|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 44.28 | ACUITE B+ | Stable | Upgraded | - |
| Bank Loan Ratings | 18.00 | - | ACUITE A4 | Reaffirmed |
| Bank Loan Ratings | 30.28 | - | ACUITE A4 | Upgraded |
| Total Outstanding | 92.56 | - | - |
|
Rating Rationale |
|
Acuite has upgraded its long-term rating to 'ACUITE B+' (read as ACUITE B Plus) from 'ACUITE C' (read as ACUITE C) to the Rs. 42.27 Cr. bank facilities of Kinjal Civilcon LLP (KCL). The outlook is ‘Stable’.
Acuite has upgraded its long term rating to 'ACUITE B+' (read as ACUITE B Plus) from 'ACUITE D' (read as ACUITE D) to the Rs. 2.01 Cr. bank facilities of Kinjal Civilcon LLP (KCL). The outlook is ‘Stable’. Acuite has upgraded its short term rating to 'ACUITE A4' (read as ACUITE A four) from 'ACUITE D' (read as ACUITE D) to the Rs. 30.28 Cr. bank facilities of Kinjal Civilcon LLP (KCL). Acuite has reaffirmed its short term rating to 'ACUITE A4' (read as ACUITE A four) to the Rs. 18.00 Cr. bank facilities of Kinjal Civilcon LLP (KCL). Rationale for Rating Upgrade The rating has been upgraded basis the improvement in business risk profile and regularization of banking conduct by the company. The firm’s financial risk profile continues to remain average marked by low net worth, moderate gearing coupled with modest coverage indicators. Further, the firm has stretched liquidity position as reflected in its continuous high utilisation of bank limits. Going forward maintaining the scale of operations while improving the capital structure or reduction in working capital cycle and improvement in its liquidity profile will be key monitorables. |
| About the Company |
|
Mumbai based Kinjal Civilcon LLP was incorporated as a partnership firm in 2019 by Mr. Heeralal Doshi, Mr. Divyesh Doshi, Mr. Sadashiv Shetty, Mr. Ashokkumar Bafna, Mr. Sogaram Dewasi, Mrs. Kinjal Salecha and Miss. Divya Doshi. The firm is engaged in construction of buildings, flyovers, etc.
|
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
|
Acuité has considered the standalone financial and business risk profiles of KCL to arrive at the rating.
|
| Key Rating Drivers |
| Strengths |
| Augmentation in scale and healthy unexecuted order book The firm has unexecuted order book of Rs. 840.65 Cr. as on June 30, 2024, is expected to be executed over the next two to three years which provides adequate revenue visibility over the medium term. However, top four orders comprise of ~90 percent of the total order book and timely completion of these orders without any significant delays will remain a key monitorable. |
| Weaknesses |
| Average financial risk profile Working capital Intensive nature of operations |
| Rating Sensitivities |
|
| Liquidity Position |
| Stretched |
|
The firm’s liquidity position is stretched marked by modest net cash accruals as against its maturing debt obligations. The firm generated cash accruals of Rs. 9.76 Cr. during FY24 (Provisional) against its repayment obligation of Rs. 7.79 Cr. during the same period. The average fund-based bank limit utilization for 6 months’ period ended August 2024 stood high at ~99.28 percent. Furthermore, the firm maintained cash and bank balances of Rs. 1.01 Cr. as on March 31, 2024 (Prov.). The current ratio stood moderate at 1.10 times as on March 31, 2024 (Prov.).
|
| Outlook: Stable |
|
Acuité believes that KCL will maintain a ‘Stable’ outlook over medium term on account of experience of its management ,and improvement in business risk profile. The outlook may be revised to ‘Positive’ in case the Company achieves higher than expected improvement in its scale of operations while maintaining its profitability and is able to efficiently manage its working capital operations. Conversely, the outlook may be revised to ‘Negative’ in case of slower than expected growth in scale of operations or any further elongation in its working capital cycle impacting its liquidity profile.
|
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Provisional) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 209.95 | 144.79 |
| PAT | Rs. Cr. | 8.30 | 5.81 |
| PAT Margin | (%) | 3.95 | 4.01 |
| Total Debt/Tangible Net Worth | Times | 1.58 | 2.34 |
| PBDIT/Interest | Times | 2.35 | 2.00 |
| Status of non-cooperation with previous CRA (if applicable) |
| 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
|
|
| |
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Contacts |
|
|
|
About Acuité Ratings & Research |
