3/9/2017 :CRISILRatings:

RatingRationale
March08,2017|Mumbai

AundeIndiaLimited
Ratingoutlookrevisedto'Positive'ratingsreaffirmed

RatingAction
TotalBankLoanFacilitiesRated Rs.50Crore
CRISILBB+/Positive(Outlookrevisedfrom'Stable'and
LongTermRating
ratingreaffirmed)
ShortTermRating CRISILA4+(Reaffirmed)
1crore=10million
RefertoannexureforDetailsofInstruments&BankFacilities

DetailedRationale
CRISILhasreviseditsratingoutlookonthelongtermbankfacilitiesofAundeIndiaLimited(AIL)to'Positive'from'Stable',
whilereaffirmingtheratingat'CRISILBB+'.Theshorttermratinghasbeenreaffirmedat'CRISILA4+'

TheoutlookrevisionreflectsCRISIL'sexpectationthatthecompany'sbusinessriskprofilewillstrengthenoverthemedium
termthroughincreaseinvolumeofsalesandcorrespondinggrowthinturnover,sustainableimprovementinprofitmargin,and
acontinuedcontrolontheworkingcapitalcycle.AILhasanestablishedpositionintheautomobileseatfabricindustryinIndia
with long term relationships with Original Equipment Manufacturers (OEMs) like Maruti Suzuki India Ltd (rated 'CRISIL
AAA/Stable/CRISIL A1+'), Hyundai Motor India Ltd (rated 'CRISIL A1+), and Ford India Pvt Ltd amongst others.
Consequently, it has benefitted from increase in sales volumes following release of new car models by these OEMs in the
recent past. The company has comfortable revenue visibility for the medium term based on the current OEMwise order
schedulereceivedbyAILandisexpectedtoreceiveadditionalordersinthefirstquarterof201718(referstofinancialyear,
April 1 to March 31). A strengthening of the order book and a rampup in turnover while maintaining the profit margin and
workingcapitalcyclewillremainkeyratingsensitivityfactorsoverthemediumterm.
AnalyticalApproach
For arriving at the rating, CRISIL has treated Rs.25.82 crore of noninterestbearing unsecured loans from its promoters as
neitherdebtnorequityasthesameisexpectedtoberetainedinthebusinessaslongtermfundingforthecompany.
KeyRatingDrivers&DetailedDescription
Strengths
*Association with its global promoter, Aunde Achter & Ebels gmbh (Aunde Germany): AIL benefits from the
association with global promoter, Aunde. These benefits to AIL are in the form of ready access to customers in the global
markets, technological and personnel support, and needbased funding support. CRISIL expects that AIL will continue to
benefitfromassociationwithitsglobalpromoter.

*Moderatefinancialriskprofile:AIL'sfinancialriskprofileisaverageasreflectedinhealthynetworth(excludingunsecured
loansfrompromotersofRs25.92Crs)andmoderategearingofaroundRs33croreand1.34times,respectively,asonMarch
31,2016..Adequatedebtprotectionmetricshaveimprovedwiththeinterestcoverexpectedtobeabout2timesin201617.

*LongpresenceinautomotivefabricsbusinessandestablishedrelationswithOEMs:AILhaslongstandingpresenceof
around20yearsintheautomotivefabricsbusiness,whichhelpedAILtodevelopareputedandstrongcustomerbaseinthe
automobile sector. Its established relationship with its customers is reflected in the preferred vendor status of AIL with the
OEMs and also in AIL's engagement with them for new models. It enjoys a steady 3237% market share in India in its
segmentofoperation.

Weaknesses
*Moderatescaleofoperations:AIL'sscaleofoperationsismoderatereflectedinexpectedrevenueofRs.125crorein2016
17. AIL is one of the key suppliers of seat fabric to OEMs in India. However, the overall scale of operations is moderate
limitingthecompany'sbargainingpowerwithitslargeclients.

*Workingcapitalintensiveoperations:AIL'soperationsareworkingcapitalintensiveasreflectedingrosscurrentassetsof
222daysasonMarch31,2016,becauseofhighinventoryandmoderatereceivables.Thestretchedgrosscurrentassetcycle
ishoweverpartlysupportedbyhighcreditorsof8090days.

*Susceptibilitytovolatilityinrawmaterialprices:Operatingmarginishighlysusceptibletovolatilityinrawmaterialprices
asreflectedinfluctuatedmarginsof714percentoverthefiveyearsthrough201516.Alltherawmaterialsofthecompany
arecrudeoilderivativesandAILisabletopassononlyapartoftheincreaseinthecosts.Henceanyfluctuationincrudeoil
priceswillaffecttheoperatingmarginsofthecompany.
Outlook:Positive
CRISILbelievesAILwillmaintainitsbusinessriskprofileoverthemediumtermbackedbyanestablishedmarketposition,
strong customer relationships and product profile. The ratings may be upgraded in case of significant increase in scale of
operations backed by increase in offtake from existing customers or addition of new OEM's, and sustenance of profitability
alongwithmaintenanceofthecapitalstructureandworkingcapitalcycle.Theoutlookmayberevisedto'Stable'incaseof
lower than expected revenues and decline in operating margins, largerthan expected debtfunded capex, or a stretched
workingcapitalcycle,leadingtodeteriorationinthefinancialriskprofile.

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3/9/2017 :CRISILRatings:
AbouttheCompany
AIL was promoted in 1997 by Mr. Ajay Anand (promoter of Faze Three group) and Aunde Germany as a private limited
company and was later converted into a public limited company. The company manufactures technical automotive woven
fabrics, which are used in seat covers and sells to seat manufacturers of OEMs such as Ford India Pvt Ltd, Maruti Suzuki
India Ltd (rated 'CRISIL AAA/Stable/CRISIL A1+'), Hyundai Motor India Ltd ('CRISIL A1+'), Mahindra and Mahindra Ltd
('CRISILAAA/Stable/CRISILA1+).ThecompanyhasmanufacturingfacilitiesatDadra(Dadra&NagarHaveli).

AILhasreportednetsalesofRs.125croreandPATofRs.1.71croreforfullyearendedMarch2016asagainstnetsalesof
Rs.81croreandnetlossofRs.4.8crorefortheninemonthsendedMarch2015(Note:companyhadchangeditsaccounting
yearfromJulyJuntoAprMar,therefore,March2015wasaninemonthsendedfinancialclosure).
Anyotherinformation:Notapplicable

Noteoncomplexitylevelsoftheratedinstrument:
CRISILcomplexitylevelsareassignedtovarioustypesoffinancialinstruments.TheCRISILcomplexitylevelsareavailable
onwww.crisil.com/complexitylevels.UsersareadvisedtorefertotheCRISILcomplexitylevelsforinstrumentsthattheyconsider
forinvestment.UsersmayalsocalltheCustomerServiceHelpdeskwithqueriesonspecificinstruments.

AnnexureDetailsofInstrument(s)
Dateof Issuesize Ratingassigned
ISIN Nameofinstrument Couponrate Maturitydate
allotment (Rscrore) withoutlook
NA TermLoan NA NA 27Mar2023 2.50 CRISILBB+/Positive
NA TermLoan NA NA 27Oct2027 16.50 CRISILBB+/Positive
NA TermLoan NA NA 05Mar2018 0.26 CRISILBB+/Positive
NA TermLoan NA NA 02Sep2017 0.05 CRISILBB+/Positive
NA TermLoan NA NA 30Jun2017 1.30 CRISILBB+/Positive
NA Cashcredit NA NA NA 21.50 CRISILBB+/Positive
NA Bankguarantee NA NA NA 0.50 CRISILA4+
NA BuyersCredit NA NA NA 7.0 CRISILBB+/Positive
Proposedlongtermbank
NA NA NA NA 0.39 CRISILBB+/Positive
loanfacility

AnnexureRatingHistoryforlast3Years
Startof
Current 2017(History) 2016 2015 2014
2014
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Fundbased No
CRISIL CRISIL CRISIL
Bank LT/ST 49.5 Rating 260216 050315
BB+/Positive BB+/Stable BBB/Stable
Facilities Change
NonFund No
CRISIL CRISIL
basedBank LT/ST .5 CRISILA4+ Rating 260216 050315
A4+ BBB/Stable
Facilities Change
Tablereflectsinstanceswhereratingischangedorfreshlyassigned.'NoRatingChange'impliesthattherewasnoratingchangeundertherelease.

AnnexureDetailsofvariousbankfacilities
Currentfacilities Previousfacilities
Amount Amount
Facility Rating Facility Rating
(Rs.Crore) (Rs.Crore)
BankGuarantee .5 CRISILA4+ BankGuarantee .5 CRISILA4+
CRISIL CRISIL
Buyer`sCredit 7 CashCredit 21.5
BB+/Positive BB+/Stable
CRISIL CRISIL
CashCredit 21.5 CorporateLoan 2.5
BB+/Positive BB+/Stable
ProposedLongTerm CRISIL CRISIL
.39 LongTermLoan 3.63
BankLoanFacility BB+/Positive BB+/Stable
CRISIL ProposedLongTerm CRISIL
TermLoan 20.61 5.37
BB+/Positive BankLoanFacility BB+/Stable
WorkingCapitalTerm CRISIL
0 16.5
Loan BB+/Stable
Total 50 Total 50

Linkstorelatedcriteria
CRISILsApproachtoFinancialRatios
CRISILsBankLoanRatingsprocess,scaleanddefaultrecognition
Ratingcriteriaformanufaturingandservicesectorcompanies
RatingCriteriaforAutoComponentSuppliers
TheRatingProcess

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