|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 10.00 | ACUITE BB | Stable | Assigned | - |
| Bank Loan Ratings | 10.00 | - | ACUITE A4+ | Assigned |
| Total Outstanding | 20.00 | - | - |
|
Rating Rationale |
|
Acuité has assigned its long-term rating of ‘Acuite BB’ (read as ACUITE double B) and short-term rating of ‘Acuite A4+’ (read as ACUITE A four plus) on 20.00 crore bank facilities of Dr. G D Pol Foundation (DGDPF). The outlook is ‘Stable’.
Rationale for rating assigned The rating assigned reflects the trust’s long track record of operations in the education industry. The rating also draws comfort from the additional of new courses and with the healthy occupancy levels for the trust. Further the rating also factors in the healthy financial risk profile as marked by the low gearing of 0.29 times and DSCR of 4.49 times as on 31st March 2023. However, the rating is constrained by the delay in receipts of scholarship fees form the government as marked by high debtors days for the trust. The rating also factors in the growing competition in the field of education and the various regulatory risk associated with the business. |
| About the Company |
|
Dr. G. D. Pol Foundation was incorporated as a charitable trust in 1989 with an object of imparting education through various educational institutions. Its main objectives are providing education in the field of medical, para-medical, technical and management, etc. including free medical treatment to needy in general and poor mankind in particular. The trust currently has 5 institutions along with three training hospitals. The five institutions include YMT Homeopathy college, YMT School of Nursing, YMT Ayurvedic medical college, YMT college of Physiotherapy and YMT dental college.
|
| Unsupported Rating |
|
Not Applicable
|
| Analytical Approach |
| Acuite has taken a standalone business and financial risk profile of Dr. G D Pol Foundation to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Established track record of operations with healthy occupancy levels.
DGDPF has been in operations since 1989. The chairman of the trust, Mr. Gajanan Pol has experience of around three decades in the field of education. The founders, along with a strong team of more than 600 qualified faculty members and doctors have been imparting quality education to their students. The income of the trust stood at Rs.54.5 crores in FY2023 as against Rs. 48.54 crores in FY2022 and Rs.38.33 crore in FY2021. The trust generated 83 percent of its income from student fees, 10 percent from hospital fees and the rest form hostel and premises compensation fees. The trust provides eleven courses at its institutions with a total sanctioned intake of 749 seats. Occupancy levels at these colleges remain healthy at 100 percent. The trust has three hospitals- General, Ayurvedic and Homeopathy, the treatments at such hospitals are done at a subsidised rate. Acuite believes that the established track record along with healthy occupancy levels with continue to benefit the trust going ahead. Healthy Financial Risk Profile. The financial risk profile of the trust stood healthy, marked by moderate trust corpus fund, low gearing (debt-equity) and strong debt protection metrics. The tangible net worth stood at Rs. 38.11 crores as on 31 March 2023 as against Rs. 42.24 crore as on 31 March 2022. The decrease in corpus fund was on account of reductions in other funds marked by trust. The total debt of the trust stood at Rs. 11.19 crore which includes short-term loan of 5.12 crore in form of CC and unsecured loans from others stood at 6.06 crore as on 31 March 2023. The gearing (debt-corpus fund) stood at 0.29 times as on 31 March 2023 as compared to 0.28 times as on 31 March 2022. Total outside Liabilities/Total Net Worth (TOL/TNW) stood at 1.59 times as on 31 March 2023 as against 1.32 times as on 31 March 2022. Debt Service Coverage Ratio and Interest Coverage Ratio both stood at 4.49 times for FY2023 as against 4.47 times for FY2022. Net Cash Accruals to Total Debt (NCA/TD) stood at 0.22 times for FY2023 as same as 0.22 times for FY2022. Acuite believes the financial risk profile of the trust will remain healthy on account of no additional debt planned. |
| Weaknesses |
| Delays in receipt of scholarship fees of students from government leading
Students at DGDPF get scholarship from the government based on their merit around 30 percent of the fees is received from government which takes more than a year. Hence, timely receipt of fees form government will remain a key rating sensitivity. Stringent regulatory framework and intense competition Various agencies such as AICTE, NBA, NAAC, MCI, and UCG, among others, under the State and Central government prescribe regulatory framework to DGDPF depending on the professional courses offered. Fees charged by the college is also regulated by Fee regulatory authority (FRA) and the trust cannot revise its fees without the approval of FRA. The compliance is highly regulated and marked with entry, operation and exit barriers at each level which can impact the revenues and profitability of the trust. Further, DGDPF is exposed to intense competition from various educational institutes located in surrounding areas. |
| Rating Sensitivities |
|
| Liquidity Position |
| Adequate |
|
The trust’s liquidity position is adequate, marked by moderate net cash accruals. The firm is expected to generate cash accrual in the range of Rs. 2.11-2.62 crores over the medium term. The working capital limits are marked moderate as reflected by moderate utilizations of fund-based limit of around 77 percent in the last 9 months ended December’ 2023. However, the current ratio stands at 0.63 times as on March 31, 2023, as against 0.61 times as on 31 March 2022.
Acuite believes that the liquidity position to remain adequate marked by the moderate cash accruals against negligible debt repayments for the trust. |
| Outlook: Stable |
|
Acuité believes that DGDPF will maintain a 'Stable' outlook over the medium term on the back of its experienced management and healthy occupancy levels. The outlook may be revised to 'Positive' in case the trust registers higher-than-expected growth in its revenue and profitability on account of addition of new courses. Conversely, the outlook may be revised to 'Negative' in case the trust registers lower-than-expected growth in revenues or in case of deterioration in the trust’s financial risk profile.
|
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 54.50 | 48.54 |
| PAT | Rs. Cr. | 0.26 | 0.49 |
| PAT Margin | (%) | 0.49 | 1.01 |
| Total Debt/Tangible Net Worth | Times | 0.29 | 0.28 |
| PBDIT/Interest | Times | 4.49 | 4.47 |
| Status of non-cooperation with previous CRA (if applicable) |
| None |
| Any other information |
| None |
| Applicable Criteria |
|
• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.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 : |
| Not Applicable |
|
|
|||||||||||||||||||||||||||
|
|
Contacts |
|
|
|
About Acuité Ratings & Research |
