Established track record of Operations and Experienced management in Geo Spatial Solutions
IICTPL has more than 25 years of experience in providing geospatial solutions and services, with capabilities in marine charting, land mapping and software design solutions to reputed government clientele and corporations engaged in oil and gas, transportation, infrastructure, and utility sectors. The  corporate office is located in Hyderabad and branch office at Vizag SEZ for providing data processing services for overseas clientele. IICT has subsidiaries in US and Canada named IIC Technologies Inc. (US) and IIC Technologies Inc. (Canada) both established in 2001 for providing GIS services in US and Canada. IIC Technologies Pty Ltd (Australia) was formed in 2006 for providing digital mapping services to Australian clientele and IIC Technologies Ltd (UK) was formed in 2010 for providing digital mapping services for European clientele and IIC Technologies Ltd (New Zealand) for service New Zealand based clientele. IIC technologies Pvt ltd (India) is holding company of all its subsidiaries. Acuité believes that the experience of the management in the industry is likely to benefit the group over the medium term.

Moderate financial risk profile
The financial risk profile of the group is moderate in nature  marked by moderate networth, low gearing and below average debt protection metrics. The tangible net worth of the group declined to Rs. 102.76 Cr. as on March 31, 2024, from Rs. 107.45 Cr. as on March 31, 2023. The total debt of the group stood at Rs.33.67 Cr. as on March 31, 2024, as against Rs.13.59 Cr. as on March 31, 2023. The gearing of the group stood low at 0.33 times as on March 31, 2024, as compared to 0.13 times as on March 31, 2023. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) of the group stood at 0.59 times as on March 31, 2024, as against 0.41 times as on March 31, 2023. The debt protection metrics of the group moderated and is below average reflected by debt service coverage ratio of 0.25 times for FY24 as against 3.56 times for FY23. The interest coverage ratio declined to 0.56 times for FY24 as against 8.15 times for FY23. Net Cash Accruals/Total Debt (NCA/TD) stood at (0.02) times as on March 31, 2024, as compared to 1.18 times in the previous year.
Acuité believes that, going forward, the financial risk profile of the group will improve and remain moderate over the medium term in the absence of major debt funded capex plan expected improvement in the accruals.

Significant decline in profitability; albeit moderate growth in revenue
The group’s operating profit margin declined to 1.62% in FY2024, from 12.36% in FY2023 and 13.18% in FY2022. This reduction in profitability was primarily due to delays caused by unfavourable climatic conditions in certain regions. Additionally, one of the completed projects did not meet customer expectations, requiring the group to redo the work on certain parameters. As a result, this led to an increase in expenses and contributed to the decline in the EBITDA margin for FY2024. Further, on account of lower operating profit and higher finance and depreciation costs, the group incurred losses at PAT levels. However, the profitability is expected to improve in the current fiscal year. The group recorded revenue of Rs. 196.90 Cr. for FY2024 as against Rs 174.34 Cr. in FY2023 marking a growth of ~12.94%. Exports account for approx. 50-60% of total revenue, with the balance coming from the domestic market. Additionally, the unexecuted order book value of the group stood at Rs. 335.80 Cr. as on 30th September 2024, which is 1.71x times of the total revenue of FY2024, providing moderate revenue visibility over the medium term.
Going ahead, the ability of the group to improve its profitability levels while maintaining its scale of operations will remain a key monitorable over the medium term.

Improved albeit intensive nature of working capital operations
The working capital management of the group improved yet remained intensive in nature marked by Gross Current Assets (GCA) of 182 days as on March 31, 2024, as compared to 205 days as on March 31, 2023, owing to high receivables days. The debtor days stood at 142 days in FY2024 as against 151 days in FY2023. The high debtor days is due to group registering major portion of the revenue in the Q4 of the financial year, therefore, the receivables are high with the debtors ageing bucket of below 90 days. Furthermore, the average utilization for fund-based limits remained high, averaging around ~90.50% over the last twelve months ending December 2024 and average utilization of non-fund-based limit remained moderate, averaging around ~46.10% during the same period.
Acuité believes that the working capital operations of the group will remain almost at the same levels as existence of coherent risk from government projects and their delayed realization patterns.