> Experienced management and established track record
ASPL was founded by Mr. Nitin Agrawal a first-generation entrepreneur in 1997, which was later on reconstituted in a private limited company in 2007. The key promoter has around two decades of experience in infrastructure development and the construction industry. The other director Mrs. Bhawna has more than 5 years of experience in the said line of business. The company is also well supported by the second line of management. The established track record of operations and extensive experience of the promoters have helped the company in successful bidding of orders and maintaining a longstanding relationship with its reputed clients and suppliers. The company caters to various departments of Madhya Pradesh government and some reputed names in private sectors.
ASPL's operating income improved to Rs.119.27 Cr in FY2022(prov) as against Rs.79.35 Cr in FY2021. The operating margin of the firm stood at 12.92 percent in FY2022(prov) as against 8.17 percent in FY2021. The PAT margin also improved to 8.02 percent in FY2022(prov) as against 5.08 percent in FY2021. The company has a total unexecuted order book of Rs. 450 crore as on 31 Aug 2022 which is expected to be executed overe the medium term.
Acuité believes that the company will benefit from its experienced management, long-standing relations with customers and suppliers over the medium term.
>Moderate Financial risk profile
ASPL’s financial risk profile stood moderate marked by moderate networth, low gearing (debt to equity ratio) and healthy debt protection metrics. The Net worth of the company is moderate at Rs. 26.29 crore as on March 31, 2022 (Provisional) as against Rs.16.73 crore as on 31 March, 2021. The improvement in net worth is on account of accretion of profits to reserves. Total debt of the company stood at Rs.23.64 cr as on 31 March, 2022 (prov) as against Rs.3.27 Cr as on 31 March, 2021. Overall gearing (debt-equity) of the Company stood at 0.90 times as on 31 March 2022(prov) as against 0.20 times as on 31 March, 2021. Total outside Liabilities/Total Net Worth (TOL/TNW) stood at 1.44 times as on 31 March 2022(prov) as against 0.97 times as on 31 March, 2021. Debt protection metrics of the company is comfortable marked by interest coverage ratio of 9.68 times for FY2022(prov) as against 8.94 times for FY2021. Net Cash Accruals to Total Debt (NCA/TD) stood at 0.48 times as on 31 March 2022(prov) as against 1.44 times as on 31 March, 2021. |
| > Moderate working capital cycle
The working capital cycle of the company stood moderately intensive in nature marked by Gross Current Assets (GCA) days of 108 days as on March 31, 2022 (Prov.) as agaisnt 119 days as on March 31, 2021. The debtor's days stood at 34 days as on March 31, 2022 (Provisional) as against 60 days as on March 31, 2021. The inventory days stood at 18 days as on March 31, 2022 (Provisional) as against 22 days as on March 31, 2020.
> Highly competitive and fragmented industry marked by tender based nature of operations
The company operates in the civil construction industry marked by intense competition from several mid to big sized players. The company faces intense competition from the other players in the sector. Further, the margins remain unaffected by the risk to become more pronounced as tendering is based on the minimum amount of biding of contracts. Being a civil contractor, the revenue of ASPL depends on the number of successful bids and availability of fresh tenders bidding from the government.
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