| Lifelong India Private Limited | ||||||
| 'CRISIL A/Stable/CRISIL A1' assigned to bank debt | ||||||
| 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 assigned its 'CRISIL A/Stable/CRISIL A1' ratings to the bank facilities of Lifelong India Private Limited (LIL, part of Lifelong Group). |
| Analytical Approach |
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CRISIL has consolidated the business and financial risk profiles of LIL with Lifelong Meditech Pvt Ltd (LML). The entities, collectively referred to as the Lifelong group, have been combined as LML is a 100% subsidiary of LIL. |
| Key Rating Drivers & Detailed Description |
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Strengths * Strong market position marked by sole suppliers of handle bar assemblies to HMC and a diversified revenue base The group has been supplying handle bar assemblies to HMC for more than a decade and enjoy sole supplier status. Other than that they also supply about 50% of their air cleaner assembly requirements. There are plans to add more components to its product portfolio. The group diversified its revenue base by leveraging its expertise in plastics to establish the syringe business. They provide specialised syringes on contract manufacturing basis and under their own brand. Syringes are sold in India, Latin America, Asia and the European Union. Further, plastic injection moulding and aluminium die casting products are provided to other global original equipment manufacturers (OEMs). CRISIL believes that the strong relations and increasing business will help them maintain their position as a key supplier for HMC. Their diversified revenue base, marked by an established syringe business and expertise to make products for other global OEM's further validates their market position. * Comfortable financial risk profile: The total outside liabilities to adjusted networth (TOLANW) is estimated to have declined to 1.6 times on March 31, 2018 from 1.7 times as on March 31, 2017. Interest cover and net cash accrual to adjusted debt is estimated at 4.6 times in fiscal 2018 (4 times in fiscal 2017) and 60% (43% in fiscal 2017), respectively. Over the medium term, net cash accrual generated is expected to comfortably cover maturing debt and meet future requirements. CRISIL believes that their financial profile is expected to remain comfortable over the medium term as they are expected to generate healthy accruals and there are no plans for any debt funded capex. * Efficient working capital cycle: Working capital cycle is expected to remain healthy over the medium term'gross current asset were 72 days on March 31, 2018 (66 days on March 31, 2017) due to quick realisation of debtors and order-backed inventory. The bill discounting facility availed helps in early realisation of debtors. Weaknesses * Customer concentration in revenue HMC accounts for nearly 80% of its topline. This revenue concentration exposes the group to fluctuations in the performance of HMC. This risk is partially offset by the diversified product base, healthy relations and sole supplier status with HMC. Further, sales to other customers have been improving though their value remains low. CRISIL expects that due to high reliance and growing business from HMC, performance of group will be dependent on the performance of HMC. * Modest scale of operation in syringe business About 70-80% of the group's revenue accrues from the automotive assembly business, while the remaining is contributed by syringe, plastic injection moulding and aluminium die casting segment. Although the syringe business has been growing at a compound annual growth rate of 14% since fiscal 2015, it only accounts for about 15% of total revenue in fiscal 2018. Growth of syringe business is likely to be steady but its share in revenue mix will remain constrained. |
| Outlook: Stable |
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CRISIL believes that Lifelong will maintain its credit risk profile on the back of its comfortable financial risk profile and the extensive experience of its promoters. The outlook may be revised to 'Positive' if revenue and profitability increase, financial risk profile is stable and there is diversification in customer base. Conversely the outlook maybe revised to 'Negative' if increase in working capital requirement, decline in operating income or profitability or any debt-funded capital expenditure plan weakens financial risk profile, especially liquidity. |
| About the Company |
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Incorporated in 1985, LIL, promoted by Mr Atul Raheja, commenced operations in 1989 as a home appliance company selling its products under the Lifelong brand. |
| Key Financial Indicators | ||||||||||||||||||||||||
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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 - 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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| 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 |
| For further information contact: | ||||||
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