Brickwork Ratings upgrades the long-term rating to BWR BB/Stable and reaffirms short-term at A4 & removes from INC category for the Bank Loan Facilities of Rs. 25.00 Crs. of Shyama Construction.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (07 Oct 2024) |
Present | ||
| Fund Based | 3.00 | 6.50 | Long Term |
BWR C
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed |
BWR BB
/Stable Upgrade and Removed from the INC category |
| Non Fund Based | 7.00 | 18.50 | Short Term |
BWR A4
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed |
BWR A4
removal from ISSUER NOT COOPERATING* category/Reaffirmed |
| Grand Total | 10.00 | 25.00 | (Rupees Twenty Five Crores Only) | ||
Brickwork Ratings has upgraded long-term rating to BWR BB /Stable & reaffirms short-term rating at A4 & removes from INC category for Shyama Constructions This rating reflects the experience of the promoters & growth in operating income.
BWR believes that the business risk profile of Shyama Construction will be maintained over the medium term. The long-term rating has been assigned a ‘Stable’ outlook as the business risk profile of the company is stable and its present financial performance is expected to be maintained in the medium term. The rating outlook may be revised to 'Positive' in case there is an improvement in revenues and profit margins on a sustained basis. The rating outlook may be revised to 'Negative' if there is any deterioration in the financial risk profile or liquidity issues.
Brickwork Ratings (BWR) has essentially relied upon the audited financial statements of the company upto FY24(A), relevant data to the extent available for 12MFY25(Prov.), projected financials for FY26 and FY27, as well as information/clarifications provided by the company’s management and its bankers, to arrive at the present ratings.
KEY RATING DRIVERSCredit Strengths:
Proprietors has been in the business for over a decade now. Mr Mohit Yadav is used to assist his father in the business wherein he was involved in maintaining relationships with various government agencies from where the concern secured its work orders.
The concern is a class A contractor registered with UP government and carries out road construction & maintenance work for government agencies only, thus minimizing the payment risk.
The concern has a strong networth position which stood at Rs.14.89 Crores as on 31st March 2024. The gearing has been low year on year because of very limited fund based exposure. Gearing as on 31 March 2024 was at 0.94 times and overall gearing (TOL/TNW) was at 1.02 times.
Withdrawal of capital by the proprietor for any personal contingency would adversely affect the capital structure of the concern.
Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability.
The concern is exposed to the risks associated with government tender based business and also the risk of delays in project completion.
For arriving at its ratings, BWR has considered the standalone performance of Shyama Construction. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive :
A rating upgrade could be driven by achieving sustained growth in revenues as per the projections, along with consistent improvement in OPBDIT and PAT. Improved profitability margins, with the operating margin (OPM) rising above 10% on a sustained basis. Successful realization of payments given govt. contracts.
Negative:
A rating downgrade may be triggered by an inability to achieve the projected revenue and profit growth, with the operating margin dropping below 4%. An increase in Total Debt/TNW above 1.0x would indicate higher leverage risk.
LIQUIDITY INDICATORS - Adequate
| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Industrials | Construction | Construction | Civil Construction |
M/S Shyama Construction (Prop. Firm) is engaged in execution of EPC construction contracts awarded by various govt bodies. This firm has started business during FY 18. However, M/s Shyama Construction (Prop. Mr. Ram Dulare Yadav), Agra, UP, was engaged in the same activity for many years, but has ceased to exist with the demise of Mr. Ram Dulare Yadav in Jan. 2018. Mr. Ram Dulare Yadav was the father of Mr. Mohit Yadav & Rohit Yadav. The firm has two directors Mr Rohit Yadav and Mr. Mohit Yadav.
Sister concerns of the directors are M/S SRM Fuels and M/S Shyama fuels ( Partnership firms)
The Head office of the proprietorship firm is in Agra and has two branches in Nagaland and Assam.
The Firm is engaged in civil engineering projects, infrastructural works, state highways, national highways, & bridges.
Major raw material inputs are Bitumen,Cement, Steel, Grit and Coarse sand.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 22 - 23 (Audited) |
FY 23 - 24 (Audited) |
FY 24 - 25 (Provisional) |
|---|---|---|---|---|
| Operating Revenue | Rs.Crs. | 26.29 | 34.74 | 76.19 |
| EBITDA | Rs.Crs. | 2.48 | 3.37 | 5.59 |
| PAT | Rs.Crs. | 1.30 | 1.74 | 3.74 |
| Tangible Net Worth | Rs.Crs. | 12.41 | 14.89 | 15.97 |
| Total Debt / Tangible Net Worth | Times | 0.43 | 0.94 | 0.76 |
| Current Ratio | Times | 1.68 | 2.18 | 1.28 |
Standard Covenants as per sanction letter in such cases.
Not Applicable
ANY OTHER INFORMATIONNIL
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2025) | 2024 | 2023 | 2022 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 6.50 |
BWR BB/Stable
(Upgrade and Removed from the INC category) |
07Oct2024 |
BWR C
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed) |
26Sep2023 |
BWR C
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded) |
06Sep2022 |
BWR B-Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded) |
| Non Fund Based | ST | 18.50 |
BWR A4
(removal from ISSUER NOT COOPERATING* category/Reaffirmed) |
07Oct2024 |
BWR A4
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed) |
26Sep2023 |
BWR A4
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed) |
06Sep2022 |
BWR A4
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed) |
| Grand Total | 25.00 | (Rupees Twenty Five Crores Only) | |||||||
| Analytical Contacts | |
|---|---|
|
Surabhi Bisht Ratings Analyst surabhi.b@brickworkratings.com |
Ravi Rashmi Dhar Associate Director - Ratings ravi.d@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | Customer Support | CustSupport@brickwrokratings.com |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | Complexity of the Instrument |
|---|---|---|---|---|---|---|
| 1 | Bank of India | Over DraftSanctioned | 6.50 | _ | 6.50 | Simple## |
| 2 | Bank of India | Bank GuaranteeSanctioned | _ | 18.50 | 18.50 | Simple## |
| 3 | HDFC Bank | Bank GuaranteeSanctioned | _ | _ | 0.00 | Simple## |
| 4 | HDFC Bank | Over DraftSanctioned | _ | _ | 0.00 | Simple## |
| Total | 6.50 | 18.50 | 25.00 | |||
| TOTAL (Rupees Twenty Five Crores Only) | ||||||
## 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.
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
|---|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| Nil | Nil | Nil | Nil |
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