| Vashi Integrated Solutions Limited | ||||||
| Ratings reaffirmed at 'CRISIL A-/Positive/CRISIL A2+'; rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings on bank facilities of Vashi Integrated Solutions Limited (VISL; erstwhile Vashi Electricals Private Limited; part of the Vashi group) continues to reflect the group’s strong position providing integrated solutions toward supply of various products and extensive experience of its promoters. The ratings also factor in a healthy financial risk profile marked by comfortable capital structure and debt protection metrics. These strengths are partially offset by the working capital-intensive operations, high geographic concentration in revenue, and susceptibility to cyclicality in end-user industries.
CRISIL Ratings vide its rationale dated July 7, 2022 had revised its outlook to ‘Positive’ from ‘Stable’ on long term bank facilities of VISL and had reaffirmed rating at ‘CRISIL A-’. Short term rating was reaffirmed at CRISIL A2+.
The revision in outlook reflected expectation of sustained improvement in both the business risk profile and financial risk profile of company, over the medium term. Group’s revenue have grown at healthy compounded annual growth rate of around 14% over past 5 years through fiscal 2022 with steady operating margin. Group is estimated to have generated a revenue of around Rs 1063 crore with an operating margin of around 5.7% in fiscal 2022 as against reported revenue of around Rs 850 crore in fiscal 2021. Group’s presence in diverse segments and products, backed by healthy demand and a shift in the industry towards organised players, coupled with its established relations with key stakeholders and an integrated solutions driven business strategy should continue to support improvement in operating performance. Consequently, financial risk profile as well as liquidity is expected to further improve with better accretion to reserves. |
Analytical Approach The business and financial risk profiles of VISL and its joint venture (JV) companies - Techno Products Development Pvt Ltd (Techno), Purva Vashi Electricals Pvt Ltd (Purva), Vashi Electricals & AS Bearing Pvt Ltd (VashiASB) and Midex Vashi Marketing Pvt Ltd (Midex) have been consolidated. All four companies, collectively referred to as the Vashi group, are in the same business, have significant business synergies, and VISL has management control over them.
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 Net cash accrual, estimated at above Rs 40 crore over the medium term against repayment obligations of Rs 4 crore per annum. Group has no major debt funded capex. Operations are working capital intensive and funded partially by bank lines. Bank limit utilisation has been moderate at around 43.6% on an average during the past 12 months through March 2022. Current ratio is comfortable estimated at above 3 times as on March 31st, 2022, and likely to be sustained over the medium term. Support from promoters is also available in case of any exigency. |
Outlook: Positive CRISIL Ratings believes the Vashi group business risk profile will exhibit steady improvement supported by its established position in the trading business, experience of its promoters and healthy relationship with its principals and clients |
Rating Sensitivity factors Upward factors:
Downward factors:
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About the Group The Vashi group trades in electrical equipment such as cables, motors, gearboxes, and switchgears. VISL was originally set up by Mr Madan Dodeja and Mr Mohan Dodeja as a partnership firm in 1978; the firm was reconstituted as a private limited company in 1990. The company has its branches in Gurugram, Bengaluru, and Vadodara, (Gujarat) while it has a presence in Tamil Nadu, West Bengal, and Indore through partnerships with other companies.
Techno, based in Tamil Nadu, is a JV between VISL and Mr Murali Srinivasan. Purva, based in West Bengal, is a JV between VISL, Priyanka Goods (P) Ltd, and Gagam Tradecom (P) Ltd. Midex, based in Indore (Madhya Pradesh), is a JV between VISL, Mr Manish Khandelwal and Mr Rajesh Khandelwal. Vashi ASB is a JV between VISL and AS Bearing Company based in Chandigarh. |
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)
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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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This Annexure has been updated on 28-Jul-22 in line with the lender-wise facility details as on 02-Aug-21 received from the rated entity.
Criteria Details
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