| Replika Packaging Private Limited | ||||
| Rating migrated to 'CRISIL A / Stable' | ||||
| Rating Action | ||||
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| & *Issuer did not cooperate; based on best-available information | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Due to inadequate information, CRISIL, in line with SEBI guidelines, had migrated the rating of Replika Packaging Pvt Ltd to CRISIL BB+/Stable (Issuer Not Cooperating). However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL Rating is migrating the rating on bank facilities of Replika Packaging Pvt Ltd from CRISIL BB+/Stable (Issuer Not Cooperating) to ‘CRISIL A/Stable’.
The migrate in the rating follows a similar revision in the rating on the bank facilities of the parent, Replika Press Pvt. Ltd. (RPPL; rated 'CRISIL A/Stable/CRISIL A1').
The ratings reflect the strong support of the parent Replika Press Pvt. Ltd. and healthy growth prospects for the packaging business. These strengths are partially offset by the moderate scale of operations and susceptibility to volatility in raw material prices and intense competition in packaging industry. |
Analytical Approach CRISIL Ratings has applied its parent notch-up framework to factor in the extent of support available to the Replika Packaging Pvt Ltd from Replika Press Pvt. Ltd.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths: Established market position and support of the parent: Replika Packaging Pvt. Ltd. (RPL) is 100% subsidiary of Replika Press Pvt. Ltd. (RPPL) is engaged in providing typesetting, prepress, printing, and post-press services to National and International book publishers. RPPL has been in the printing industry in last six decades.
RPPL has control over strategic and operational decisions and strong oversight over financial matters of RPL. The established position of the parent has supported significant revenue growth observed. The topline is expected to go up to Rs. 150 cr. in fiscal 2022 from Rs. 115 cr. in FY21.
Healthy growth prospects for the packaging business: RPL’s has a tie-up with reputed clients in packaging that are into mobile handset segment which support the business the business profile. Packaging segment contributes approx. 25% of the group sales. Addition of new marque clients should help the group post healthy revenue growth in the packaging segment going forward also.
Weakness: Moderate scale of operations: While on improving trend, Company’s scale of operation is moderate indicated by expected revenue of Rs.150 cores in FY22 and Rs. 115 crores in FY21. While company has healthy orderbook providing revenue visibility however any significant increase in sales key sensitivity factor. As the company is majorly into the trading activities so the operating margins are within the range of 2-3% which are expected to remain in the same range in medium term.
Susceptibility to volatility in raw material prices and intense competition in packaging industry: The domestic packaging industry has a large number of unorganized players. Hence, organized players such as the RPL face competitive pressures, especially during economic downturns as clients opt for cheaper solutions. However, being associated with the reputed brands has healthy revenue in the past fiscals and with the healthy order book in hand the company is expected to maintain the revenue growth. |
Liquidity: Strong Liquidity remains adequate, marked by expected cash accrual of Rs.3-4 crores in FY22 and FY23 against nil debt obligations.
Company had fund-based bank limit of Rs. 8 crores which was moderately utilized at an average of around 10-12% during the 12 months till Jan 2022 |
Outlook Stable CRISIL Ratings believes the Replika Packaging Pvt, Ltd. will maintain its healthy financial risk profile over the medium term, backed by comfortable cash accrual and strong parent support |
Rating Sensitivity factors Upward factors
Downward factors
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About the Group RPL was incorporated in June 2016, as a 100% subsidiary of RPPL. The company is the trading arm for packing boxes (rigid boxes) for mobile handsets. Manufacturing takes place in Replika Press Pvt. Ltd. and then it is sold through Replika Packaging Pvt. Ltd.
RPPL was set up in 1995, by the Sonipat (Haryana)-based promoter, Mr Bhuvnesh Seth and his family members. The Seth family has been in the printing industry for the past six decades through Rajkamal Press. RPPL provides type-setting, prepress, printing, and post-press services to national and international book publishers. The group owns three plants at Kundli Industrial Park, Sonipat |
Key Financial Indicators
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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. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' 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. | |||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | |||||||||
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Criteria Details
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