Vadilal Enterprises Ltd. — Capital/Financing Update 2020

Aug 11, 2020

Date: 11[th] August, 2020

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To, Department of Corporate Services, BSE Limited, Phiroze Jeejeebhoy Towers Dalal Street, Fort, Mumbai - 400 001. Scrip Code : 519152

Subject: Credit Rating-Revision- India Ratings and Research (Ind-RA)

Pursuant to regulation 30 of SEBI (LODR) Regulation, 2015, we wish to intimate you that India Ratings and Research (Ind-RA) has downgraded Vadilal Enterprises Limited Long-term issuer rating to ‘IND BBB’ from ‘IND BBB+’ while resolving Rating Watch Negative (RWN).

The instrument-wise rating actions are as follows:

Instrument Type	Rating/Outlook	Rating Action
Term Loan	IND BBB/Negative	Downgraded; Off RWN
Fund-based bank facilities	IND BBB/Negative/IND A3+	Downgraded; Off RWN
Non-fund-based Bank facilities	IND A3+	Downgraded; Off RWN

KEY RATING DRIVERS

Adverse Impact of COVID-19 Pandemic: The company manufactures and sell its brand of Vadilal icecream. Although historically, the business of ice-creams was seasonal, the company’s recent sales trends highlight the product’s year-long demand, along with an increasing share of exports. Over the past three financial years, the company earned about 43% of its average revenue and 84% of its EBITDA during 1Q as it is the peak season. However, overall sales were severely impacted in 1QFY21 due to the nationwide COVID-19 led lockdown, impacting the demand coming from individual customers as well as that from hotels, restaurants and catering segment.

Ind-Ra expects the company’s consolidated revenue to fall 45%-50% yoy and consolidated EBITDA to be negligible in FY21.

You are requested to take the above information in your records.

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