| Technova Imaging Systems Private Limited | ||||||
| Ratings Reaffirmed | ||||||
| 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 A2’ ratings on the bank loan facilities of Technova Imaging Systems Private Limited (TISPL).
The revenue grew by 35% y-o-y in half year fiscal 2023 supported by healthy growth in both volumes and realization; operating income expected to grow by 13-15% for full year fiscal 2023. This follows healthy revenue growth of 38% in fiscal 2022 supported by opening of markets after Covid driving the volume growth. The margins continued to be impacted due to high commodity prices in both fiscal 2022 and half year fiscal 2023. The margins are expected to improve over the near term with stabilization of commodity prices and the pricing flexibility enjoyed by the group. Moreover, the group continues to benefit from its diversified customer base established over the past three decades. The clientele includes major players in the printing and publishing industry and in the un-organised sector.
The financial risk profile remains healthy reflected by a healthy TOL/ TNW of less than 1 and interest coverage of more than 10 times as of September 30, 2022, expected to remain in the same range in the medium term.
The ratings continue to reflect the Technova group’s strong market position in the domestic printing consumables industry, and its strong financial risk profile. These strengths are partially offset by exposure to volatility in raw material prices, fluctuations in foreign exchange (forex) rates and dependence on ADD amid threat from cheaper imports. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of TISPL and its associate company Lastra Niraj Pvt Ltd (LNPL) as they are in similar businesses and have strong operational and financial linkages. The two companies, collectively referred to as the Technova group, have common promoters and marketing network, and operate in the same line of business.
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:
In fiscal 2023, the company saw an increase in fund-based utilization, with balance as of September 30, 2022, being Rs 80 Crs due to change in suppliers credit terms. However, the company plans on reducing that by June 2023. Despite the short term working capital, the overall capital structure and debt protection metrics remain more than comfortable.
Weaknesses:
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Liquidity: Adequate Liquidity is supported by expected annual cash accrual of Rs 50-70 crore over the medium term, and cash and bank balance of over Rs 40 crore as on September 30, 2022. Fund-based limit remained utilised around 50% over the last 6 months through January 2022. CRISIL Ratings believes that the company’s cash accrual and cash and equivalents would more than suffice to meet its working capital as well as planned capex requirements over the medium term. |
Outlook: Stable CRISIL Ratings believes that the Technova group would continue to benefit from its market leadership position in the industry and the gradual improvement in its operating performance. Moreover, strong financial risk profile would also support the group’s credit risk profile. |
Rating Sensitivity factors Upward factors:
Downward factors:
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About the Group TISPL was founded by Mr Pranav Parikh in 1971. The company is a prominent manufacturer of printing consumables. Its products include offset printing plates, printing chemicals, digital print media, and related items. LNPL manufactures analogue offset printing plates on job-work basis for TISPL. |
Key Financial Indicators - Consolidated
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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This Annexure has been updated on 02-Mar-23 in line with the lender-wise facility details as on 02-Aug-21 received from the rated entity.
Criteria Details
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