Press Release December 04, 2024 DAMODHARTECH INTERNATIONAL PRIVATE LIMITED Rating Assigned,Reaffirmed and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	3.97	ACUITE BB+ | Stable | Upgraded	-
Bank Loan Ratings	8.47	-	ACUITE A4+ | Assigned
Bank Loan Ratings	46.03	-	ACUITE A4+ | Reaffirmed
Total Outstanding	58.47	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has upgraded the long-term rating to ‘ACUITE BB+’ (read as ACUITE Double B plus) from 'ACUITE BB' (read as ACUITE Double B) and reaffirmed the short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on Rs. 50.00 Cr. of bank facilities of Damodhartech International Private Limited (DIPL). The outlook is 'Stable'. Further, Acuité has assigned the short term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on  Rs.8.47 Cr. bank facility of Damodhartech International Private Limited (DIPL). Rationale for rating The rating upgrade is driven by stable operating profitability of the company albeit fluctuating operating income and healthy financial risk profile. While the operating income in FY24 has remained low at Rs.60.57 Cr. as against Rs.80.58 Cr. in FY23, the operating profitability of DIPL stood improved at 8.92 percent in FY24 as against 8.88 percent in FY23 due to lower input costs. Moreover, the company holds an order book of Rs. 221 Cr. as on October 31, 2024, which gives healthy revenue visibility. Further, the ability of the company to scale up its operations backed by timely execution of its order book while maintaining its profitability margins shall be a key monitorable.

About the Company

­Established in 1978, CBD Belapur Mumbai based DIPL is managed by Mr Ashwani Bhat and undertakes engineering, procurement and construction (EPC) contracts for erection and commission of switch yards, switching stations, sub stations, transformers up to 220 KV (extra high voltage).

Unsupported Rating

­Not Applicable.

Analytical Approach

­For arriving at its rating, Acuité has considered the standalone business and financial risk profile of DIPL.

Key Rating Drivers

Strengths

Experienced Management DIPL is managed by Mr. Ashwani Bhat, who has around two decades of experience in the EPC business. The company has established a strong market position and maintained long-standing relations with its reputed customers such as Maharashtra State Electricity Transmission Company Limited, Oil and Natural Gas Corporation Limited, Bharat Petroleum Corporation Limited, etc. Acuité believes that the company will continue to derive benefit from its experienced management and established market position over the medium term. Healthy Financial Risk Profile The financial risk profile of DIPL stood healthy marked by moderate net worth, low gearing and moderate debt protection metrics. The tangible net worth stood at Rs.31.56 Cr. as on 31 March 2024 as against Rs.28.04 Cr. as on 31 March, 2023. The total debt of the company for FY24 stood at Rs. 2.19 Cr. which includes Rs.0.87 Cr. of longterm debt and Rs.1.31 Cr. of short term debt. The gearing (debt-equity) stood same at 0.07 times as on 31 March 2024. Interest Coverage Ratio stood at 8.87 times for FY24 as against 9.59 times for FY23. Debt Service Coverage Ratio (DSCR) stood low at 7.13 times in FY24 as against 7.48 times in FY23. Total outside liabilities/Total networth (TOL/TNW) stood at 0.70 times as on 31 March, 2024 as against 0.84 times as on 31 March, 2023. Net Cash Accruals to Total Debt (NCA/TD) stood at 1.95 times for FY24 as against 2.65 times for FY23.

Weaknesses

­Intensive Working Capital Operations The company has intensive working capital cycle marked by GCA of 224 days in FY24 as compared to 181 days in FY23. While the inventory days reduced to 22 days in FY24 as against 37 days in FY23, the company has seen delays in the collection cycle as reflected by debtor’s days of 80 days in FY24 as compared 69 days in FY23. As against this, the creditor days stood increased at 119 days as on FY24 compared to 99 days as on FY23. Further, the current ratio of DIPL stands at 2.15 times in FY24.

Rating Sensitivities

­Significant improvement in operating performance of the company. Any deterioration in its liquidity leading to deterioration in debt protection metrics. Improvement in working capital cycle.

Liquidity Position

Adequate

­The company’s liquidity position is adequate marked by sufficient net cash accruals of Rs.4.27 Cr. in FY24. In addition, it is expected to generate a sufficient cash accrual in the range of Rs.5.00-7.00 Cr. against maturing debt obligations of Rs.0.29 Cr. over the medium term. The company maintains unencumbered cash and bank balances of Rs.0.35 Cr. as on March 31, 2024. Average bank limit utilization for fund-based limits stood as low as 15.39 percent for the last 09 months ended September 2024.

Outlook: Stable

­

Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	60.57	80.58
PAT	Rs. Cr.	3.52	4.61
PAT Margin	(%)	5.81	5.72
Total Debt/Tangible Net Worth	Times	0.07	0.07
PBDIT/Interest	Times	8.87	9.59

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable.

Any other information

­None.

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 13 May 2024 Letter of Credit Short Term 5.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Bank Guarantee (BLR) Short Term 11.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Bank Guarantee (BLR) Short Term 2.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Letter of Credit Short Term 6.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 1.47 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ | Stable) Secured Overdraft Long Term 2.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ | Stable) Cash Credit Long Term 2.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ | Stable) Proposed Long Term Bank Facility Long Term 8.53 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ | Stable) 15 Feb 2023 Letter of Credit Short Term 5.00 ACUITE A4+ (Assigned) Bank Guarantee (BLR) Short Term 11.00 ACUITE A4+ (Assigned) Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Assigned) Bank Guarantee (BLR) Short Term 2.00 ACUITE A4+ (Assigned) Letter of Credit Short Term 6.00 ACUITE A4+ (Assigned) Cash Credit Long Term 1.47 ACUITE BB+ | Stable (Assigned) Secured Overdraft Long Term 2.00 ACUITE BB+ | Stable (Assigned) Cash Credit Long Term 2.00 ACUITE BB+ | Stable (Assigned) Proposed Long Term Bank Facility Long Term 8.53 ACUITE BB+ | Stable (Assigned)

­

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating The Jammu and Kashmir Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 16.00 Simple ACUITE A4+ | Reaffirmed Indian Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4+ | Reaffirmed ICICI Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.03 Simple ACUITE A4+ | Reaffirmed ICICI Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.47 Simple ACUITE A4+ | Assigned The Jammu and Kashmir Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.47 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB ) ICICI Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.00 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB ) The Jammu and Kashmir Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.00 Simple ACUITE A4+ | Reaffirmed ICICI Bank Ltd Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE A4+ | Reaffirmed Indian Bank Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.50 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB )

Contacts

Mohit Jain Senior Vice President - Rating Operations Dhruvi Chauhan Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.