1. No category

Rating Rationale
Brickwork Ratings assigns ‘BWR BB-’ for the Bank Loan Facilities of ₹ 16.75
Cr of Srikar Laboratories Pvt Ltd.
Brickwork Ratings has assigned Rating1 for the Bank Loan Facilities of ₹ 16.75 Cr of Srikar
Laboratories Pvt Ltd (“SLPL” or “the Company”) as follows:
Facility
Bank Name
Limits
(₹ Cr)
Tenure
Rating
Long term
BWR BB(BWR Double B Minus)
Fund based:
Cash Credit
Fund based:
Term loan
Punjab
National Bank
(PNB)
Total rated
Facilities
3.75
(Outlook : Stable)
13.00
16.75
(INR Sixteen Crores and Seventy Five
Lakhs only)
BWR has principally relied upon the audited financial results (up to FY13), certified provisional
financial statements of FY14, projections of SLPL up to FY16 and information/clarifications
provided by the company management.
The rating draws strength from the extensive industry experience of the promoters in the
pharmaceutical industry, availability of regulatory clearances and timely project
commencement. The rating, is, however, constrained on account of intense competition in the
pharmaceutical drugs industry and the regulated nature of the pharmaceutical industry
characterized by stringent registration/clearance procedures required at various stages.
Background
Srikar Laboratories Pvt Ltd, Hyderabad was incorporated in 2010 with the objective of
manufacturing bulk drugs and Active Pharmaceutical Ingredient (API) Intermediates of
different therapeutic categories. SLPL is an ISO 9001: 2008 certified Company. The plant is
located in Visakhapatam District, Andhra Pradesh with a total area measuring 3.81 Acres
conforming to GMP norms. The production capacity is estimated to be at 60 MT per annum.
Plant/ Project details
The project is being set up at a cost of around Rs 21.60 Cr, proposed to be funded by promoter’s
equity contribution of Rs 8.60 Cr and term loan from banks of Rs 13.00 Cr. Out of
Rs 8.60 Cr of total equity, the promoters have so far brought in a sum of Rs 4.95 Cr via equity
share capital and Rs 2.19 Crs via unsecured loans from promoters as their share of contribution
for the proposed project. The bank has also disbursed Rs 13 Crs of term loan for the said project.
1
Please refer to www.brickworkratings.com for definition of the Ratings
www.brickworkratings.com
1
8 Oct 2014
The company has obtained necessary approvals and licenses required for the project for
manufacture of various kinds of APIs. Initially the management is planning to produce
Intermediates for various Bulk Drugs, both on job work for reputed API manufacturers as well
as for sale by the company. The Company also expects to produce intermediates for patented
products on job work basis.
The civil works at the site is already complete as per the proposed plan. The plant was put on
trial run in Sept 2014 and the commercial production has also commenced in the last week of
Sep 2014.
Shareholding and Management Profile
SLPL is promoted by Mr. V.Muralikrishnam Raju , Mr. K Rami Reddy , Mr P.V.Satyanarayana
Raju , Mr P.Rajaiah, Mr P Appa Rao , Mrs I Gayatri and Mr. P S N Raju . All the promoters are
well experienced in the Pharmaceutical and drugs industry.
Mr. V.Muralikrishnam Raju is the Chief Promoter and Managing Director of the Company. He
has 33 years of experience in procuring raw material, marketing & dealing with Statutory Bodies
and Banks.
Financial Performance
As business operations have commenced in the last week of September 2014, the company does
not have any material business for the year ended 31 st March 2014. The Company expects to
achieve a turnover of ~ Rs 29 Cr for FY15 (6 months) at an operating capacity of 25%. As on 31 st
March 2014, net worth of the Company stood at Rs 4.88 Crs.
Rating Outlook
The outlook is expected to be stable over the current year. Going forward, the ability of the
Company to generate revenues as expected, ensure timely debt servicing and manage working
capital efficiently would be the key rating sensitivities.
Analyst Contact
Relationship Contact
analyst@brickworkratings.com425-24
bd@brickworkratings.com
Phone
Media Contact
1-860-425-2742
media@brickworkratings.com
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 for 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
8 Oct 2014