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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 26.00 | ACUITE BBB+ | Stable | Reaffirmed | - |
| Bank Loan Ratings | 20.00 | Not Applicable | Withdrawn | - |
| Bank Loan Ratings | 124.00 | - | ACUITE A2 | Reaffirmed |
| Total Outstanding | 150.00 | - | - |
| Total Withdrawn | 20.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of 'ACUITE BBB+' (read as ACUITE Triple B plus) and short-term rating of ‘ACUITE A2’ (read as ACUITE A two) on the Rs.150.00 crore bank facilities of Anish Infracon India Private Limited (AIIPL). The outlook is ‘Stable'.
Acuité has also withdrawn the long-term rating on the Rs. 20.00 crore bank facilities of Anish Infracon India Private Limited (AIIPL). The same is withdrawn without assigning any rating as it is a proposed facility. The rating is being withdrawn on account of the request received from the company and as per Acuité’s policy on withdrawal of ratings as applicable to the respective facility/instrument. Rationale for reaffirmation The rating reaffirmation takes into account AIIPL's long track record of operations and experienced management, moderate improvement in operating performance and healthy financial risk profile. The operating income of AIIPL has shown moderate growth since the last two years ending FY2023. The Company's revenue stood at Rs.273.96 Cr in FY2023 as against Rs. 249.33 Cr in FY2022. Further, AIIPL is estimated to achieve a revenue of Rs.274.28 Cr in FY2024.The operating profit margins ranged between 11.54-11.69 percent for the last two years ended FY2023. The financial risk profile of AIIPL continues to be healthy with comfortable debt protection metrics and low gearing levels. The overall gearing of the company stood at 0.39 times as on March 31, 2023 as against 1.09 times as on March 31, 2022. The interest coverage ratio stood at 8.05 times in FY2023 as against 8.03 times in FY2022. The ratings are further supported by AIIPL’s moderate order book position of Rs. 477.40 as on April 17, 2024, which is ~1.64 times of the FY2023 revenue which provides medium-term revenue visibility. The rating is, however, constrained on account of intensive working capital operations and presence in competitive and fragmented industry. |
| About the Company |
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Gujarat-based, AIIPL was established as a partnership firm in the year 1978 by Vijapura family. Subsequently, the constitution changed to private limited company in 2010. AIIPL is engaged in civil construction work such as, road construction work, sanctioned by the Central and the state government. Currently, AIIPL is working in the states of Gujarat, Maharashtra and Madhya Pradesh.
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| Unsupported Rating |
| Not applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of the AIIPL to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
The operations of AIIPL commenced in 1978. The company is promoted by Vijapura family and promoters have experience of more than four decades in civil construction industry. The extensive experience of the promoters has helped the company in establishing and maintaining healthy relations with clients and sanctioning authorities. AIIPL has a healthy track record of timely order completion across its various special purpose vehicles (SPVs). Acuité believes that AIIPL will continue to benefit from promoters’ extensive experience in the industry and improve its business risk profile over the medium term.
The company has reported moderate growth in scale of operations with YOY growth of 9.88 percent in FY2023 as compared to FY2022. Revenues stood at Rs.273.96 Cr in FY2023 as against Rs.249.33 Cr in FY2022.. However, the operating margins stood stable at 11.54 percent in FY2023 as against 11.69 in FY2022 percent. The company has an unexecuted order book position of Rs.477.40 Cr as on April 17, 2024. The company is planning to execute orders worth around Rs.260-275 Cr in FY2025. The outstanding order book is 1.64x of the FY2023 revenue. Acuite believes that the financial performance of the company is expected to improve going ahead, led by moderate order book position.
The company’s financial risk profile is healthy, marked by a healthy net worth, low gearing levels, and healthy debt protection metrics. The net worth of the company stood at Rs.126.90 Cr and Rs.112.05 Cr as on March 31, 2023 and 2022 respectively. The improvement in net worth is due to accretion of reserves. Gearing of the company stood at 0.39 times as on March 31, 2023 against 1.09 times as on March 31, 2022. It has improved on account of the reduction in short term debt. Debt protection metrics – Interest coverage ratio and debt service coverage ratio stood at 8.05 times and 2.76 times as on March 31, 2023 respectively as against 8.03 times and 5.84 times as on March 31, 2022 respectively. TOL/TNW (Total outside liabilities/Total net worth) stood at 0.82 times and 1.86 times as on March 31, 2023 and 2022 respectively. The debt to EBITDA of the company stood at 1.45 times as on March 31, 2023 as against 3.74 times as on March 31, 2022. Acuité believes that in the absence of any major debt-funded capital expenditure plan in the near term; moderate cash accruals supported by lower reliance on the debt will help the company to maintain healthy financial risk profile over the medium term.
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| Weaknesses |
AIIPL’s working capital operations are intensive marked by high gross current asset (GCA) of 117 days as on March 31, 2023, as against 295 days as on March 31, 2022. However, the GCA days improved in FY2023 on account of improved Debtor days. Inventory days stood at 7 days as on March 31, 2023 as against 4 days as on March 31, 2022. Debtor days stood at 25 days as on March 31, 2023 as against 218 days as on March 31, 2022. Debtor days improved on account of payments being received on time for HAM projects. Subsequently, the payable period stood at 53 days on March 31, 2023 as against 384 days on March 31, 2022 respectively and the limits remains utilized at 34 percent for fund based and 22 percent for non-fund based over the 12 months ended March 31, 2023. Acuite believes that the working capital operations of the company will remain at similar levels over the medium term.
AIIPL is into the business of civil construction. This particular sector is marked by the presence of several mid to big size players. AIIPL faces intense competition from the other players in the sectors. Risk become more pronounced as tendering is based on minimum amount of biding of contracts. However, this risk is mitigated to an extent as management has been operating in this environment for last four decades.
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| Rating Sensitivities |
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| Liquidity Position: Adequate |
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AIPL’s liquidity position is adequate, marked by adequate net cash accruals to its maturing debt obligation. The company generated cash accruals in the range of Rs.22.75 Cr in FY2023, while its maturing debt obligations were Rs. 5.55 Cr during the same period. Going forward the company is expected to generate net cash accruals of Rs. 23- 24 Cr in FY 2024-25 against Rs.4.10 Cr repayment obligations. The current ratio stood at 1.38 times as on March 31, 2023, and the limits remained utilized at 34 percent for fund based and 22 percent for non-fund based over the 12 months ended March 31, 2023 The company maintains unencumbered cash and bank balances of Rs.22.13 Cr as on March 31, 2023. Acuité believes that the company’s liquidity will remain sufficient over the medium term backed by healthy accruals generation.
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| Outlook: Stable |
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Acuité believes AIIPL will maintain a 'Stable' outlook in the medium term on account of its experienced management and healthy financial risk. The outlook may be revised to 'Positive' in case of substantial growth in revenues with timely execution of orders. Conversely, the outlook may be revised to 'Negative' in case delays in receipt of new orders or detrioration of financial risk profile or stretch in working capital cycle.
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 273.96 | 249.33 |
| PAT | Rs. Cr. | 18.86 | 18.64 |
| PAT Margin | (%) | 6.89 | 7.48 |
| Total Debt/Tangible Net Worth | Times | 0.39 | 1.09 |
| PBDIT/Interest | Times | 8.05 | 8.03 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• 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 |
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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.
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