ICRA Nepal assigns A3+ to short term loans of MAW Enterprises; Lang track record major strength
Thu, Feb 13, 2020 11:40 AM on Credit Rating, Latest, Stock Market,
ICRA Nepal has assigned a short-term rating of [ICRANP] A3+ (pronounced ICRA NP A three plus) to the short-term loans (including non-fund based limits) of M.A.W. Enterprises Private Limited (MAW).
Credit strengths
- Long track record and improving market presence
- Healthy sales growth and sizeable revenue base
- Comfortable financial profile
- Financial flexibility as part of M.A.W. Group
Credit challenges
- Intense competition and high dependence on a few models
- Working capital intensive operations
- Increased taxes, revised financing norms and high borrowing rates could impact PV segment growth, creating pressure on 2W segment to maintain growth momentum
About the company
Established in 1965 as a private firm and converted in 2011 to a private limited company, M.A.W. Enterprises Private Limited (MAW) is the authorised dealer of Yamaha 2Ws and Skoda PVs in Nepal (since 1975 and 2007, respectively). Its registered office is in Biratnagar, Morang with two self-owned showrooms (one for each brand) in Kathmandu and 88 regional dealerships (85 outlets for 2Ws and the rest for PVs) across the country. The company is a part of the M.A.W. Group, which has operations across various trading and financial services sectors in Nepal. As of now, the company’s shares are held by three members of the Agarwal family. Mr. Vishnu Kumar Agarwal is the Managing Director of MAW as well as most Group companies.
Key financial indicators
|
|
FY2016 (Audited) |
FY2017 (Audited) |
FY2018 (Audited) |
FY2019 (Provisional) |
|---|---|---|---|---|
|
Operating income (OI; NPR million) |
5,742 |
7,586 |
8,451 |
10,477 |
|
OPBDITA/OI (%) |
6.1% |
6.1% |
5.9% |
6.2% |
|
Total debt/Tangible net worth (TNW; times) |
1.81 |
1.29 |
1.17 |
1.39 |
|
Total outside liabilities/TNW (times) |
2.33 |
1.53 |
1.34 |
1.57 |
|
Total debt/OPBDITA (times) |
3.39 |
2.80 |
2.58 |
2.85 |
|
Interest coverage (times) |
5.00 |
3.83 |
2.67 |
2.73 |
|
DSCR (times) |
4.27 |
3.65 |
2.49 |
2.55 |
|
Net working capital/OI (%) |
24% |
23% |
22% |
25% |
Source: Company data
Instrument details
|
Instrument |
Limit (Amount in NPR Million) |
Rating Action |
|---|---|---|
|
Non-fund based facilities; Short term |
|
|
|
Letter of credit - LC |
140 |
ICRANP] A3+ |
|
LC (within funded limits) |
(2,460) |
ICRANP] A3+ |
|
Bank guarantee – BG |
20 |
ICRANP] A3+ |
|
BG (within funded limits) |
(10) |
ICRANP] A3+ |
|
Total non-fund based (A) |
160 |
|
2 50% introduced in March 2017 vs no caps earlier; later moderated to 65% in August 2017 and reduced to 50% from October 2018
|
Instrument |
Limit (Amount in NPR Million) |
Rating Action |
|---|---|---|
|
Fund-based facilities; Short term |
|
|
|
Trust receipt loans/ Short-term loans/ Overdraft |
3,040 |
ICRANP] A3+ |
|
Total fund-based (B) |
3,040 |
|
|
|
|
|
|
Grand total (A+B) |
3,200 |
|
Source: https://www.icranepal.com/
