Rating of LBB and A4+ assigned to Nandan Ghee and Oil Industries; Company part of the Begani Group with operations across various manufacturing and financial service sectors in Nepal
Wed, Feb 19, 2020 12:38 PM on Credit Rating, Latest,
ICRA Nepal has assigned a long-term rating of [ICRANP] LBB (pronounced ICRA NP L double B) to the long-term loans of Nandan Ghee and Oil Industries Private Limited (Nandan). ICRA Nepal has also assigned the short-term rating of [ICRANP] A4+ (pronounced ICRA NP A four plus) to the short-term loans (including non-fund-based limits) of Nandan.
Credit strengths
- Long track record of operations and experienced promoters
- Stable demand outlook
- Steady growth in business revenues
Credit challenges
- Modest financial profile with high gearing and modest coverage indicators
- Intense competition amid low entry barriers
- Excessive inventory levels of crude palm oil pressurising working capital intensity and margins
- Complete reliance on imports for raw materials, exposure to associated forex risk
- Exposure to regulatory risk
About the company
Established in 1994, Nandan Ghee and Oil Industries Private Limited (Nandan) is the producer/refiner of various types of edible oil such as sunflower, soybean, palm-oil, mustard oil as well as vegetable ghee under the brands Nandan, Suruchi and Sun Moon. Its registered office is in Naxal, Kathmandu with its factory located in Simara, Bara. The company is part of the Begani Group, which has operations across various manufacturing and financial service sectors in Nepal. As of now, the company’s shares are held solely by Mr. Kamal Kumar Begani, who is the company’s Chairman.
Key financial indicators
|
Amount in NPR million |
|
Audited |
|
|
|---|---|---|---|---|
|
FY2016 |
FY2017 |
FY2018 |
FY2019 |
|
|
Operating Income |
1,437 |
2,085 |
2,348 |
3,435 |
|
Non-operating income (VAT Refund) |
90 |
105 |
103 |
0 |
|
OPBDITA/OI (%) * |
10.11% |
5.32% |
5.58% |
11.86% |
|
PAT/OI (%) |
5.61% |
1.36% |
0.67% |
7.42% |
|
Gearing (times) # |
13.48 |
9.33 |
9.20 |
2.89 |
|
OPBDITA/Interest (times) * |
5.59 |
1.60 |
1.62 |
5.20 |
|
DSCR (times) |
4.68 |
1.44 |
1.22 |
3.82 |
|
NWC/OI (%) |
55% |
39% |
40% |
34% |
|
Total Outside Liabilities/TNW (times) # |
13.92 |
9.87 |
9.67 |
3.32 |
|
Total Debt/OPBDITA (times) * |
3.17 |
5.89 |
3.84 |
2.59 |
# TNW here excludes capital reserve of ~NPR 53 million created through revaluation of land.
*including the VAT refunds as operating income received by the company in FY2016, FY2017 and FY2018.
Instrument details
|
Instrument |
Limits (NPR million) |
Ratings |
|---|---|---|
|
Fund-based facilities; Long term loans |
|
|
|
Hire Purchase |
0.48 |
[ICRANP] LBB |
|
Instrument |
Limits (NPR million) |
Ratings |
|
Term Loan I |
65.00 |
[ICRANP] LBB |
|
Term Loan II (Bridge Gap - Within LC) |
(200.00) |
[ICRANP] LBB |
|
Total Existing Fund-based-Long term (A) |
65.48 |
|
|
Fund-based facilities; Short term loans |
|
|
|
Cash Credit |
10.00 |
[ICRANP] A4+ |
|
Overdraft |
47.50 |
[ICRANP] A4+ |
|
Trust receipt loan |
70.00 |
[ICRANP] A4+ |
|
Trust receipt loan/ Demand Loan |
140.00 |
[ICRANP] A4+ |
|
Cash Credit/ Demand Loan/ Short Term loan (within non-funded limits) |
(470.00) |
[ICRANP] A4+ |
|
Trust receipt loan/ Demand Loan (within non-funded limits) |
(1,307.50) |
[ICRANP] A4+ |
|
Total Existing Fund-based-Short term (B) |
267.50 |
|
|
Non-fund-based facilities; Short term |
|
|
|
Letter of Credit/ Bank Guarantee |
1,706.50 |
[ICRANP] A4+ |
|
Letter of Credit (Within funded limits) |
(140.00) |
[ICRANP] A4+ |
|
Total Existing Non-fund-based-Short term (C) |
1,706.50 |
|
|
Grand total (A+B+C) |
2,039.48 |
|
Source: https://www.icranepal.com/
Read the full report here.
