Rating Rationale
April 20, 2020 | Mumbai
Jasch Industries Limited
Rating outlook revised to 'Stable'; Ratings reaffirmed and withdrawn
 
Rating Action
Total Bank Loan Facilities Rated Rs.46.04 Crore
Long Term Rating CRISIL BBB/Stable (Outlook revised from 'Positive'; Rating reaffirmed and withdrawn)
Short Term Rating CRISIL A3+ (Rating reaffirmed and withdrawn)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has revised its rating outlook on the long-term bank facilities of Jasch Industries Ltd (JIL; part of the JIL group) to 'Stable' from 'Positive', while reaffirming its 'CRISIL BBB/CRISIL A3+' ratings.
 
The outlook revision reflects weaker business performance compared to CRISIL's expectations. The JIL group achieved revenue of Rs 100.97 crore in the first nine months of fiscal 2020, against Rs 139.14 crore in the corresponding period of the previous fiscal. Furthermore, with profitability reduced to 6.6% for the first nine months of fiscal 2020, compared to 8.7% in the corresponding period of the previous fiscal, accrual generation was much lower than CRISIL's expectations.
 
CRISIL has subsequently withdrawn its ratings at the company's request and on receipt of no-objection certificate from the banker. The withdrawal is in line with CRISIL's policy of withdrawal of bank loan ratings.

Analytical Approach

For arriving at the ratings, CRISIL has combined the business and financial risk profiles of JIL and its wholly-owned subsidiary, Jasch North America Company (JNAC; electronic gauge business). This is because both these entities, collectively referred to as the JIL group, have common ownership and management and significant business synergies.
 
JNAC had sold its investment in its subsidiary, Indev Gauging Systems Inc, during the second quarter of fiscal 2020, and hence it is not being included while arriving at the ratings of the JIL group.

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

About the Group

JIL, incorporated as Jasch Polymers Ltd in 1985, got its current name in 1993. The company manufactures polyurethane (PU) resin and PU and poly vinyl chloride (PVC) coated fabric, also known as synthetic leather. In 2000, it opened an industrial gauge division that specialises in online measurement and control systems for flat sheet products, including instruments such as thickness gauge, coating thickness gauge, paint thickness gauge, and basis weight, ash, and moisture measurement gauges. These are used by players in the paper, plastic films, and steel industries. The manufacturing unit is in Sonepat, Haryana. JIL, through its wholly-owned subsidiary, JNAC, purchased a US-based industrial gauge unit, Indev Gauging System Inc, in January 2012. JIL is listed on the Bombay Stock Exchange.

Key Financial Indicators
As on / for the period ended March 31   2019 2018
Operating income Rs crore 178 156.64
Reported profit after tax Rs crore 7.98 4.4
PAT margin % 4.48 2.80
Adjusted debt/Adjusted networth Times 0.53 0.65
Interest coverage Times 6.2 5.04
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)
ISIN Facility Allotment date Coupon rate (%) Maturity date Amount
(Rs crore)
Rating assigned
with outlook
NA Bank Guarantee NA NA NA 4.0 Withdrawn
NA Cash Credit NA NA NA 20.0 Withdrawn
NA Letter of Credit NA NA NA 14.0 Withdrawn
NA Term Loan NA NA Nov-24 5.71 Withdrawn
NA Proposed Long Term
Bank Loan Facility
NA NA NA 2.33 Withdrawn
 
Annexure - List of entities consolidated
Entities consolidated Extent of consolidation Reason for consolidation
Jasch North America Company Full Wholly owned subsidiary
Annexure - Rating History for last 3 Years
  Current 2020 (History) 2019  2018  2017  Start of 2017
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  28.04  Withdrawn      02-07-19  CRISIL BBB/Positive  31-08-18  CRISIL BBB/Stable  08-08-17  CRISIL BBB/Stable  CRISIL BBB/Watch Developing 
                    15-03-17  CRISIL BBB/Watch Developing   
Non Fund-based Bank Facilities  LT/ST  18.00  Withdrawn      02-07-19  CRISIL A3+  31-08-18  CRISIL A3+  08-08-17  CRISIL A3+  CRISIL A3+/Watch Developing 
                    15-03-17  CRISIL A3+/Watch Developing   
All amounts are in Rs.Cr.
 
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Bank Guarantee 4 Withdrawn Bank Guarantee 4 CRISIL A3+
Cash Credit 20 Withdrawn Cash Credit 20 CRISIL BBB/Positive
Letter of Credit 14 Withdrawn Letter of Credit 14 CRISIL A3+
Proposed Long Term Bank Loan Facility 2.33 Withdrawn Proposed Long Term Bank Loan Facility 2.33 CRISIL BBB/Positive
Term Loan 5.71 Withdrawn Term Loan 5.71 CRISIL BBB/Positive
Total 46.04 -- Total 46.04 --
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
Rating Criteria for Engineering Sector
CRISILs Criteria for Consolidation
CRISILs Criteria for rating short term debt

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