Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs.30.00 Crs of Avishkar Innovative Pvt Ltd
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (18 Feb 2021) |
Present | ||
| Fund Based | 30.00 | 30.00 | Long Term |
BWR BB ISSUER NOT COOPERATING/Stable
Reaffirmation/ISSUER NOT COOPERATING* |
BWR BB
/Stable Reaffirmation |
| Grand Total | 30.00 | 30.00 | (Rupees Thirty Crores Only) | ||
Credit Strengths:
The promoters have extensive business experience in the line of test programming services, spanning over two decades. The company, with an established track record of 5 years, is a technology integrator that offers services and turnkey solutions in Automation Products & Embedded domain.
The 100% export oriented company enjoys established relationships with its clients. The company is currently executing the project for its single client- M/s BMB Ltd, New Zealand and enjoys the patronage of the customer for more than 4 years, thereby getting additional orders. The Company has pending orders worth ~USD 30 Mn (~INR 222 Cr) from the client for execution within the next 1-2 years, providing near term revenue visibility.
The company’s risk profile continues to remain moderate reflected by modest revenue, improved profitability and networth, moderate gearing and adequate debt protection metrics. The company's entire revenue is from a single project. Operating income improved to Rs.109.23 Crs in FY20 against Rs.48.22 Crs in FY19. EBITDA and PAT were to Rs.11.84 Crs and Rs. 4.82 Crs respectively for FY20 against Rs.12.41 Crs and Rs.4.72 Crs in FY19. Tangible net worth improved to Rs.18.40 Crs and the Total debt/Tangible net worth was 1.99 times (PY : 2.57 times), as on 31st March 2020.Debt servicing capabilities remained adequate reflected by ISCR of 5.19 times during FY20. On a provisional basis, the company achieved a revenue of Rs.82.56 Crs and PAT of Rs.4.17 Crs in FY21.
The company derives its entire revenue through exports, thereby exposing its turnover and profitability to demand trends and economic downturns in the key export markets as well as fluctuations in foreign exchange rates. However, BWR notes that the company’s forex exposure is naturally hedged to some extent by way of packing credit facility availed in foreign currency.
The ratings are sensitive to customer concentration as the company sources its entire revenue from a single client in the past as well as the pending order book. However the company is receiving additional orders from the same client, in view of the long term relationship.
AIPL operates in a highly competitive information technology service providers industry segment, which restricts pricing flexibility.
The Company has large working capital requirements, as reflected in the elongated conversion cycle due to the high inventory holding days (resulting from software under development) over the last 3 years, which is in line with the industry trend.
BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale). The Company does not have any subsidiaries.
RATING SENSITIVITIES
The ability of the Company to improve the scale of operations, profitability and gearing level, manage risks from forex fluctuations, diversification of the order book/ customer concentration risks and ensure efficient management of working capital will remain crucial determinants of its credit profile.
Positive
Negative
The company’s utilization of working capital continues to remain almost full over the last 12 months. However, Current ratio was adequate at 2.38 times as on 31 Mar 2021 (Provisional). EBITDA comfortably covered the interest obligation during FY21. Project cash accruals of ~Rs.7 Crs are sufficient to cover the repayment obligation of ~Rs.2 Cr in FY23, towards the Covid emergency credit line (GECL).
ABOUT THE ENTITYAvishkar Innovative Pvt Ltd was incorporated in 2015, at Bangalore, Karnataka. The Company is a technology integrator company that offers services and turnkey solutions in Automation Products & Embedded domain. It provides automation solutions to companies operating in the field of telecommunications, embedded systems, education & media development, insurance, transport, utilities, education, medical. The company also provides security solutions to IT Infrastructure through surveillance products and server, storage and virtualization services. Mrs. Raksha Udupa and Mrs. Sulochana Udupa are the directors.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 109.23 | 48.22 |
| EBITDA | Rs.Crs. | 11.84 | 12.41 |
| PAT | Rs.Crs. | 4.82 | 4.72 |
| Tangible Net Worth | Rs.Crs. | 18.40 | 13.58 |
| Total Debt/Tangible Net Worth | Times | 1.99 | 2.57 |
| Current Ratio | Times | 2.91 | 2.45 |
The terms of sanction include standard covenants normally stipulated for such facilities.
N.A.
ANY OTHER INFORMATIONNil
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2021) | 2021 (History) | 2020 | 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 30.00 |
BWR BB/Stable
(Reaffirmation) |
18Feb2021 |
BWR BB ISSUER NOT COOPERATINGStable
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
29Nov2019 |
BWR BBStable
(Upgrade) |
29Aug2018 |
BWR BB-Stable
(Assignment) |
| Grand Total | 30.00 | (Rupees Thirty 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.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Naveen S Manager - Ratings Board : +91 80 4040 9940 naveen.s@brickworkratings.com |
Saakshi Kanwar Senior Manager Ratings saakshi.k@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Canara Bank | Packing Credit in Foreign Currency (PCFC)Sanctioned | 30.00 | _ | 30.00 | |
| Total | 30.00 | 0.00 | 30.00 | |||
| TOTAL (Rupees Thirty Crores Only) | ||||||
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