Press Release April 01, 2025 JAGSON INTERNATIONAL LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	45.00	ACUITE BBB | Negative | Reaffirmed | Stable to Negative	-
Bank Loan Ratings	45.00	-	ACUITE A3+ | Reaffirmed
Total Outstanding	90.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has reaffirmed the long-term rating ‘ACUITE BBB' (read as ACUITE triple B) and short-term rating ‘ACUITE A3+’ (read as ACUITE A three plus) on Rs.90.00 crore bank facilities of Jagson International Limited (JIL). The outlook is revised to ‘Negative’ from ‘Stable’. Rationale for Rating The rating reflects the decline in business risk profile and elongated working capitals operations. Company revenue from operations declined by ~36% in FY2024 to Rs 141.79 crore as against Rs.222.43 crore for FY2023. The operating profit margin of the company stood at 0.19 percent in FY 24 against 51.30 percent in FY 23 since two out of four rigs were in major maintenance from April 23 to December 23. Company has intensive working capital requirements as evident from gross current assets (GCA) of 753 days in FY2024 as compared to 417 days in FY2023. However the rating get comfort with the healthy financial risk profile.

About the Company

­New Delhi based, Jagson International Limited (JIL)  was incorporated in 1988 as a private limited company by Mr Jagdish Gupta. It’s a family-owned business. JIL is the flagship company of the Jagson group of Companies. JIL is one of the first private sector companies to enter the field of offshore drilling for Oil and Gas exploration. Besides this JIL is also involved in warehousing and storage at ports. JIL has successfully done offshore drilling in the Indian waters for more than a decade. ONGC has been awarding various contracts to JIL for offshore drilling and is currently the sole customer for JIL, against stiff global competition. JIL has successfully drilled wells offshore, up to the depth of 25,000 feet.

Unsupported Rating

Not Applicable­

Analytical Approach

­Acuite has considered standalone business and financial risk profile of Jagson International Limited.

Key Rating Drivers

Strengths

­Experienced promoters, reputed clientele and established business model JIL has establish presence since 1988 in the field of off-shore drilling for Oil and Gas exploration companies. The company is promoted by Mr. Jagdish Gupta is the founder of Jagson Group with business experience of more than 30 years in diversified businesses. He is supported by Ms. Ravinder Kaur Hora and Mr. Pradeep Gupta who has more than 2 decades of experience in diversified business. Jagson International Ltd. has been in the business of oil rigs and drilling for over 30 years. The vast experience of promoters and established track record of operations has helped to establish long-standing relationships with India's leading upstream companies like ONGC. JIL has been able to complete the deployments in a timely manner and has been able to secure contracts renewals at prevailing rig charter rates. Healthy Financial Risk Profile Company has comfortable financial risk profile marked by strong net worth, low gearing and comfortable coverage indicators. The Total Tangible net worth stood at Rs. 1190.12 Cr. as on 31st March 2024 as against Rs. 1213.85 Cr. as on 31st March 2023. Decrease in net worth is on account of reduction in Tonnage Tax Reserve by Rs.24.29 Cr. Debt to Equity ratio stood at 0.03 times in FY24 as against 0.01 times in FY23. Gearing is expected to increase due to debt funded capex in near to medium term. The total debt outstanding of the company is Rs. 41.33 crore as on 31 March, 2024 which consists of short term working capital limit of Rs. 41.01 crore. Interest coverage ratio stood comfortable at 10.85 times for FY2024 as against 31.93 times in FY2023. Likewise, Debt Service coverage ratio stood comfortable at 10.85 times for FY2024 as against 27.15 times in FY2023. Total outside liabilities to total net worth (TOL/TNW) stood at 0.07 times as on FY2024 against 0.04 times as on FY2023. Acuité believes that going forward the financial risk profile of the company is key monitorable with the debt funded capex.

Weaknesses

Decline in ­­Revenue and Profitability The company have achieved the turnover of Rs.141.79 Cr. in FY24 against Rs.222.43 Cr. in FY23. The EBITDA Margins of the company stood at 0.19% in FY24 against 51.30% in FY23 and the PAT margins of the company stood at 0.39% in FY24 against 28.44% in FY23. There is a dip in the top line as well as in profitability since two out of four rigs were in major maintenance from April 23 to December 23. Also, JIL has recorded revenue of Rs.90.38 Cr. in H1FY25. Acuité believes that going forward the performance of the company will remain a key monitorable. Intensive Working Capital Operations Company has intensive working capital requirements as evident from gross current assets (GCA) of 753 days in FY2024 as compared to 417 days in FY2023. Intensiveness of Working capital is on account of High Inventory and Debtor days. Inventory days stood at 289 days in FY24 as against 394 days in FY23 and Debtor days stood at 219 days in FY24 against 95 days in FY23. Debtor days has been increased due to billing of Deep Sea Treasure i.e. rig which is deployed in Dubai is under negotiation. Acuité believes that going forward the negotiation of billing of Deep Sea Treasure will be key monitorable.

Rating Sensitivities

­­Movement in scale of operations Movement in working capital operations Company's ability to start operations for New Rig as per schedule

Liquidity Position

Adequate

Company has adequate liquidity marked by net cash accruals to nil maturing debt obligations, current ratio, cash and bank balance. Company generated cash accruals of Rs. 32.82 crore for FY2024. Current Ratio stood at 4.57 times as on 31 March 2024 as against 5.32 times in the previous year. Fund based working capital limits are utilized at ~82.27 per cent during the last six months ended February 25. Cash and Bank Balances of company stood at Rs. 8.01 crore. Acuite believes that the liquidity of the company would remain adequate due to healthy cash accruals, small debt obligations, healthy current ratio, albeit working capital intensive operations and reliance on bank borrowing for funding the same over the medium term.

Outlook: Negative

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	141.79	222.43
PAT	Rs. Cr.	0.56	63.26
PAT Margin	(%)	0.39	28.44
Total Debt/Tangible Net Worth	Times	0.03	0.01
PBDIT/Interest	Times	10.85	31.93

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• 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

­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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 08 Jan 2024 Bank Guarantee/Letter of Guarantee Short Term 5.00 ACUITE A3+ (Reaffirmed) Letter of Credit Short Term 5.00 ACUITE A3+ (Reaffirmed) Proposed Bank Guarantee Short Term 35.00 ACUITE A3+ (Reaffirmed) Cash Credit Long Term 30.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 15.00 ACUITE BBB | Stable (Reaffirmed) 10 Oct 2022 Bank Guarantee/Letter of Guarantee Short Term 10.00 ACUITE A3+ (Upgraded from ACUITE A3) Letter of Credit Short Term 10.00 ACUITE A3+ (Upgraded from ACUITE A3) Proposed Bank Guarantee Short Term 25.00 ACUITE A3+ (Upgraded from ACUITE A3) Cash Credit Long Term 15.00 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Stable) Cash Credit Long Term 30.00 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Stable)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating State Bank of India Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A3+ | Reaffirmed State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE BBB | Negative | Reaffirmed | Stable to Negative HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE BBB | Negative | Reaffirmed | Stable to Negative State Bank of India Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A3+ | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE A3+ | Reaffirmed

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Contacts

Mohit Jain Senior Vice President - Rating Operations Siddharth Garg Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.