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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 30.88 | ACUITE BB- | Reaffirmed & Withdrawn | - |
| Bank Loan Ratings | 74.12 | - | ACUITE A4+ | Reaffirmed & Withdrawn |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 105.00 | - | - |
| Rating Rationale |
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Acuité has reaffirmed and withdrawn the long term rating to ‘ACUITE BB-’ (read as ACUITE double B minus) and the short term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.105.00 Cr. bank facilities of PKH VENTURES LIMITED (PKHVL).
The rating has been withdrawn on Acuite's policy of withdrawal of raitngs. The rating has been withdrawn on account of the request recieved from the company, and the NOC received from the banker. Rationale for the reaffirmation The rating reaffirmation takes into account of the improvement in the operating income of the company, The rating also draws comfort from experienced promoter and the company’s long track record in the industry. These strengths are however, offset by the working capital intensive in nature of operations along with average financial risk profile. |
| About the Company |
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P K H Ventures Limited (PKHVL) was established in March 2000, promoted by Mr. Pravin Kumar Agarwal and Mr. Vijay Shinde Kashinath to carry on business of hospitality services. The company has a wide range of fine dining restaurants, take-away food kiosks, quick service restaurants (QSR), pubs, airport lounges and hotels. The company is also involved in trading and warehousing of food grains & pulses, providing infrastructure services, engaged in contract of user fee collection and has built a food processing plant to manufacture pulp, paste, sausages and chutneys.The registered office of the company is in Mumbai.
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| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of PKHVL to arrive at the rating. |
Key Rating Drivers
| Strengths |
| Experienced management
PKHVL benefits from its experienced management. PKHVL was incorporated in 2000 and its current Directors, Mr. Pravin Kumar Agarwal and Mr. Vijay Shinde Kashinath have around two decades of experience in the hospitality industry. The company primarily owns and operates 2 hotels in Mumbai, 1 resort in Goa and 10 restaurants &food kiosks across India. Acuité believes that the experience of the promoters will continue to support the company’s growth plans going forward. Average financial risk profile PKHVL’s average financial risk profile is marked by healthy net worth, comfortable gearing and moderate debt protection metrics. The tangible net worth has increased to Rs. 112.82 Cr. as on 31st March 2022 as compared to Rs.107.42 Cr as on 31st March 2021 due to accretion of reserves. The gearing of the company stood at 0.33 times as on 31st March 2022 as compared to 0.28 times as on 31st March 2021. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood low at 0.49 times as on 31st March 2022 as against 0.48 times as on 31st March 2021. The debt protection metrics of the company marked by comfortable Interest Coverage Ratio (ICR) at 2.61 times as on 31st March 2022 as compared to 6.48 times as on 31st March 2021 but moderate Debt Service Coverage Ratio at 1.23 times as on 31st March 2022 as compared to 3.20 times as on 31st March 2021. Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.18 times as on 31st March 2022. Acuité believes that financial risk profile is expected to be remain average over the medium term in absence of major debt funded capex plans. |
| Weaknesses |
| Working capital intensive nature of operations
The working capital-intensive nature of operations of the company is marked by high Gross Current Asset days (GCA) of 224 as on 31st March 2022 as compared to 89 days of 31st March 2021 due to significantly changes in high other current asset which consists of other deposit, prepaid expenses material on loans etc. However, the debtor days stood comfortable at 43 days as on 31st March 2022 as compared to 08 days as on 31st March 2021. The inventory period stood relatively low at 05 days as on 31st March 2022 as compared to 03 days 31st March 2021 respectively. Acuité believes that the working capital management of PKHVL’s will remain intensive given the nature of the industry. Cyclical nature of the hotel industry The company is exposed to inherent cyclical nature of the hotel industry. Acuité believes the success of the company will be dependent upon its ability to excel in areas such as room rates, quality of accommodation, service level and convenience of location and the quality and scope of other amenities, including food and beverage facilities after the completion of the project. |
| Rating Sensitivities |
| None |
| Material covenants |
| None |
| Liquidity Position |
| Adequate |
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The company’s liquidity position is adequate marked by net cash accruals of Rs.6.75 Cr as on 31st March 2022 as against Rs. 4.81 Cr. long-term debt repayment during the same period. The current ratio stood at 1.52 times as on 31st March 2022, as compared to 0.88 times as on 31st March 2021. The cash and bank balances stood at Rs. 0.52 Cr. 31st March 2022. However, the working capital-intensive nature of operations of the company is marked by Gross Current Assets (GCA) of 224 days as on 31st March 2022 as compared to 89 days as on 31st March 2021, due to high other current asset. Acuité believes that going forward the liquidity position of the company will remain adequate due to the improving net cash accruals.
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| Outlook: |
| Not Applicable |
| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 22 (Actual) | FY 21 (Actual) |
| Operating Income | Rs. Cr. | 76.82 | 120.96 |
| PAT | Rs. Cr. | 5.36 | 11.78 |
| PAT Margin | (%) | 6.97 | 9.74 |
| Total Debt/Tangible Net Worth | Times | 0.33 | 0.28 |
| PBDIT/Interest | Times | 2.61 | 6.48 |
| Status of non-cooperation with previous CRA (if applicable) |
| Crisil vide its press release dated 22.2.022, had rated the company to Crisil B+/A4; INC. |
| Any other information |
| None |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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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
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