ICRA Nepal assigned A4+ ratings to Rs 414.1 crore loan of HIM Electronics
Fri, Jul 10, 2020 2:15 PM on Credit Rating, Latest,
ICRA Nepal has assigned the short-term rating of [ICRANP] A4+(pronounced ICRA NP A four plus) to HIM Electronics Private Limited (HIM).
The assigned rating factors in HIM’s established track record and its experienced promoters and management team.The rating also takes comfort from HIM’s strong market positioning as one of the two authorised importers and distributors of Samsung brand of handheld devices and home appliances. Strong brand recall of Samsung, HIM’s strong and well diversified distribution network and traction in the local market, augurs well for the future growth of the company. In addition to Samsung, the company also has its own homegrown brand of consumer electronics and electricals (viz. Himstar) that offers segment and revenue diversification to the company. The company has reported healthy growth in revenue in the last three to four years (notwithstanding a marginal decline in growth in FY2019 and expected deterioration over the near term amid the Covid-19 pandemic), on a steady operating profit margin, which is a positive for its future profitability.
Credit strengths
- Established track record and experienced promoters,management team
- Established supply chain, almost exclusive import and distribution rights and strong brand recall of Samsung
- Good revenue growth with diversified customer base and steady retention of profits
Credit challenges
- Absence of long-term agreement with Samsung Electronics
- High working capital intensity increasing the need for external financing
- High gearing resulting in modest coverage indicators,despite improving operating profit
- Fragmented market and high competition
About the company
HIM Electronics Private Limited (HIM), established in 1988, is one of the leading importers and traders of consumer electronics and home appliances in Nepal. HIM is one of the two authorised importers and distributors of Samsung mobiles,hand-held devices as well as Samsung home appliances and consumer electronics. Secondary product portfolio of Him comprises electricals and small appliances from brands such as Bajaj, Indoasian and Osram and Timex watches. HIM also has an assembling unit that produces the Himstar brand of consumer electronics, home appliances and alternative energy equipment such as solar panel and inverters.
HIM is a unit under the Golchha Organisation, a family-owned business conglomerate with investment spanning manufacturing and trading sectors. The major shareholder of the company is Mr. Shekhar Golchha with ~67% shareholding and the remaining stake is held equally by eight members of the Golchha family.
HIM’s distribution and after sales service network comprises four warehouses, over 9000 big and small dealers, 13 company-owned retail outlets and over 40 exclusive service centres spread across the country
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