Rating Rationale
March 27, 2025 | Mumbai
Bora Mobility LLP
Rating upgraded to 'Crisil BBB/Stable'; Rated amount enhanced for Bank Debt
 
Rating Action
Total Bank Loan Facilities RatedRs.50 Crore (Enhanced from Rs.12 Crore)
Long Term RatingCrisil BBB/Stable (Upgraded from 'Crisil BBB-/Stable')
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed rationale

Crisil Ratings has upgraded its rating on the long-term bank facilities of Bora Mobility LLP (BML; part of the Bora group) to ‘Crisil BBB/Stable’ from ‘Crisil BBB-/Stable’.

 

The upgrade reflects the improvement in the business risk profile, as seen in the substantial increase in revenue to Rs 1,984 crore in fiscal 2024 from Rs 658.64 crore in fiscal 2023. The momentum is expected to sustain in fiscal 2025 as well, supported by healthy demand in the export markets of Russia, Dubai, and Hong Kong; as well as government support to increase merchant exports. However, financial risk profile is average, with gearing of 1.76 times as on March 31, 2024. Regulatory risks and persistent demand from exports, as well as optimal inventory maintenance due to technological and obsolescence risk involved in the electronics industry, remain monitorable.

 

The rating reflects the extensive experience of the key promoter in the mobile industry and the increasing scale of operations. These strengths are partially offset by low operating margin, exposure to demand and supply risks, and modest financial risk profile.

Analytical approach

Crisil Ratings has evaluated the standalone business and financial risk profiles of BML. Unsecured loans of Rs 43.40 crore as on March 31, 2024, are treated as debt as these are short term in nature and bear interest.

Key Rating Drivers & Detailed Description

Strengths:

  • Extensive experience of the key promoter and increasing scale of operations: The main promoter, Mr Prashant Bora, has experience of over 15 years in the mobile phone business and sound understanding of demand and supply dynamics across global markets. The firm has rapidly scaled up operations in the past two fiscals, as indicated by revenue growth from Rs 211.50 crore in fiscal 2022 to Rs 1,984.55 crore in fiscal 2024 on the back of strong demand and better geographical reach. It has presence in multiple countries as well as India, and procures items effectively from domestic players and their distributors. The topline is expected to increase over the medium term and the business will benefit from incentives for production of electronics in India through government initiatives such as Make in India and Production-Linked Incentive scheme.

 

  • Increasing scale of operations: The firm’s scale of operations has increased significantly in the last three fiscals, registering a compound annual growth rate of 152%. Revenue increased to Rs 1,984.55 crore in fiscal 2024 from Rs 658 crore in fiscal 2023, and is likely to increase further this fiscal. However, operating margin dropped 150 basis points on-year in fiscal 2024. Sustenance of scale at a healthy level with similar margin remains monitorable.

 

Weaknesses:

  • Low operating margin owing to trading business: The operating margin of the Bora group fell to 2.95% in fiscal 2024 from around 3.58% in fiscal 2021 and is expected to remain modest over the medium term. The impact of fluctuations in product prices or foreign exchange (forex) rates on the operating margin will remain monitorable. Since the products are competitive and new technology replaces the old, optimal inventory has to be maintained to avoid any inventory losses.

 

  • Modest financial risk profile: Gearing was moderate at 1.76 times as on March 31, 2024, wherein majority of debt is in the form of unsecured loans from the promoters and related family. With significant increase in scale of operations, gearing is expected to weaken moderately due to reliance on debt. Average networth was Rs 28.57 crore due to withdrawal by the partners in the form of dividend of Rs 17.9 crore.

 

  • Exposure to global demand and supply risks: The firm derives revenue from export to the Middle East, Africa, Europe and Americas. Its scale of operations and business sustainability depend on steady demand from these geographies. Furthermore, it faces increasing competition from China and Vietnam. The ability to procure efficiently from the domestic market and sustenance of revenue will remain monitorable.

Liquidity: Adequate

Bank limit utilisation was around 48% for the 12 months through January 2025. Cash accrual is expected to be Rs 27-30 crore against negligible term debt obligation over the medium term; and the remaining will cushion liquidity. Liquidity is also supported by unsecured loans of Rs 43.40 crore as on March 31, 2024, which are treated as debt as these are short term in nature and bear interest. However, as per the management, these funds are expected to remain in business to support the increasing scale and working capital cycle. Current ratio was healthy at 1.25 times as on March 31, 2024.

Outlook: Stable

The Bora group will continue to benefit from its longstanding relationships with principal suppliers and the experience of the management in mitigating the inherent risks in the trading business.

Rating sensitivity factors

Upward factors:

  • Sustenance of scale at healthy level and improvement in operating margin leading to higher cash accrual
  • Improvement in liquidity and financial risk profile with total outside liabilities to adjusted networth ratio of 2.5 times or below

 

Downward factors:

  • Decline in scale and margin leading to cash accrual below Rs 20 crore
  • Any significant capital withdrawal leading to pressure on liquidity or financial structure
  • Stretch in receivables or pile-up in inventory leading to large working capital requirement

About the company

Set up in 2019 by Mr Prashant Bora and Ms Aarti Bora, BML is a merchant exporter of mobile phones and accessories (computers, personal computer systems, IT peripherals, accessories, wearable gadgets and all other electronics and electronic equipment, appliances and materials) and household products (kitchenware, crockery, decorative items and finishings). It exports to countries such as Russia, Dubai and Africa and is the sole distributor of Vivo mobiles in Pimpri and Lonavala regions of Pune, Maharashtra.

Key financial indicators

BML

 

 

 

As on / for the period ended March 31

Unit

2024

2023

Operating income

Rs crore

1,984.55

658.64

Reported profit after tax (PAT)

Rs crore

31.01

11.79

PAT margin

%

1.56

1.79

Adjusted debt/adjusted networth

Times

1.76

2.14

Interest coverage

Times

5.67

4.89

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 6.00 NA Crisil BBB/Stable
NA Electronic Dealer Financing Scheme(e-DFS) NA NA NA 6.00 NA Crisil BBB/Stable
NA Proposed Cash Credit Limit NA NA NA 38.00 NA Crisil BBB/Stable
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 50.0 Crisil BBB/Stable   -- 01-03-24 Crisil BBB-/Stable   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 6 State Bank of India Crisil BBB/Stable
Electronic Dealer Financing Scheme(e-DFS) 6 State Bank of India Crisil BBB/Stable
Proposed Cash Credit Limit 38 Not Applicable Crisil BBB/Stable
Criteria Details
Links to related criteria
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)
Basics of Ratings (including default recognition, assessing information adequacy)

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