ICRA Reaffirms Ratings for Ever Electronics Private Limited Despite Weak Financial Performance

Ever Electronics Private Limited's long-term rating has been reaffirmed at [ICRA]B (pronounced ICRA B) by ICRA, a leading credit rating agency. The company's cash credit facility of Rs. 3.00 crore and non-fund-based bank guarantee facility of Rs. 4.75 crore have also been reaffirmed at [ICRA]B and [ICRA]A4, respectively. The rating reaffirmation considers the company's long-standing experience in the market, its good relationship with customers, and the expansion of its product portfolio, which has led to improved revenue performance. However, the company's reliance on a single major client, LG Electronics India, and its weak operating profitability and net losses continue to pose significant risks.

Key Takeaways:

ICRA has reaffirmed the long-term rating of Ever Electronics Private Limited at [ICRA]B, considering the company's long-standing experience and good relationship with customers.
The company's cash credit facility of Rs. 3.00 crore and non-fund-based bank guarantee facility of Rs. 4.75 crore have also been reaffirmed at [ICRA]B and [ICRA]A4, respectively.
The rating reaffirmation takes into account the company's expansion of product portfolio, which has led to improved revenue performance.
The company's reliance on a single major client, LG Electronics India, and its weak operating profitability and net losses continue to pose significant risks.
ICRA notes that the company has been making efforts to diversify its customer base, but the extent of diversification remains marginal at present.
The company's holding company was taken over by new management in December 2013, which has resulted in the addition of new products to the portfolio.

Statistics:

The rating of Ever Electronics Private Limited applies to its term loan facilities of Rs. 19.25 crore* (reduced from Rs. 20.75 crore) and cash credit facility of Rs. 3.00 crore.
The non-fund-based bank guarantee facility of Rs. 4.75 crore (enhanced from Rs. 3.25 crore) has also been reaffirmed at [ICRA]A4.
The company's revenue performance has improved due to the expansion of its product portfolio.
The company's capital structure and coverage indicators have been weakened by operating losses and net losses.

Sources:

ICRA. (n.d.). Rating Action: Ever Electronics Private Limited. Retrieved from http://www.icra.in/.