Brickwork Ratings reaffirms the ratings along with removal of the ratings from "Issuer Not Cooperating" category for the Bank Loan Facilities of Rs. 47.50 Crs. of Dipanshu Promoter & Builder Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (08 Jun 2021) |
Present | ||
Fund Based | 10.00 | 10.00 | Long Term |
BWR BBB-/Stable
Reaffirmation/ISSUER NOT COOPERATING* |
BWR BBB -
/Stable Reaffirmation |
Non Fund Based | 37.50 | 37.50 | Short Term |
BWR A3
Reaffirmation/ISSUER NOT COOPERATING* |
BWR A3
Reaffirmation |
Grand Total | 47.50 | 47.50 | (Rupees Forty Seven Crores and Fifty lakhs Only) |
BWR has reaffirmed the ratings for the long term bank loan facilities of Dipanshu Promoter & Builder Pvt. Ltd. (DPBPL or “The Company) for Rs.10.00 Crs. to BWR BBB-/ Stable and has reaffirmed the ratings for their short term bank loan facilities for Rs.37.50 Crs at BWR A3, (aggregate rated amount increased to Rs.47.50 Crs), along with removal of the ratings from the “Issuer Not Cooperating” category. . The reaffirmation in the rating factors in the Long track record of Operations and extensive experience of the promoters, healthy Order book position and comfortable financial risk profile, as well as adequate liquidity. The rating is however constrained by adverse impact of Covid-19, geographical concentration risk and exposure to intense competition and to risks inherent in tender-based business.
The outlook has been retained at Stable as BWR believes that the business risk profile of the Company will be maintained over the medium term. The Stable outlook indicates a low likelihood of a rating change over the medium term. The rating outlook may be revised to Positive in case of significant improvement in revenues, sustenance of order book growth, profitability, stable financial risk profile and adequate liquidity, or to Negative if there is any deterioration in order book, profitability, financial risk profile and Liquidity.
For arriving at the ratings, Brickwork Ratings has relied upon the Audited Financial statements of FY20 , Provisional Financial statements of FY21 . as well as Projections for FY22. and other information as available in the public domain, together with information / clarifications provided by the company and its bankers
KEY RATING DRIVERSCredit Strengths:
The Company has an established track record of more than two decades in the industry since inception. Moreover the promoters have extensive experience in running the business. Further, the Company is also supported by a professional team to look after its day to day operations. The firm has executed several projects in the past, primarily for the B.C.D, Building Division Bihar, Bihar State Educational Infrastructure Development Corporation Ltd, Patna (Bihar), NBCC (India) Ltd, Ranchi Jharkhand, Engineering Projects India Ltd., New Delhi etc. The entity has been primarily working with Government organizations and departments which also reduces the counterparty risk for the firm.
The Company has an order book position of Rs 1057.53 Crs in which work orders amounting to Rs.222.03 Crs are already completed. Remaining order book position of Rs.835.50 Crs is expected to be executed by the end of FY23. Order book to revenue ratio as on 31.03.2021 stood at 5.21 times which is at a healthy level providing revenue visibility for the next two years.
The company has strong debt servicing metrics on account of low interest expenses and absence of any major long term debt obligations. ISCR stood at 53.63 times in FY21(P) as against ISCR of 29.41 times in FY20. Total Debt/ TNW remained low at 0.01 times in FY21(P) as against Total Debt/ TNW of 0.02 times in FY20.Total Networth of the Company was Rs.98.61 Crs as against Total Networth of Rs.82.11 Crs in FY20.
The company reported total operating income of Rs.202.92 Crs in FY21(P) as against operating income of Rs.317.50 Crs in FY20. Decline in operating income in FY21(P) as compared to operating income of FY20 was primarily due to COVID scenario nationwide. Although the Company was continuing its construction operations in FY21, it was not receiving funds regularly from the Government authorities due to Covid scenario. The impact of the slowdown is however moderated by the fact that the Company is into construction business and it has a strong order book position as on date.
The ratings are constrained by the Company’s nature of business and exposure to a geographical concentration risk. Its operations are largely concentrated in and around Bihar and Jharkhand.
Though the firm reported healthy growth in revenue, its scale remains moderate and revenue depends on the quantum of tenders floated by government agencies. Government investment in infrastructure segments and the firm’s ability to win tenders remain critical. Furthermore, the firm remains exposed to intense competition and to risks inherent in tender-driven business which may impact profitability.
Standalone
RATING SENSITIVITIES
Positive: Sustained and substantial improvement in revenues, sustenance of order book growth, profitability, stable financial risk profile and adequate liquidity.
Negative: Deterioration in order book, profitability, financial risk profile and Liquidity.
LIQUIDITY INDICATORS - Adequate
EBITDA of Rs.25.15 Crs.in FY21(P) (Rs.38.89 Crs for FY20) was sufficient to cover the interest and finance charges of Rs.0.47 Crs in FY21(P) (Rs.1.32 Crs for FY20). Net cash accruals was Rs.19.37 Crs for FY21(P) as against Net cash accruals of Rs.27.92 Crs in FY20. Current ratio improved to 2.40 times in FY21(P) as against 1.66 times in FY20. ISCR was comfortable at 53.63 times in FY21(P) as compared to ISCR of 29.41 times in FY20. The average utilization of WC limits in the past 6 months is at around 80% as confirmed by the bankers. Future cash accruals are expected to be sufficient to cover the short term debt obligations.
ABOUT THE ENTITYIncorporated in 1998, Dipanshu Promoter & Builder Pvt. Ltd. (DPBPL) is involved in civil construction works, primarily buildings for government departments and agencies in the states of Jharkhand and Bihar. The company’s office is located in Ranchi, Jharkhand. Mr. Sanjay Kumar Singh, Mrs. Archana Singh, Mr. Vikas Kumar Sanehi and Mr. Goutam Ghoshal are the directors of the company.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Provisional) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 202.92 | 317.50 |
EBITDA | Rs.Crs. | 25.15 | 38.89 |
PAT | Rs.Crs. | 16.50 | 24.55 |
Tangible Net Worth | Rs.Crs. | 98.61 | 82.11 |
Total Debt/Tangible Net Worth | Times | 0.01 | 0.02 |
Current Ratio | Times | 2.40 | 1.66 |
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 | 10.00 |
BBB-/Stable
(Reaffirmation) |
08Jun2021 |
BWR BBB-Stable
(Reaffirmation/ISSUER NOT COOPERATING*) |
07Feb2020 |
BWR BBB-Stable
(Assignment) |
23Oct2019 |
BWR BStable
(Reaffirmation/Withdrawal) |
15Mar2018 |
BWR BStable
(Downgrade/ISSUER NOT COOPERATING*) |
Non Fund Based | ST | 37.50 |
BWR A3
(Reaffirmation) |
08Jun2021 |
BWR A3
(Reaffirmation/ISSUER NOT COOPERATING*) |
07Feb2020 |
BWR A3
(Assignment) |
23Oct2019 |
BWR A4
(Reaffirmation/Withdrawal) |
15Mar2018 |
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*) |
Grand Total | 47.50 | (Rupees Forty Seven Crores and Fifty lakhs 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.
Analytical Contacts | |
---|---|
Ambar Kumar Chauhan Ratings Analyst ambarkumar.c@brickworkratings.com |
Anuradha Gupta Director - Ratings anuradha.g@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 | Bank of India | Cash CreditSanctioned | 4.50 | _ | 4.50 | |
2 | Bank of India | Cash CreditProposed | 5.00 | _ | 5.00 | |
3 | Bank of India | Bank GuaranteeSanctioned | _ | 8.50 | 8.50 | |
4 | Bank of India | Bank GuaranteeProposed | _ | 15.00 | 15.00 | |
5 | Indian Bank | Bank GuaranteeSanctioned | _ | 14.00 | 14.00 | |
6 | Indian Bank | OverdraftSanctioned | 0.50 | _ | 0.50 | |
Total | 10.00 | 37.50 | 47.50 | |||
TOTAL (Rupees Forty Seven Crores and Fifty lakhs Only) |
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