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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 100.00 | - | ACUITE A2+ | Upgraded |
| Total Outstanding | 100.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has upgraded the short-term rating to 'ACUITE A2+' (read as ACUITE A two plus) from 'ACUITE A2' (read as ACUITE A two) on the Rs. 100.00 Crore bank facilities of Aon Consulting Private Limited (ACPL).
Rationale for upgrade The rating upgrade takes into account the y-o-y growth in the revenue of the company which stood at Rs.770.06 Cr. in FY2024 and is estimated at Rs.886.43 Cr. in FY2025. The growth is derived from increase in revenue from business process and technology outsourcing services for sister concerns of the group along with HR consultancy services. The financial risk profile of the company is marked by healthy net worth and healthy debt protection metrics. Further, liquidity position is strong reflected by sufficient net cash accruals against maturing lease liabilities along with unencumbered fixed deposits and mutual fund investments. The rating also factors in the long track record of operations, experienced management and company's shared brand name with the parent entity Aon PLC. However the rating is constrained by foreign exchange risk as the major revenue stream of ACPL emanates from the technical support and business process outsourcing services provided to its group affiliates overseas therefore the company is exposed to the risk of losses on account of currency fluctuations and geographical concentration of revenues wherein in FY2024 nearly 50 percent was generated by the services provided to USA based group entities. |
| About the Company |
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Incorporated in 2008, Aon Consulting Private Limited (ACPL) is the Indian arm of the Aon group which is spread across 120 countries in the field of insurance and reinsurance, HR consultancy and others. The company is registered in Delhi and generates its revenues via two lines of business viz. human resources consultancy services in the domestic markets as well as providing technical support to the group companies overseas. It's Holding company is Aon Mauritius Holdings and ultimate holding company is Aon PLC. It is being managed by Mr. Arun Charles Dias, Mr. Rahul Kedia and Mr. Nitin Sethi.
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| Unsupported Rating |
| ACUITE A2 |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of Aon Consulting Private Limited while factoring in the support from the group entities and their strong brand presence. |
| Key Rating Drivers |
| Strengths |
| Strong brand presence and Long track record of operations
ACPL is a part of Aon group which is one of the biggest players in Commercial Risk, Reinsurance and consultancy industry with an expanding reach of branches in 120 countries across the globe. The Aon group has had a long presence of nearly four decades in the industry catering to clients within numerous domains. The overall consolidated turnover of the group stood at $15.69 billion in 2024 as against $13.37 billion in 2023. The long track record of operations and the business diversification of the group geographically as well as in various segments has allowed them to cater to a number of reputed names like Amazon, Walmart, AT & T, Tata Consultancy limited and Infosys to name a few. ACPL is engaged in consulting along with technology outsourcing work and has had a long track record of operations of more than 15 years. Further, the revenues of ACPL are majorly generated by the tech support work undertaken by the entity for its group affiliates thus the company performance is directly proportional to the group entities performances. The brand name of Aon has benefitted their Indian arm ACPL in engaging with many big players in the domestic markets for the human resources consulting business such as Wipro Limited, Cognizant Technology Solutions India Private Limited, Unisys Private Limited to name a few. Strong Financial Risk Profile The financial risk profile of the company is marked by healthy net worth and healthy debt protection metrics. The tangible net-worth stood at Rs.282.81 Crore as on 31st March 2024 as against Rs.274.86 Crore as on 31st March 2023. The increase in the net-worth is on an account of accretion of profits into reserves. The company has no dependence on external debt as the total debt of Rs.59.60 Cr. as on 31st March 2024 as against Rs.58.66 Cr. as on 31st March 2023 consists of lease liability that the company is paying for the offices they are operating in. The capital structure of the company is marked by gearing ratio which stood below unity at 0.21 times as on 31st March 2024 and 31st March 2023. Further, the coverage indicators of the company are reflected by interest coverage ratio and debt service coverage ratio which stood at 23.87 times and 7.37 times respectively as on 31st March 2024. The TOL/TNW ratio of the company stood at 0.84 times as on 31st March 2024 against 0.76 times as on 31st March 2023 and DEBT-EBITDA of the company stood at 0.34 times as on 31st March 2024 against 0.37 times as on 31st March 2023. The yearly capital expenditure plans of the company are managed from internal accruals. Acuité believes that going forward the financial risk profile of the company is expected to remain stable with no debt funded capex plans. |
| Weaknesses |
| Foreign exchange risk and geographical concentration of revenues
The major revenue stream of ACPL emanates from the technical support and business process outsourcing services provided by the company to its group affiliates overseas which contributed to around 77 percent of the total revenue in FY2024 as well as FY2025 (E), therefore the company is exposed to the risk of losses on account of currency fluctuations which can arise from the volatility in the geopolitical situations, trade barriers and the advent of global recession led by risk aversions in response to interest hikes by central banks, thus it is imperative that the company uses hedging mechanisms in order to safeguard their earnings in various markets. Acuité also takes note of the fact that out of the total revenues of Rs.770.06 crores in FY2024 around 50 percent was generated by the services provided to USA based group entities therefore there is a high geographical concentration of revenues. This revenue stream can be impacted heavily in case of any major changes in the taxation laws in the USA or any instability in the international relationships. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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Acuite takes into consideration the benefit derived by Aon Consulting Private Limited from the support of Aon Group and its strong brand presence. Stress Case Scenario |
| Rating Sensitivities |
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| Liquidity Position |
| Strong |
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The liquidity profile of the company is strong on account of strong net cash accruals and unencumbered fixed deposits and mutual fund investments. The net cash accruals of the company stood at Rs.131.45 Cr. as against maturing lease liability obligations of Rs.11.52 Cr. over the same period. Going forward, the company is expected to generate net cash accruals under the range of Rs.120 to Rs.190 Crore in against its lease liability obligations over the same period. Further, the non fund based working capital limits stood utilized at 64.60% ending February, 2025 and the investments and cash & bank balance of the company are unencumbered which stood at Rs.73.26 Cr. and Rs.3.31 Cr. respectively as on 31st March 2024.The current ratio of the company stood at 1.63 times as on 31st March 2024 against 1.54 times as on 31st March 2023.
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| Outlook: Not Applicable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 770.06 | 635.60 |
| PAT | Rs. Cr. | 93.96 | 85.19 |
| PAT Margin | (%) | 12.20 | 13.40 |
| Total Debt/Tangible Net Worth | Times | 0.21 | 0.21 |
| PBDIT/Interest | Times | 23.87 | 24.82 |
| 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 • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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