| Vallabhji Malsi and Co. | ||||
| Rating reaffirmed at 'Crisil A-/Stable' | ||||
| 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 rating on the long term bank facilities of Vallabhji Malsi and Co. (VMC; part of the Vallabhji group) at ‘Crisil A-/Stable’.
The ratings continue to reflect the group’s extensive experience in the jewellery industry and healthy market position, efficient working capital management and healthy financial risk profile. These strengths are partially offset by susceptibility of operating margin to volatility in gold prices, to foreign exchange (forex) rates and exposure to intense competition and regulatory changes in the gold jewellery industry. |
Analytical Approach For arriving at its ratings, Crisil Ratings has combined the business and financial risk profiles of VMC and Antara Jewellery Pvt Ltd (Antara; rated 'Crisil A-/Stable'). This is because both these entities, together referred to as the Vallabhji group, have the same promoters, are in a similar line of business, and have fungible cash flow.
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:
On the back of the experience of the promoters in the jewelry industry and strong brand image, Vallabhji group is expected to achieve revenue above Rs 1700 crore in fiscal 2025. Benefits from the extensive industry experience of the promoters would continue over the medium term.
Weaknesses:
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Liquidity: Adequate Liquidity is adequate to meet the repayment obligations toward covid loan availed supported by steady realization of debtors and moderate bank limit utilization. Bank limit utilization is moderate at around 59 percent for the past twelve months ended February 2025. The current ratio is healthy at 3 times on March 31, 2024. The promoters are likely to extend support in the form of equity and unsecured loans to meet its working capital requirements and repayment obligations. Moderate cash and bank balance of around Rs.11.03 crore on as on March 31, 2024. Low gearing and healthy net worth support its financial flexibility and provides the financial cushion available in case of any adverse conditions or downturn in the business. The group’s working capital cycle is supported by low debtors while inventory continues to remain moderate. |
Outlook: Stable Crisil Ratings believes the Vallabhji group’s business risk profile will continue to benefit from the promoters’ extensive experience and healthy relationships with customers |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Group VMC was set up as a partnership firm in 1981 by the Gala family. The firm manufactures and exports plain gold and diamond-studded gold jewellery. Major partners are Mr Ankit Gala, Mrs. Nutan Gala, Mr. Mayank Gala, Mr. Bharat Nagda.
Antara, set up in 2006, retails plain gold and diamond-studded gold jewellery. The company has two showrooms at Dadar and Borivali in Mumbai. |
Key Financial Indicators
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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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Criteria Details
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