Brickwork Ratings India Pvt Ltd. : 31 January 2014 Brickwork Ratings assigns ‘BWR BB’ & ‘BWR A4’ for Bank Loan Facilities aggregating Rs. 13.30 Cr of Baheti Metal and Ferro Alloys Ltd.

Rating Rationale Brickwork Ratings assigns 'BWR BB' & 'BWR A4' for Bank Loan Facilities aggregating ₹ 13.30 Cr of Baheti Metal and Ferro Alloys Ltd.

Brickwork Ratings has assigned following Ratings1 for Bank Credit Facilities of Baheti Metal and Ferro Alloys Limited ("BMFAL" or "the company").

Facility	Limit (₹ Cr)	Tenure	Rating
Cash Credit	12.50	Long Term	BWR BB (BWR Double B) (Outlook: Stable)
Bank Guarantee	0.80	Short Term	BWR A4 (BWR A Four)
Total	13.30	INR Thirteen Crores and Thirty lakhs only

BWR has essentially relied upon the audited financial results up to FY13, projections up to FY15, and information and clarifications provided by the management of the company.
The rating factors, inter alia, promoters' experience in the industry, reputed clientele, yearly purchase orders, and contracts with customers having prices pegged to NALCO prices. However, the rating is constrained by dependence on seasonality and cyclicality of steel business, low bargaining power with customers, high customer concentration risk, thin profit margins and weak debt protection metrics.
Baheti Metal & Ferro Alloys Ltd was established in the year 1994 by Mr. Bansilal R.Shah. BMFAL started its commercial operations in 1995. BMFAL is a leading manufacturer and supplier of Secondary Aluminium and Aluminium alloys ingots for steel industry. The company has a manufacturing facility in Gandhinagar district of Gujarat. The company is primarily engaged in the production of aluminium notch bar, cubes, shots, ingots, Aluminium alloys ingots, Zinc aluminium alloys ingots and ferro aluminium ingots. Major customers of the company are Tata Steel, JSW and Essar steels. The production capacity is 6000MTPA. In FY13, the capacity utilization was about 79%. BMFAL has about 150 employees and all on contract
basis and about 80% of them are unskilled. It is an ISO 9001:2000 certified company.

1 Please refer to www.brickworkratings.comfor definition of the Ratings

www.brickworkratings.com 1 31 Jan 2014

Mr. Shankerlal B.Shah is the Managing Director of the company and has more than 20 years of experiece. His son, Mr. Balkishan Shah is in charge of production. Mr.Jamanlal Maliwal handles purchases, finance and marketing of the business and has about 20 years of business experience.
The company's revenue has increased from ₹79.46Cr in FY12 to ₹88.78Cr in FY13. Net profit margin of the company in FY13 is at 0.40%, reduced from 0.99% in FY11 and operating Profit margin is 3.41%. Tangible networth of the company was ₹8.48Cr in FY13.
Going forward, ability to achieve projected revenues, ability to improve the profitability, diversification of customer base, and ability to manage liquidity will be key rating sensitivities.

Analyst Contact	Relationship Contact
[e-mail]	[e-mail]
Phone	Media Contact
1-860-425-2742	[e-mail]

Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable f or any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.

www.brickworkratings.com 2 31 Jan 2014