| Triton Valves Limited | ||||||
| Rated amount enhanced | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its 'CRISIL BBB+/Stable/CRISIL A2' ratings on the bank facilities of Triton Valves Ltd (Triton).
Triton’s revenues grew by 7% on-year to Rs. 230 crores in fiscal 2021, mainly on account of healthy demand recovery in the auto segment in second half of fiscal 2021. Operating margin were stable at around 11% in fiscal 2021, due to higher absorption of fixed expenses. Operating performance was impacted due to second wave of the pandemic and lockdown restrictions in the first quarter of fiscal 2022, resulting in revenues of Rs. 65 crores and operating margin of 7%. Operating margin was lower on account of increase in raw material prices, supply disruption of industrial oxygen and gestation period in ramp-up of operations of the subsidiaries.
Triton’s subsidiaries, TritonValves Future Tech Pvt Ltd and TritonValves Climatech Pvt Ltd started operations from the last quarter of fiscal 2021. The ramp-up in operations and expected healthy demand from auto sector is expected to support healthy revenue growth over the medium term. Operating margins are expected to remain at 9% in fiscal 2022, given the rising prices of key raw materials like copper and brass.
Financial risk profile remains adequate with interest cover expected at over 2 times and gearing to remain less than 1.5 time in the medium term, and sufficient accruals to meet repayment obligations. Further liquidity is supported by unutilised bank lines and forthcoming promoter support.
The ratings continue to reflect Triton’s established market position in the domestic automobile tube valves and cores segment, and adequate financial risk profile. These strengths are partially offset by the company’s moderate scale of operation, and susceptibility to volatile commodity prices and fluctuations in forex rates. |
Analytical Approach CRISIL Ratings has consolidated the business and financial risk profiles of Triton and its subsidiaries: Triton Valves Hongkong Ltd (incorporated in November 2018) and two wholly owned subsidiaries set up in fiscal 2020 namely, TritonValves Future Tech Pvt Ltd and TritonValves Climatech Pvt Ltd.
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
Weaknesses
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Liquidity: Adequate Cash accrual of over Rs 18-20 crore per annum expected over the medium term will be adequate to meet annual debt repayment obligation of Rs 10-12 crore. Fund-based limits has an average utilisation of 55% for past 12 months ending July 31, 2021. The company is expected to undertake capex of about Rs 15 crore in fiscal 2022 which will be partly debt funded. Liquidity also benefits from access to promoter support in the form of unsecured loans as demonstrated in the past. |
Outlook: Stable CRISIL Ratings believes that Triton will continue to benefit from its established relationship with tyre manufacturers and steady long term demand prospects. Besides steady accruals and access to timely promoter support in case of financial exigencies will continue to benefit financial risk profile and liquidity. |
Rating Sensitivity factors Upward Factors
Downward Factors
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About the Company Triton, incorporated in 1976, manufactures valves and cores that are used in automobile tyre tubes. The company was set up by Mr M V Gokarn and is currently managed by his son, Mr Aditya Gokarn (managing director). The promoters hold 50.5% equity in the company. Triton supplies to almost all major tyre manufacturers in India, and has maintained its leadership position for over a decade.
In the first quarter ended June 30, 2021, net profit was Rs -0.78 crore on net sales of Rs 65 crore vis-à-vis Rs -2.50 crore and Rs 30 crore, respectively, in the previous corresponding period. |
Key Financial Indicators
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
*Interchangeable with of CC Rs 10 crore |
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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