RATING RATIONALE
31Aug2021

GVV Constructions Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 88.00 Crs. of GVV Constructions Pvt. Ltd.

Particulars
Facilities** Amount(Rs.Crs.) Tenure Rating#
Fund Based 15.00 Long Term BWR BBB - /Stable
Assignment
Non Fund Based 73.00 Short Term BWR A3
Assignment
Grand Total 88.00 (Rupees Eighty Eight Crores Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK

Brickwork Ratings has relied upon Audited financials of the company for FY 18, FY 19 and FY 20 along with its Provisional financials of FY 21 and Projected financials of FY 22 and FY 23, information available in public domain as well as feedback from the company and its bankers for arriving at the present rating.

Brickwork Ratings has assigned a rating of BWR BBB- with a Stable Outlook to the long term bank loan facilities of Rs. 15,00 Crores of GVV Constructions, Pvt. Ltd, and a rating of BWR A3 to their short term bank loan facilities of Rs. 73.00 Crores. The assignment of the ratings factors in experienced management, healthy financial risk profile, healthy order book position, reputed client and supplier base, as well as adequate liquidity. The rating is however, constrained by moderate scale of operations, delay in realization of sales,  Working Capital intensive nature of operations, tender based nature of business, Project Execution Risk and Stiff Competition in the Industry. 

BWR believes that the business risk profile of GVV Constructions Pvt. Ltd. (GCPL) will be maintained over the medium term, and the 'Stable' outlook assigned, indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures on a continuous basis.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH

Standalone

RATING SENSITIVITIES

Positive Triggers :

Negative Triggers:

LIQUIDITY INDICATORS - Adequate

The liquidity of the company stands adequate as reflected by the comfortable cash credit utilisation ~at 82% for the last six months ended July 2021. The company presently does not have any major debt-led capex plans and long term repayment obligations. Liquidity is further supported by a comfortable ISCR & DSCR of 1.88 times and 1.59 times respectively in FY 20 and 2.35 times and 1.93 times respectively in FY 21 Provisional. Further the current ratio stood comfortable at 2.64 times in FY 20 (FY19: 2.63 times) and the same has remained at the same level as per FY 21 Provisional; standing at 2.31 times. The Net Cash accruals stood at Rs.5.12 Crs in FY 20 and Rs.6.26 Crs in FY 21 Provisional, which is adequate to take care of repayment obligations.

ABOUT THE ENTITY

GVV Construction Pvt. Ltd. is an Odisha based Pvt. Ltd. company promoted by Mr. G V V Rao and his friend Mr. N Suresh Reddy in 2004. The company commenced execution of projects in February 2008. Prior to that the business was carried under a partnership firm since 1991. The company undertakes civil construction and road construction activities such as irrigation, road and railway projects. The company is a Super class contractor registered under NHAI and Water Resource department of various State Governments.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 80.20 64.28
EBITDA Rs.Crs. 6.80 4.93
PAT Rs.Crs. 1.09 1.96
Tangible Net Worth Rs.Crs. 43.12 41.99
Total Debt/Tangible Net Worth Times 0.40 0.41
Current Ratio Times 2.64 2.63

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 15.00
BWR BBB-/Stable
(Assignment)
NA
NA
NA
NA
NA
NA
Non Fund Based ST 73.00
BWR A3
(Assignment)
NA
NA
NA
NA
NA
NA
Grand Total 88.00 (Rupees Eighty Eight Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

Analytical Contacts

Saroj Kumar Das

Ratings Analyst sarojkumar.d@brickworkratings.com

Anuradha Gupta

Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
GVV Constructions Pvt. Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Indian Overseas Bank Cash CreditSanctioned 15.00 _ 15.00
2 Indian Overseas Bank Bank GuaranteeSanctioned _ 73.00 73.00
Total 15.00 73.00 88.00
TOTAL (Rupees Eighty Eight Crores Only)
Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,400 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

Disclaimer

Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.