output_vijaysales.txt

['1', 'Press Release', 'Vijay Sales (India) Private Limited', 'January  08, 2024', 'Facilities/Instruments  Amount', '(₹ crore)  Rating1 Rating Action', 'Long-term/short-term bank facilities  100.00  CARE A+; Stable/CARE A1+  Reaffirmed', 'Details of instruments/facilities in Annexure -1.', 'Rationale and key rating drivers', 'The rating reaffirmation for the bank facilities of Vijay Sales (India) Private Limited (VSIPL) continues to derive strength', 'from the experienced promoter group with a proven track record of more than four decades of operations in Indian', 'consumer electroni c retail. The rating further derives strength from the continuous improvement in the financial risk', 'profile , aided by robust growth in  cash flow from operating activities and the strong liquidity position as against  the', 'negligible outside liabilities  of the company . Majority of the debt comprises loans and advances from the promoter s', 'that are non -interest bearing and  continues to remain in the business over the last few fiscals. The overall gearing as', 'on March 31, 2023,  stood at 2.30x  (including promoter loans and lease liability ), however, adjusted for the promoter', 'loans, the overall gearing stood at 0.57x.', 'The rating further  considers the model of store ownership, with a total store count of 131 stores, of which 79 being', 'self-owned while 52 being  rented  along with efficient inventory model and working capital management.  During FY23,', '(FY refers to the period from April 01 to March 31), VSIPL  reported a total operating income (TOI)  of ₹7,236 .02 crore', 'as compared to ₹5,400 .55 crore in FY22, recording a year-on-year growth of around 3 4%. The profitability margins', 'continued to remain stable at around 7-7.50% during the last three fiscal s.', 'Going forward , CARE Ratings expects  the growth momentum to continue on account of further expansion of new stores', 'as well improving sales from the existing stores.  During FY22, the company had acquired 28 stores through slump  sale', 'from Tirumala Music Centre , and with further addition of new stores, it plans to increase its presence in South India  as', 'well.', 'However, the rating  strengths  are tempered by the  presence of  large number of organised  and unorganised players', 'dominating the market via online and offline mode. This apart , the sector continues to remain interest rate - and', 'economic cycle -sensitive . Additionally, the business continues to be working capital -intensive, however, comfort is', 'drawn from the fact that most of the working capital is met via  promoter loans and advances , a strong cash balance ,', 'and an added cushion of ₹140 crore vis -à-vis working capital bank facilitie s, which largely remains unutilised .', 'Rating sensitivities: Factors likely to lead to rating actions', 'Positive factors', '• Sustenance of the capital structure at the current levels with overall gearing (including guaranteed debt and', '• excluding unsecured loans from directors  or promoters) below 0.50x .', '• Profit before interest, lease rentals, depreciation and taxation (PBILDT) margin of more than 8% on a', 'sustained basis .', 'Negative factors', '• Increase in operating cycle to over 50 days due to rise in inventory levels .', '• Increase in overall gearing above 1. 00x (excluding loans from directors  or promoters) on  a sustained basis.', '• Significant w ithdrawal of unsecured loans by promoters  or directors , leading to increased dependence on', 'outside debt.', 'Analytical approach:  Standalone', 'Standalone approach after considering the support provided to  Amstrad Consumer India Private Limited (formerly', 'known as  OVOT Private Limited ) in the form of a corporate guarantee  (CG)', '1Complete definition of the ratings assigned are available at www.careedge.in  and other CARE Ratings Ltd.’s publications', '2 CARE Ratings Ltd.', 'Press Release', 'Outlook:  Stable', 'VSIPL benefits from its strong market position (in Maharashtra, Gujarat, Delhi , and Goa) and  brand recognition .', 'The company is expected to sustain its growing operations, strong financial risk profile , and liquidity profile amid', 'healthy cash flow generation from the operations .', 'Detailed description of the key rating drivers:', 'Key strengths', 'Experienced promoter :', 'VSIPL was initially being established by Nanu Gupta itself in 1971, who now has decades of experience in the', 'electronic goods industry. Under his guidance, VSIPL grew as a successful multi brand electronic retail chain. The', 'business , under the guidance of Nanu Gupta , is now  being supported  by his two sons, Nilesh Gupta and Ashish', 'Gupta. Nanu Gupta is in charge of the finance department and sales of LCD  and LED televisions , Nilesh Gupta is', 'in charge of sales of digital devices, human resource and marketing , while Ashish Gupta manages the sales of', 'large appliances.', 'Geographical coverage in Western and Northern India', 'VSIPL current ly holds 131 stores across India, primarily in Mumbai , followed by Delhi and Guj arat. In  the recent', 'past, its presence has evolved in the state of Telangana , mainly  post buying  28 stores from Tirumala Music Centre', 'Pvt Ltd. The m ajority of the revenue of about 50% + is still being driven by Maharashtra itself.', 'The company has an in -house brand called ‘Vise’, which offers a wide range of televisions  and is exclusively', 'available at V SIPL. Amstrad Consumer India Private Limited, formerly known as OVOT Private Limited  and Vijay', 'Sales India Private Limited , is a common promoter holding of Nilesh Gupta and Ashish Gupta. This company sells', 'products primarily  through V SIPL and is engaged in the trading and distribution of consumer durable products  and', 'home appliances such as air conditioners, televisions, washing machines, irons, dryers, etc, which are exclusively', 'available at VSIPL. In FY24, Amstrad Consumer India Private Limited commenced the in -house manufacturing of', 'a few products, mainly washing machines  and air  conditioners . The Vise brand alone contributes about 25% of the', 'total television volumes sold by VSIPL.', 'Incremental size of business with stability in margins', 'After the opening of  the economy post COVID , there had been an increased spending by consumer s primarily on', 'digital electronics , driven by increased  reliance on digital gadgets, increased  consumer spending by way of readily', 'available  cashless  financ ing options and cash back offers, growing population , and the rising desire towards', 'improving the quality of life. The business was mainly driven by smartphones and laptops , contributing  to about', '35-40% of the total sales. However, a notable increase in volumes was  also witnessed in washing machines , LED', 'televisions, and air conditioners . The PBIL DT margin also remained stable at 7.24%  in FY23 (PY: 7.21%).', 'Strong financial risk profile', 'The financial risk profile of the company continues to improve on account of significant accretion of profit s to', 'networth  as against negligible outside liabilities. Majority of the debt comprises of loans and advances from the', 'promoters that are non -interest bearing and continues to remain in the business over the last few fiscals. The', 'overall gearing as on March 31, 2023, stood at 2.30x  (including promoter loans and lease liability), however,', 'adjusted for the promoter loans, the overall gearing stood at 0.57x . The financial risk profile is further aided by', 'strong liquidity position with healthy cash and liquid investments of  ₹257.19 crore as on March 31, 2023.', 'Key weaknesses', 'Competition from organised as well as unorganised market', 'The electronic retail sector is primarily dominated  by organi sed market participants, online retailers, and', 'unorgani sed local shops. Authori sed distributors of electronic goods also counter  competition  to the existing', 'consumer electronic retail stores . Consequently, a competitive environment prevails throughout the industry. This', 'situation ultimately results in customers having significant bargaining power, leaving retailers with minimal profit', 'margins.', 'Stock obsolescence risk', 'Electronic products often have a short life -cycle due to rapid technological advancements  and change in', 'preferences  and trends of the consumers . New and improved models are frequently introduced, leading to the', '3 CARE Ratings Ltd.', 'Press Release', 'obsolescence of older models.  Hence, it becomes necessary for the  electronic retail chains to maintain an optimum', 'inventory level and anticipating the demand via observing the  change in demand pattern , hence there is a constant', 'urge to  stay on toes  to avoid backlogs and  minimise inventory risk at  the same time.', 'Liquidity: Strong', 'The liquidity position of the company remains strong , marked by healthy cash and liquid investments of ₹257.19', 'crore as on March 31, 2023. The  liquidity profile is further enhanced by fund-based working capital facilities of', '₹140 crore, which remains largely  unutilised.  The company has nil  debt repayment  obligation s since majority of', 'the debt comprises loan and advances from  promoters . The current rati o stands at 0.82x with a n operating cycle', 'of 16 days  as on March 31, 2023.', 'Applicable criteria', 'Policy on default recognition', 'Financial Ratios – Non financial Sector', 'Liquidity Analysis of Non -financial sector entities', 'Rating Outlook and Credit Watch', 'Short Term Instruments', 'Retail', 'About the company and industry', 'Industry classification', 'Macro -economic', 'Indicator  Sector  Industry  Basic Industry', 'Consumer discretionary  Consumer durables  Consumer durables  Consumer electronics', 'Established in 1967 by Nanu Gupta, Vijay Sales (VS) is a chain of multi -brand electronic stores. On May 07, 2020,', 'the firm was reconstituted as a private limited company with the name ‘Vijay Sales (India) Private Limited (VSIPL )’.', 'VSIPL is currently  managed by Nanu Gupta and his two sons , Nilesh Gupta and Ashish Gupta. As on December 20,', '2023,  the company has 131 operational stores. The company has operations in Maharashtra, Delhi, Gujarat,', 'Haryana, Uttar Pradesh, Telangana, and Andhra Pradesh. The company also has its in -house brand ‘Vise’, which', 'offers a wide range of televisions , washing machines , and air conditioners , which are exclusively available at VSIPL.', 'Brief Financials (₹', 'crore)  March 31, 2022 (A)  March 31, 2023 (A)  H1 FY24', 'Total operating income  5,400.55  7,236.02  NA', 'PBILDT  389.13  523.55  NA', 'PAT 157.07  211.21  NA', 'Overall gearing (times)  3.92 2.30 NA', 'Interest coverage (times)  4.98 4.64 NA', 'A: Audited ; UA: Unaudited . Note: The above results are the latest financial results available.', 'Status of non -cooperation with previous CRA: Not applicable', 'Any other information:  Not applicable', 'Rating history for the last three years: Please refer Annexure -2', '4 CARE Ratings Ltd.', 'Press Release', 'Covenants of the rated instrument s/facilit ies: Detailed explanation of the covenants of the rated', 'instruments/facilities is given in Annexure -3', 'Complexity level of the various instruments rated : Annexure -4', 'Lender details : Annexure -5', 'Annexure -1: Details of instruments/facilities', 'Name of', 'the', 'Instrument  ISIN  Date of', 'Issuance', '(DD-MM-', 'YYYY)  Coupon', 'Rate (%)  Maturity', 'Date (DD -', 'MM-YYYY)  Size of the', 'Issue', '(₹ crore)  Rating', 'Assigned', 'along with', 'Rating', 'Outlook', 'Fund-', 'based/Non -', 'fund-based -', 'LT/ST   - - - 100.00  CARE A+;', 'Stable /', 'CARE A1+', 'Annexure -2: Rating history for the last three years', 'Sr.', 'No', '. Name of the', 'Instrument/Ban', 'k Facilities  Current Ratings  Rating History', 'Type  Amount', 'Outstandin', 'g (₹ crore)  Ratin', 'g Date(s)', 'and', 'Rating(s', ')', 'assigne', 'd in', '2023 -', '2024  Date(s)', 'and', 'Rating(s', ')', 'assigne', 'd in', '2022 -', '2023  Date(s)', 'and', 'Rating(s', ')', 'assigne', 'd in', '2021 -', '2022  Date(s)', 'and', 'Rating(s', ')', 'assigne', 'd in', '2020 -', '2021', '1 Fund-based/Non -', 'fund-based -LT/ST  LT/ST', '* 100.00  CARE', 'A+;', 'Stable', '/ CARE', 'A1+ - 1)CARE', 'A+;', 'Stable /', 'CARE', 'A1+', '(06-Jan-', '23) 1)CARE', 'A+;', 'Stable /', 'CARE', 'A1+', '(06-Jan-', '22) 1)CARE', 'A+;', 'Stable /', 'CARE', 'A1+', '(03-Feb-', '21)', '2)CARE', 'A+;', 'Stable /', 'CARE', 'A1+', '(03-Apr-', '20)', '* Long Term / Short Term', 'Annexure -3: Detailed explanation of covenants of the rated instruments/facilities', 'Not applicable', '5 CARE Ratings Ltd.', 'Press Release', 'Annexure -4: Complexity level of the various instruments rated', 'Sr. No.  Name of the Instrument  Complexity Level', '1 Fund-based/Non -fund-based -', 'LT/ST  Simple', 'Annexure -5: Lender details', 'To view the lender wise details of bank facilities please click here', 'Note on the complexity levels of the rated instruments: CARE Ratings has classified instruments rated by', 'it on the basis of complexity. Investors/market intermediaries/regulators or others are welcome to write to', 'care@careedge.in for any clarifications.', '6 CARE Ratings Ltd.', 'Press Release', 'Contact us', 'Media Contact', 'Mradul Mishra', 'Director', 'CARE Ratings Limited', 'Phone: +91 -22-6754 3596', 'E-mail: mradul.mishra@ careedge.in', 'Relationship Contact', 'Saikat Roy', 'Senior Director', 'CARE Ratings Limited', 'Phone: 91 22 6754 3404', 'E-mail: saikat.roy@careedge.in', 'Analytical Contacts', 'Pulkit Agarwal', 'Director', 'CARE Ratings Limited', 'Phone: 912267543505', 'E-mail: pulkit.agarwal@careedge.in', 'Hitesh Avachat', 'Associate Director', 'CARE Ratings Limited', 'Phone: 912267543510', 'E-mail: hitesh.avachat@careedge.in', 'Himanshu Mahlyan', 'Rating Analyst', 'CARE Ratings Limited', 'E-mail: himanshu. mahlyan@careedge.in', 'About us:', 'Established in 1993, CARE Ratings is one of the leading credit rating agencies in India. Registered under the', 'Securities and Exchange Board of India, it has been acknowledged as an External Credit Assessment Institution by', 'the RBI. With an equitable position in the Indian capital market, CARE Ratings provides a wide array of credit rating', 'services that help corporates raise capital and enable investors to make informed decisions. With an established', 'track record of rating companies over almost three decades, CARE Ratings follows a robust and transparent rating', 'process that leverages its domain and analytical expertise, backed by the methodologies congruent with the', 'international best practices. CARE Ratings has played a pivotal role in developing bank debt and capital market', 'instruments, including commercial papers, corporate bonds and debenture s, and structured credit.', 'Disclaimer:', 'The ratings issued by CARE Ratings are opinions on the likelihood of timely payment of the obligations under the rated instru ment and are not', 'recommendations to sanction, renew, disburse, or recall the concerned bank facilities or to buy, sell, or hold any  security. These ratings do not', 'convey suitability or price for the investor. The agency does not constitute an audit on the rated entity. CARE Ratings has b ased its ratings/outlook', 'based on information obtained from reliable and credible sources. CARE Rat ings does not, however, guarantee the accuracy, adequacy, or', 'completeness of any information and is not responsible for any errors or omissions and the results obtained from the use of s uch information. Most', 'entities whose bank facilities/instruments are r ated by CARE Ratings have paid a credit rating fee, based on the amount and type of bank', 'facilities/instruments. CARE Ratings or its subsidiaries/associates may also be involved with other commercial transactions w ith the entity. In case', 'of partnership/pro prietary concerns, the rating/outlook assigned by CARE Ratings is, inter -alia, based on the capital deployed by the', 'partners/proprietors and the current financial strength of the firm. The ratings/outlook may change in case of withdrawal of capital, or the  unsecured', 'loans brought in by the partners/proprietors in addition to the financial performance and other relevant factors. CARE Rating s is not responsible for', 'any errors and states that it has no financial liability whatsoever to the users of the ratings  of CARE Ratings. The ratings of CARE Ratings do not', 'factor in any rating -related trigger clauses as per the terms of the facilities/instruments, which may involve acceleration of payments in case of', 'rating downgrades. However, if any such clauses are intr oduced and triggered, the ratings may see volatility and sharp downgrades.', 'For the detailed Rationale Report and subscription information,', 'please visit www.careedge.in']