| Sai Point Cars Private Limited | ||||||
| Revised from 'CRISIL C/CRISIL A4' to 'CRISIL D/CRISIL D' and simultaneously upgraded to 'CRISIL C/CRISIL A4’ | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has revised its ratings on the bank loan facilities of Sai Point Cars Private Limited (SPCPL) to 'CRISIL D/CRISIL D' from 'CRISIL C/CRISIL A4' and simultaneously upgraded to 'CRISIL C/CRISIL A4'
The revision in ratings to 'CRISIL D/CRISIL D' reflects delay of over 30 days in repayment of Inventory Funding facility bill due in the month of February 2020. Simultaneous upgrade however reflects timely debt servicing along with no irregularities in over past 4 months.
CRISIL has also taken into cognizance, moratorium granted by the bank in servicing of interest on working capital facility and term loan as well as its principal repayment, as permitted by the Reserve Bank of India (RBI).
The ratings continues to reflect the company’s below-average financial risk profile and modest scale of operations. These weaknesses are partially offset by the extensive experience of the promoter in the automobile dealership industry. |
Analytical Approach Company had unsecured loans of Rs 6 crore as on March 31, 2020, of which Rs 5 crore have been treated as neither debt nor equity as these are expected to remain in business over the medium term. |
Key Rating Drivers & Detailed Description Strengths: * Extensive industry experience of the promoter: The promoter has been in the automobile dealership industry for about a decade through a group company. Over the years, SPCPL has built a strong relationship with its principal supplier, Maruti Suzuki India Ltd (MSIL; 'CRISIL AAA/Stable/CRISIL A1+'), India's largest car manufacturer. SPCPL has two showrooms.
Weakness: * Below-average financial risk profile: Low networth and high total outside liabilities to adjusted networth ratio (Rs 2.58 crores and 5.48 times, respectively, as on March 31, 2020) along with weak interest coverage of 0.62 time for fiscal 2020 represent below average financial risk profile of the company. |
Liquidity: Poor Liquidity is poor as indicated by reliance on promoters fund support to meet term debt obligation of Rs 0.6-1.7 crores over the medium term. Company is expected to continue generate PAT losses. Bank limit utilization is moderate at around 79.08 percent for the past twelve months ended 30th September 2020. Unsecured loans from promoters to tune of Rs 5 crore are expected to continue to support the liquidity of the company. Current ratio is low at 0.73 times on March 31, 2020. Company has also availed COVID emergency line of credit to tune of Rs 3.82 crore. |
Rating Sensitivity factors Upward factors * Sustained increase in revenue and profitability, leading to adequate accrual of Rs 1-2 crore to meet debt obligation * Significant rise in accrual or equity infusion, strengthening the financial risk profile particularly interest coverage ratio
Downward factors * Stretch in working capital cycle or further decline in profitability * Inability of the promoter to extend unsecured loans on time, weakening the liquidity and leading to delay in meeting debt obligation |
About the Company SPCPL was set up in 2008 by Mr Dilip Patil and commenced commercial operations in fiscal 2011. The company is an authorised dealer for MSIL in Salcette, Goa. It also deals in spare parts and provides workshop facilities for MSIL’s vehicles. |
Key Financial Indicators
*Provisional |
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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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||
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