| Somi Conveyor Beltings Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB- / Stable / Crisil A3 '; Rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
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| 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/Crisil A3’ ratings on the bank facilities of Somi Conveyor Beltings Ltd (SCBL).
The ratings continue to reflect the extensive experience of the promoters and well-established customer base in the conveyor belt industry, and comfortable financial risk profile. These strengths are partially offset by the moderate scale of operations and working capital-intensive operations. |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of SCBL. |
Key Rating Drivers - Strengths Extensive experience of the promoters and well-established customer base: The four-decadelong experience of the promoters in the conveyor belt industry, their strong understanding of market dynamics, and healthy relationships with suppliers and customers, should continue to support the business risk profile. Longstanding relationships with reputed players such as NTPC, NLC India, Maharashtra State Power Generation Company, Bharat Heavy Electricals Ltd, among others, have enabled the company to become a prominent vendor for government undertakings. Revenue has grown by compounded annual growth rate of over 21% to Rs 101 crore in fiscal 2025 and expected to grow over medium term at 15-20% annually, driven by both volume and spike in realisations. Robust demand from end-user industries such as infrastructure, mining and ports, has ensured healthy order inflow.
Comfortable financial risk profile: The financial risk profile is marked by healthy capital structure and debt protection metrics. Networth is likely to grow to Rs 80-86 crore as on March 31, 2026 (Rs 76.52 crore as on March 31, 2025). Gearing should also remain healthy at 0.35-0.4 time as on March 31, 2026, in the absence of any major debt-funded capital expenditure (capex) plans. Debt protection metrics are moderate, as reflected by interest coverage ratio of 5.50 times in fiscal 2025; the ratio is likely to remain stable at 4-5 times over the medium term. With no major capex plans, the financial risk profile should remain healthy over the medium term. |
Key Rating Drivers - Weaknesses Moderate scale of operations: Revenue has grown at a compound annual rate of 21% over the three fiscals ended March 31, 2025, but likely to remain moderate. Demand for conveyor belts remains vulnerable to economic cycles and capex cycles. Also, scalability depends on sustenance of the order inflow. Orders worth Rs 85.5 crore, to be executed within the same fiscal, and other orders in the pipeline will fuel growth and provide revenue visibility. Crisil Ratings believes, successful buildup of orderbook and its timely execution leading to sustained growth in its revenue will remain a key monitorable.
Large Working capital requirements: Gross current assets (GCAs) were high at 299 days as of March 31, 2025, driven by large receivables of 140 days due to retention money and higher sales booked in the last quarter of the fiscal year, particularly in March. The company maintains a large inventory, as the business mandates a sizeable work-in-process and inventory. It held inventory of 154 days as of March 31, 2025, compared to 135 days a year earlier, as raw materials have to be sourced in advance and due to stock buildup. Although bank lines were utilized at just 66% in the last 12 months ended July 2025, some months witnessed more than 80% utilization. A moderate cushion in the working capital limits exposes the company to the risk of liquidity challenges in the event of any unanticipated weakening in the business risk profile or further stretch in the working capital cycle. GCAs are expected to remain in the range of 270-290 days over the medium term. Any further increase in working capital leading to moderately high dependence on bank lines, can weaken the company's overall credit risk profile and will remain a key rating sensitivity factor. |
Liquidity: Adequate Bank limit utilisation was low, averaging around 66% for the 12 months ended July 2025. Expected cash accrual of Rs 8-9 crore should more than suffice to meet the term debt obligation of Rs 0.8-1 crore over the medium term. Current ratio was healthy at 2.03 times as on March 31, 2025. Low gearing and moderate networth offer financial flexibility to withstand adverse conditions or downturn in the business. |
Outlook: Stable SCBL will continue to benefit from the extensive experience of its promoters in the conveyor belt industry and their established relationships with clients. |
Rating Sensitivity Factors Upward Factors
Downward Factors
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About the Company SCBL manufactures rubber and steel-based conveyors. The company has two manufacturing facilities at Sangaria and Tanwara, both in Jodhpur (Rajasthan). Operations are managed by the promoter, Mr OP Bhansali and his family members. |
Key Financial Indicators
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Status of non cooperation with previous CRA SCBL has not cooperated with CARE Ratings Ltd which led to its classification as ‘Issuer not cooperative’ through their releases dated March 28, 2022. The reason provided by CARE Ratings Ltd is non-furnishing of information for monitoring of ratings. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
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 Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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Criteria Details
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