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Rating Rationale

Brickwork Ratings assigns BWR BBB+ Outlook (Stable) rating for Bank Credit
Facilities aggregating 170.00 Cr of Waman Hari Pethe Sons Pvt Ltd.

Brickwork Ratings (BWR) has assigned the Rating1 of BWR BBB+ (Pronounced BWR Triple
B plus) with a stable outlook for the long term Bank credit facilities of Rs.170 Crore of Waman
Hari Pethe Sons Pvt Ltd. (WHPS or the Company)1,.

Limits in
Facility Tenure Rating1
Amount (Cr)
Cash Credit 170.00 Long Term (Pronounced BWR Triple B Plus)
(Outlook- Stable)
Total Limits 170.00 (INR One Hundred Seventy Crores Only)

The rating inter alia factors promoters experience and long track record in retail jewelry
industry, established brand name particularly in Maharashtra region, and efficient inventory
management and robust financial parameters.
The rating is however constrained by moderate financial risk profile, weak profitability, intense
competition in retail jewellery segment, and exposure to risk of change in Government policies
and regulations with respect to retail jewelry segment/ gold control.

Waman Hari Pethe Sons Pvt Ltd (WHPS) is incorporated by Mr. Subodh Pethe and Mrs Sonali
Pethe in year 2010 engaged in retail jewelley business. The family business was carried out
under a single entity till year 2001 when the family business was spun off in four different
entities. Mr. Subodh Pethe inherited name Waman Hari Pethe and a single shop at Thane in
year 2001. Presently WHPS has 12 showrooms located in Thane, other eastern suburbs of
Mumbai, Aurangabad, Solapur and Pune.
WHPS deals in hallmarked gold jewellery, silver articles and certified diamond jewellery. The
company has also extended its product line to affordable Kundan and Antique Gold jewellery.
WHPS customer base constitutes primarily Maharashtrian middle class and upper middleclass
families as it deals in traditional gold jewellery.

The operations of the company are managed by Mr. Subodh Pethe and Mrs. Sonali Pethe
supported by team of experienced professionals.

Financial Performance
WHPS reported revenues of Rs. 615.24 Crore in FY16 compared to Rs. 665.43 Crore in FY15, the
de-growth of 7.5% in revenues was primarily on account of nationwide strike of 42 days (from
2-Mar-2016 to 13-Apr-2016) by jewelers against imposition of excise duty of 1%.

Please refer to for definition of the Ratings 1 10 Nov 2016

WHPSs operating profits declined to Rs.27.34 crore for FY2016 from Rs.30.32 crore in FY15.
Further net profit declined to Rs.4.24 crore in FY16 from Rs.5.60 crore in FY15.

The capital structure of the company is highly geared with debt equity ratio at 2.30x as on
March 31st 2016 as against 2.8x as on March 31st 2015. The companys debt primarily comprises
of working capital facilities and gold-on-loan scheme of the Lending Bank which provides
natural hedge against fluctuations in gold prices. The company is also contemplating expansion
of outlets for next 2 to 3 years.

Going forward, the companys ability to scale up its operations revenues, improve profitability,
geographically diversify the business and improve its capital structure by timely equity infusion
will be key rating sensitivities of the firm.

Analyst Contact Relationship Contact

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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. 2 10 Nov 2016