ICRA Assigns B+ Rating to Shri Tulsi Oil Products' Fund-Based Limits

Strategic Insights -

Shri Tulsi Oil Products, a partnership firm engaged in the oil manufacturing industry, has been assigned a long-term rating of ICRA B+ by ICRA. The assigned rating takes into account the firm's established track record and easy availability of raw material. However, the rating is constrained by the highly competitive and limited value-additive nature of the cotton oil industry, which affects the firm's modest scale of operations and profitability indicators. Additionally, the firm's profitability is exposed to fluctuations in prices of raw material, and the partnership firm structure poses risks of capital withdrawals and regulatory risks.

Key Takeaways:

  • ICRA assigned a long-term rating of ICRA B+ to Shri Tulsi Oil Products' fund-based limits of Rs. 5.50 crore.
  • The rating takes into account the firm's established track record and easy availability of raw material.
  • The rating is constrained by the highly competitive and limited value-additive nature of the cotton oil industry.
  • The firm's profitability indicators are modest due to its modest scale of operations.
  • The firm's profitability is exposed to fluctuations in prices of raw material.
  • The partnership firm structure poses risks of capital withdrawals and exposure to regulatory risks.
  • The firm's financial profile is moderate, characterized by moderate coverage and capitalization indicators.
  • The firm reported a Profit After Tax (PAT) of Rs. 0.60 crores on operating income (OI) of Rs. 23.74 crores in FY15.
  • The firm derived 80% of its revenues from cotton oil cake and 20% from cotton oil in FY15.

Statistics:

  • Fund-based limits: Rs. 5.50 crore
  • Long-term rating: ICRA B+
  • Established track record: 7 years (since 2007-2008)
  • Revenue-sharing ratio: 80% from cotton oil cake, 20% from cotton oil
  • Profit After Tax (PAT): Rs. 0.60 crores (FY15)
  • Operating Income (OI): Rs. 23.74 crores (FY15)

Sources:

  • ICRA Limited. Assigns ICRA B+ rating to Shri Tulsi Oil Products' fund-based limits (2015).
  • ICRA Limited. Rating Methodology - Long-term Ratings for Fund-based Facilities (Date Unknown).
  • ICRA Limited. Publication summary - Shri Tulsi Oil Products' Fund-Based Limits (May 2015).