies ingots to BSPL and also undertakes job-work in casting products for BSPL. In 2012-13 (refers to financial year, April 1 to March 31), BSPL accounted for approximately 35 per cent of the total sales of BSL.

For 2012-13, the Bhupendra group reported a profit after tax (PAT) of Rs. 50.6 million on net sales of Rs.1.50 billion, as against a PAT of Rs. 54.4 million on net sales of Rs. 1.53 billion for 2011-12.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Cash Credit#	170.0	CRISIL BBB-/Stable	Cash Credit*	170.0	CRISIL BBB-/Stable
Post-shipment Credit	70.0	CRISIL A3	Post-shipment Credit@	70.0	CRISIL A3
Term Loan	140.0	CRISIL BBB-/Stable	Term Loan	140.0	CRISIL BBB-/Stable
Total	380.0	--	Total	380.0	--

* Fully interchangeable with WCDL and pre-shipment limit in foreign currency includes a sub limit of Rs.30 million for Letter of Credit.

@ includes sub limit of Rs.30 Million for letter of credit/bank guarantee/ Bill Discounting.

#Fully interchangeable with Working Capital Demand Loan and pre-shipment limit in foreign currency includes a sub limit of Rs.30 million for Letter of Credit.

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Last updated: May, 2013

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December 20, 2013	http://www.crisil.com