Rating Rationale
April 17, 2025 | Mumbai
Silver Star Exports
Rating reaffirmed at 'Crisil BBB/Stable'
 
Rating Action
Total Bank Loan Facilities RatedRs.15 Crore
Long Term RatingCrisil BBB/Stable (Reaffirmed)
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil BBB/Stable’ rating on the long-term bank facility of Silver Star Exports (SSE; part of the Silver Star group).

 

The rating continues to reflect the established market position of the group, driven by the extensive experience of the partners in the seafood industry, the firm’s geographically diversified customer base and moderate financial risk profile. These strengths are partially offset by average scale of operations and exposure to volatility in input cost and foreign exchange (forex) rates and industry-specific risks.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of SSE and Amrut Cold Storage Pvt Ltd (ACSPL). This is because both these entities, together referred to as the Silver Star group, are in the same industry and have operational and financial linkages.

 

Unsecured loan of Rs 1.66 crore as on March 31, 2025, extended by the partners has been treated as debt based on its past track record.

 

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 extensive experience of the partners: The two-decade experience of the partners in the seafood value chain and the established market position of the Silver Star group will continue to support the business. The group is one of the largest seafood players in Gujarat with a consistent market share of 2.0-2.5% in seafood exports from India. Ability of the group to sustain its market share and profitability will remain monitorable.

 

  • Diversified revenue base, ensuring low geographical and customer concentration risks: The group caters to a geographically diversified customer base. As business with China and Vietnam declined post the Covid-19 pandemic, the group has increased its focus towards Europe, Japan, UAE, Russia and other South Asian countries, which now constitute bulk of the business. Moreover, no customer accounts for more than 20% of sales, thereby reducing vulnerability to any country or customer.

 

  • Moderate financial risk profile: The financial risk profile should remain supported by the absence of any large, debt-funded capital expenditure. Estimated networth was Rs 38.43 crore and estimated gearing was 0.45 time as on March 31, 2025. Debt protection metrics may continue to be robust with estimated interest coverage ratio of over 5.17 times in fiscal 2025.

 

Weaknesses:

  • Average scale of operations: Despite being the market leader and operating for over two decades, the scale of operations is likely to remain average amid muted global demand and intense competition. Revenue of the Silver Star group increased to Rs 183.90 crore in fiscal 2024 from Rs 136.53 crore in fiscal 2023 and is estimated at 190-195 crore in fiscal 2025.

 

  • Vulnerability to volatility in raw material prices and forex rates: Marine products have a shelf life of more than a year and the group stocks inventory, depending on the local prices and prevalent market conditions. Fish and other marine products are sourced from fishermen and agents located across Gujarat and Maharashtra. Prices depend on the catch size and supply; the group is thus exposed to volatility in the cost of marine products. Moreover, as the group derives its revenue mainly from exports, it remains vulnerable to fluctuation in forex rates.

 

  • Exposure to risks inherent in the seafood industry: The seafood processing and export industry has several small players operating across the coastal belt of India. Competition from Thailand, Malaysia and Indonesia has increased over the years as the countries take advantage of their marine resources. The industry also remains susceptible to adverse seasonal conditions, outbreak of diseases and stringent hygiene standards imposed by the exporting nations.

Liquidity: Adequate

Bank limit utilisation was at 65% on average for the 12 months through February 2025. In the absence of any yearly maturing debt over the medium term, annual cash accrual expected at Rs 5-6 crore should aid financial flexibility. Estimated current ratio stood healthy at 1.61 times as on March 31, 2025. The partners are likely to extend timely, need-based funds (equity and unsecured loans) to support liquidity.

Outlook: Stable

The Silver Star group will continue to benefit from the extensive experience of the partners and its established market position and comfortable financial risk profile.

Rating sensitivity factors

Upward factors:

  • Substantial and sustainable increase in revenue and profitability, leading to cash accrual above Rs 10 crore
  • Significant improvement in the working capital cycle

 

Downward factors:

  • Higher-than-expected capital withdrawal, weakening the total outside liabilities to adjusted networth ratio to over 1.5 times
  • Further delay in infusion of funds
  • Steep decline in revenue or operating margin, resulting in lower-than-expected cash accrual

About the Company

SSE was set up in 2008 by the partner, Kamlesh Jungi. Until 2009, the firm was a merchant exporter of marine products; however, it set up its own processing unit in fiscal 2010 at Porbandar, Gujarat.

 

ACSPL, based in Veraval (Gujarat), exports marine products to European countries. The Jungi brothers acquired ACSPL in 2000.

Key Financial Indicators

As on/for the period ended March 31

(Consolidated)

Unit

2024

2023

Operating income

Rs crore

183.90

136.53

Reported profit after tax (PAT)

Rs crore

3.67

2.46

PAT margin

%

4.43

4.15

Adjusted debt/adjusted networth

Times

0.80

0.41

Interest coverage

Times

5.91

6.44

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 and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Export Packing Credit NA NA NA 15.00 NA Crisil BBB/Stable

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Silver Star Exports

Full

Operational and financial linkages

Amrut Cold Storage Pvt Ltd

Full

Operational and financial linkages
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 15.0 Crisil BBB/Stable   -- 19-01-24 Crisil BBB/Stable   -- 03-11-22 Crisil BBB+/Stable --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Export Packing Credit 15 State Bank of India Crisil BBB/Stable
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)
Criteria for consolidation

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