Long and short term loans of Shubha Shree Jagdamba Cements rated LBB+ and A4+ by ICRA Nepal; Company held by Shankar Group and Saurabh Group’s four individuals
Wed, Mar 4, 2020 1:57 PM on Credit Rating, Latest, Stock Market,
ICRA Nepal has assigned the long-term rating of [ICRANP] LBB+ (pronounced ICRA NP L Double B plus) and the short term rating of [ICRANP] A4+ (pronounced ICRA NP A four plus) to Shubha Shree Jagdamba Cement Mills Private Limited (SSJCM).
Credit strengths
- Experienced promoters/ management; operational synergies could arise from being part of the Saurabh/Shankar Group
- Strong operational profile
- Long track record and established sales channel resulting in high cement sales
- Good demand outlook for cement in the country
Credit challenges
- Moderation in capitalisation and coverage indicators, reduced financial flexibility and pressure on net profitability
- Stretched working capital cycle
- Intense competition
- Vulnerability to cyclicality and seasonal demand
- Risk of regulatory changes
About the company
Incorporated in August 2007, Shubha Shree Jagdamba Cement Mills Private Limited (SSJCM) produces and sells cement, with current installed grinding capacity of 2,400 TPD. The shares of the company are held by four individuals from two business houses of Nepal, namely Shankar Group and Saurabh Group. SSJCM produces Ordinary Portland Cement (OPC) and Portland Slag Cement (PSC). Its factory is located at Chhatta Pipra Chorni-4, Parsa which is ~125 km from Kathmandu.
Key financial indicators
|
|
FY2016 (Audited) |
FY2017 (Audited) |
FY2018 (Audited) |
FY2019 (Audited) |
|---|---|---|---|---|
|
Operating income-OI (NPR million) |
2,479 |
4,233 |
5,554 |
5,909 |
|
OPBDITA/OI (%) |
9% |
9% |
8% |
10% |
|
Total debt/Tangible net-worth-TNW (times) |
1.32 |
1.64 |
2.67 |
2.56 |
|
Total outside liabilities/ TNW (times) |
2.03 |
2.77 |
4.18 |
3.79 |
|
Total debt/OPBDITA (times) |
4.78 |
4.08 |
4.85 |
3.85 |
|
Interest coverage (times) |
3.84 |
3.91 |
3.46 |
1.97 |
|
DSCR (times) |
2.48 |
2.74 |
2.65 |
1.36 |
|
Net-working capital/OI (%) |
56% |
39% |
29% |
30% |
Source: Company data
Instrument Details
|
|
Instrument |
Limit (Amount in NPR Million) |
Ratings |
||||
|---|---|---|---|---|---|---|---|
|
Fund-based, long-term Loans |
|
560 |
[ICRANP] LBB+ |
|
|||
|
|
|
|
|
|
|||
|
Fund-based, short-term Loans |
|
1,970 |
|
|
|||
|
Trust receipt (TR)/Demand loan |
|
880 |
[ICRANP] A4+ |
|
|||
|
Overdraft |
|
190 |
[ICRANP] A4+ |
|
|||
|
Cash Credit (CC) |
|
900 |
[ICRANP] A4+ |
|
|||
|
TR (within CC) |
|
(400) |
[ICRANP] A4+ |
|
|||
|
|
Total fund-based (A) |
2,530 |
|
|
|||
|
|
|
|
|
|
|||
|
Non-fund-based facilities, Short-term |
|
80 |
|
|
|||
|
Letter of credit (Sight + usance) |
|
70 |
[ICRANP] A4+ |
|
|||
|
Bank guarantee |
|
10 |
[ICRANP] A4+ |
|
|||
|
|
Total non-fund based (B) |
80 |
|
|
|||
|
|
|
|
|
|
|||
|
|
Grand total (A+B) |
2,610 |
|
|
|||
Source: https://www.icranepal.com/
Read the full report here.
