| Bliss GVS Pharma Limited | ||||||
| Ratings placed on 'Watch Negative' | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to annexure for Details of Instruments & Bank Facilities |
| Detailed Rationale |
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CRISIL has placed its ratings on the bank loan facilities of Bliss GVS Pharma Limited (Bliss) (part of Bliss Group) on 'Rating Watch with Negative Implications'. |
| Analytical Approach |
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For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Bliss and its subsidiaries, together referred to as the Bliss group, because all these entities are in the same business, and have common promoters and strong operational and financial links. |
| Key Rating Drivers & Detailed Description |
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Strengths: * Extensive experience of promoters and established brand Three-decade long experience of the group's promoters in the pharmaceutical industry has helped them develop brands in the African market in various therapeutic segments, and establish healthy relationship with distributors, thereby improving business risk profile. P-Alaxin, Lonart, Funbact, and Lofnac are some of the group's established brands in the anti-malarial, dermatology, and anti-inflammatory segments. Also, the Bliss group is one of the leaders in manufacturing suppositories and pessaries dosage forms. * Above average financial risk profile Networth is adequate at Rs. 650 crore along with total outside liabilities to adjusted networth (TOLANW) at 0.37 times as on March 31, 2019. Interest coverage and net cash accrual to total debt ratio stood at 44.23 times and 1.20 times, respectively, in fiscal 2019. Weakness * Large working capital requirement Operations have been highly working capital intensive, with gross current assets, inventory, and receivables of around 274 days, 38 days and 190 days, respectively, as on March 31, 2019. Working capital intensity will be a key monitorable. * Exposure to geographical concentration in revenue Around 85% of total revenue comes from African countries, which exposes performance to regulatory and other policy changes. The exposure to the African region is expected to remain at similar levels with API trading business also focused towards the same region. Liquidity: Adequate Bliss group has adequate liquidity driven by unencumbered cash and cash equivalents of Rs.88.27 crore as on March 31, 2019. Bliss (on standalone basis) has access to working capital bank limits of Rs. 60 crore, utilized to the tune of around 49% over the 12 months trailing May, 2019. CRISIL believes Bliss group has sufficient accruals, unutilized bank limits along with cash and cash equivalents to finance its incremental working capital needs and capex plans over the medium term. Rating Sensitivity Factors Upward Factor * Maintenance of financial risk profile with sustained improvement in working capital requirement, with GCA at below 200 days * Significant improvement in net cash accruals through improved scale of operations, improvement in profitability along with geographical diversification. Downward Factor * Decline in scale of operations and profitability resulting in cash accrual below Rs 110 crores * Further stretch in working capital cycle * Deterioration in financial risk profile due to substantial time and/or cost overrun for completion of capital expenditure plans or any further unexpected sizeable debt-funded capital expenditure * Further decline in the company's financial flexibility on the backdrop of continued dip in market capitalization or reduction in promoter shareholding. |
| About the Company |
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Incorporated in 1984 and promoted by Mr S N Kamath and Mr Gautam Ashra, Bliss develops and manufactures pharmaceutical formulations mainly for sale in the African countries. The company sells formulations in the form of suppositories, pessaries, capsules, tablets, and syrups. At present, it manufactures more than 250 branded formulations in the anti-malarial, anti-fungal, anti-bacterial, anti-biotic, anti-inflammatory, contraceptive, and anti-diabetic segments. Bliss also contract-manufactures suppositories and pessaries for Sanofi, Sun Pharma, Mankind, and Alkem. However, these clients do not have rights for exporting the products. The company has four subsidiaries i.e., Bliss GVS Healthcare Pte. Ltd., Kremoint Pharma Private Limited, Asterisk Lifesciences Limited, Bliss GVS International Pte. Ltd. and three step-down subsidiaries. |
| Key Financial Indicators (Consolidated) | ||||||||||||||||||||||||||||
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
| Annexure - Details of Instrument(s) | ||||||||||||||||||||||||||||
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| Annexure - List of Entities Consolidated | ||||||||||||||||||||||||||||
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||||||||
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| For further information contact: | ||||||
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