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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 24.79 | ACUITE C | Reaffirmed & Withdrawn | - |
| Bank Loan Ratings | 80.04 | - | ACUITE A4 | Reaffirmed & Withdrawn |
| Bank Loan Ratings | 12.17 | - | Not Applicable | Withdrawn |
| Total Outstanding | 0.00 | - | - |
| Total Withdrawn | 117.00 | - | - |
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Rating Rationale |
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Acuite has reaffirmed and withdrawn its long-term rating of 'ACUITE C' (read as ACUITE C) and the short-term rating of ‘ACUITE A4’ (read as ACUITE A Four) on Rs.104.83 Cr. bank facilities of Unique Structures and Towers Limited (USTL). The rating is being withdrawn on account of the request received from the company and NOC (No Objection Certificate) received from the banker.
Acuité has also withdrawn its short-term rating on Rs 12.17 crore proposed bank facilities of Unique Structures and Towers Limited (USTL) without assigning any rating as it is a proposed facility. The rating is being withdrawn on account of the request received from the company. The rating has been withdrawn as per Acuite's policy of withdrawal of ratings as applicable to the respective instrument/facility. Rationale for Reaffirmation The rating reaffirmation is based on delays reported in servicing debt obligation in the credit bureau information report (CRIF) of Unique Structures and Towers Limited (USTL) in the month of December 2024 and January 2025. |
| About the Company |
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Unique Structures and Towers Limited (USTL) was incorporated in 1985 by Mr. V.K. Bansal at Chhattisgarh. In 1995, the company started galvanized steel structure fabrication unit for transmission towers. The company has been regularly supplying galvanized steel structures and towers to Power Grid Corporation of India Limited (PGCIL), Indian Railway, Departments of Telecommunication (DoT) among others. USTL also ventured into EPC contract. Currently company is into Engineering, Procurement and Construction (EPC) for Power Grid Corporation India Ltd (PGCIL), Indian Railway and Department of Telecommunication (DoT) among others. The directors of the company are Mr. Ajay Kumar, Mr. Rishi Kumar Bansal, Mrs. Sonika Bansal, Mr. Shree Gopal Kankani and Mr. Sujitkumar Laxminarayan Sharma. The registered office is located Chhattisgarh.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuite has considered the standalone business and financial risk profile of Unique Structures and Towers Limited for arriving at the rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management and long track record of operation
Established in 1985 by Mr. VK Bansal, USTL, a Chhattisgarh-based company, is engaged into tower fabrication and galvanized steel structures. Currently led by Mr. Rishi Kumar Bansal, the company’s management boasts more than two decade of experience in tower fabrication and LPC business. Other directors, Mr. Ajay Kumar, Mrs. Sonika Bansal, Mr. Shree Gopal Kankani and Mr. Sujitkumar Laxininarayan Sharma, also bring extensive industry experience. The promoters’ enduring expertise and the company’s longstanding operational success have fostered strong relationships with key suppliers and esteemed clients. Moderate Improvement in scale of operations The company has witnessed an increase in revenue of Rs. 87.01 Cr. in FY2024 as compared to revenues of Rs. 53.67 Cr. in FY2023 and Rs. 96.70 Cr. in FY2022. The increase is attributed to factors such as high work orders with better margins and the completion of the orders of PGCIL Meghalaya, in FY 2023-24 and subsequent release of BG of this work orders. The takeover certificate is also issued for the mentioned order. Currently, USTL has an unexecuted order book position of more than Rs.500 Cr. as on 31st March 2025 which will be executed in upcoming years. Further, the company has already achieved revenue of around Rs.186 Cr. till March-25 and the company has registered the PAT of around Rs. 4.5 Cr. Going forward, Acuite believes that the revenue of the company will improve backed by high order book position, which imparts revenue visibility over to medium term. Healthy Profitability margin The operating margin of the company stood at 13.05 percent in FY2024 as compared to 16.00 percent in FY2023 and 9.89 percent in FY2022. In Q1FY2025, the operating margins of the company stood at 9.59%. This decline in operating margin in FY2024 and 1st quarter of FY2025 is on account of execution of previously received orders with lesser margins and increase in raw material cost. Acuité believes that the profitability margin of the company will improve slightly backed by better margins quoted by the company in the newer orders of MP and Chhattisgarh which will start getting executed from Q2FY2025 and in-built price escalation clause that provides cushion for covering the increased input cost. This helps the company from any large variation in the raw material prices, thus protecting the operating margins to a certain extent. Further, the PAT margin of the company also increased to 2.41 percent in FY2024 as compared to 2.05 percent in FY2023 and 1.83 percent in FY2022. In 1st quarter of FY2025 the PAT margins improved to 3.20 percent. The ROCE levels stood at 13.61 % in FY2024. Acuité believes the profitability margin of the company will be improved ls over the medium term on account of availability of adequate price escalation clause with the counter party. Moderate financial risk profile The financial risk profile of the company is moderate marked by moderate net worth, comfortable gearing and modest debt protection metrics. The adjusted tangible net worth of the company stood at Rs.40.56 Cr. as on March 31, 2024 as compared to Rs.38.47 Cr. as on March 31, 2023. The adjusted tangible net worth stood at Rs.44.52 Cr. in Q1FY2025. This improvement in networth is mainly due to the retention of current year profits in reserves. Acuité has considered unsecured loans of Rs.7.00 Cr. in the year FY2025, as quasi-equity as the management has subordinated the amount in the business. The adjusted gearing of the company stood comfortable at 0.87 times as on March 31, 2024 as compared to 0.73 times as on March 31, 2023. The adjusted gearing in 1st quarter of FY2025 stood at 0.82 times. The adjusted Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 1.50 times as on March 31, 2024 as compared to 1.27 times as on March 31, 2023. The Total Outside Liabilities/Tangible Net Worth in Q1 of FY2025 stood at 1.79 times. The adjusted debt protection metrices of the company stood modest marked by Interest coverage ratio (ICR) of 1.62 times and debt service coverage ratio (DSCR) of 1.17 times for FY2024. The adjusted net cash accruals to total debt (NCA/TD) stood at 0.10 times in FY2024. Acuité believes the financial risk profile of the company will remain moderate on account of steady net cash accruals owing to stable profitability margins with no major debt funded capex plan over the near term. |
| Weaknesses |
| Delays in servicing debt obligations
There have been delays reported in servicing debt obligation as per the credit bureau information report (CRIF) of Unique Structures and Towers Limited (USTL). The account has been classified as SMA0 for the months of December 2024 and January 2025. Working capital intensive nature of operations, although improving The working capital operations of the company is intensive marked by high but improving gross current asset (GCA) days of 354 days for FY2024 as compared to 472 days for FY2023. The GCA days are primarily on account of high receivable days and high inventory holding. The debtor days of the company stood at 145 days in FY2024 as against 223 days in FY 2023. Further, the inventory days stood at 181 days in FY2024 as compared to 185 days in FY2023. The level of inventory is expected to improve since a part of work-in progress inventory for CSTPCL project could not be billed in March 2024 due to non-approval of profile drawings by CSPTCL which stands approved in Q1FY2025. Against this, the creditors stood at 89 days in FY2024 as compared to 174 days in FY2023. Although the working capital operations of the Company will be intensive in nature but is expected to improve slightly over the medium term. Highly competitive and fragmented nature of industry The sector is marked by the presence of several mid-to large-sized players. The company specialises in tower fabrication and galvanized steel units, mainly for Power Grid Corporation of India (PGCIL), Indian Railways and Department of Telecommunication (DoT). Company faces competition from large players as well as local and small unorganized players. Most of its projects are tender based and face intense competition. This can impact the profitability of the company. However, this risk is mitigated to an extent on account of the experience of the management and the group’s well-established presence. |
| Rating Sensitivities |
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Not Applicable
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| Liquidity Position |
| Stretched |
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The liquidity position of the company is marked stretched due to instance of delay in servicing loan obligation in December 2024 and January 2025.
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| Outlook: Not Applicable |
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 87.01 | 53.67 |
| PAT | Rs. Cr. | 2.09 | 1.10 |
| PAT Margin | (%) | 2.41 | 2.05 |
| Total Debt/Tangible Net Worth | Times | 0.87 | 0.73 |
| PBDIT/Interest | Times | 1.62 | 1.48 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| 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 |
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None
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| Applicable Criteria |
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• 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 |
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