March 12, 2014
Mumbai
Falcon Marine Exports Limited
 
 Rating Reaffirmed 
 
Total Bank Loan Facilities Rated Rs.920 Million
Long Term Rating CRISIL BBB+/Stable (Reassigned)
Short Term Rating CRISIL A2 (Reaffirmed)
(Refer to Annexure 1 for Facility-wise details)

CRISIL has assigned its 'CRISIL BBB+/Stable' rating to the long-term bank facilities of Falcon Marine Exports Ltd (FMEL), while reaffirming the rating on the company's short-term bank facilities at 'CRISIL A2'.
 
The ratings reflect strong growth in FMEL's scale of operations, supported by its established market position in the shrimp industry, and healthy operating capabilities. The ratings also reflect the company's robust financial risk profile, marked by a comfortable net worth, low gearing, and healthy debt protection metrics. These rating strengths are partially offset by geographical concentration in FMEL's revenue profile, financial support extended to associate companies, and the susceptibility of the company's operating margins to volatility in raw material prices and to foreign exchange rates.

Outlook: Stable

CRISIL believes that FMEL will maintain its established market position in the shrimp industry along with healthy operating capabilities. The outlook may be revised to 'Positive' if the company sustains its scale of operations and profitability, and controls its working capital cycle; or improves its liquidity with sizeable equity from the promoters. Conversely, the outlook may be revised to 'Negative' if FMEL's liquidity deteriorates due to any unprecedented stretch in its working capital cycle or any unanticipated substantial fund support to a group entity. The outlook may also be revised to 'Negative' if the company's capital structure weakens due to large debt-funded capital expenditure.

About the Company

FMEL, promoted by Mr. Tara Ranjan Patnaik and Mr. Prava Ranjan Patnaik, was set up in Bhubaneshwar (Odisha) in 1986. The company produces and exports marine products, mainly shrimps.
 
FMEL reported profit after tax (PAT) of Rs.289.6 million on net sales of Rs.5.3 billion for 2012-13 (refers to financial year, April 1 to March 31), vis-à-vis a PAT of Rs.205.1 million on net sales of Rs.4.6 billion in the preceding year.

Annexure 1 - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Million) Rating Facility Amount (Rs.Million) Rating
Export Packing Credit* 357.5 CRISIL A2 Export Packing Credit* 357.5 CRISIL A2
Letter of credit & Bank Guarantee 224 CRISIL A2 Letter of credit & Bank Guarantee 326.5 CRISIL A2
Post Shipment Credit* 137.5 CRISIL A2 Post Shipment Credit 137.5 CRISIL A2
Proposed Short Term Bank Loan Facility 47 CRISIL A2 Proposed Short Term Bank Loan Facility 10.5 CRISIL A2
Standby Line of Credit 88 CRISIL A2 Standby Line of Credit 88 CRISIL A2
Term Loan 66 CRISIL BBB+/Stable -- 0 --
Total 920 -- Total 920 --
*Pre Shipment and Post shipment facilities are both way interchangeable to the extent of 100 per cent
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About CRISIL Ratings
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Last updated: May, 2013

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March 12, 2014

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