RATING RATIONALE
03Nov2021

Asian Construction Company

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 101.30 Crs. of Asian Construction Company

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(05 Aug 2020)
Present
Fund Based 42.57 46.30 Long Term BWR BBB/Stable
Reaffirmation
BWR BBB /Stable
Reaffirmation
Non Fund Based 55.00 55.00 Short Term BWR A3+
Reaffirmation
BWR A3 +
Reaffirmation
Grand Total 97.57 101.30 (Rupees One Hundred One Crores and Thirty lakhs 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 reaffirmed the Long term rating to BWR BBB with a stable outlook and short term rating to BWR A3+.

The reaffirmed ratings, inter alia, factor the experienced partners, Central and State government departments being the primary customers, comfortable gearing and debt protection metrics, healthy order book position and efficient working capital management. The ratings, however, are constrained by the risk associated with the tender based business and timely execution of contracts, volatility in raw material prices and inherent risk associated with the constitution of the firm.

The outlook of the company is stable as the company has adequate orders in hand which provides revenue visibility in the medium term.

 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied its rating methodology as debited in the Rating Criteria detailed below ( hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Positive: The rating may be revised upward in case the revenues and profit show sustained improvement backed by healthy liquidity.

Negative: The rating may be revised downward in case revenue of the company deteriorates substantially from the current level or the company is not able to maintain its order book at a reasonable level. Rating may also be adversely affected in case of adequate deterioration in gearing and debt coverage ratios.

 

LIQUIDITY INDICATORS - Adequate

ACC has a Cash Credit limit of Rs. 35 crs and its average utilization of the fund-based limits stood at ~74% in the six month period (from April 2021 till Sep 2021). The firm has a long-term repayment obligation of Rs.3.11 Cr. in FY22, which is projected to be repaid from the internal accruals. The firm generated cash profit of Rs.11.42 cr. in FY21 (Prov.), against Rs. 13.82 Crs in FY20. ACC does not have any major capex plans going forward.

 
 

ABOUT THE ENTITY

Asian Construction Company was established in 1989 as a partnership firm involved in civil construction business by Mr. Ajit Singh Yadav, Mr. Surender Kumar Yadav and Mr. Daya Yadav. The partners have significant experience in the field of civil construction and have implemented various projects for Government entities such as Central Public Works Department (CPWD), Military Engineer Services (MES), and Public Works Department (PWD). The firm secures orders from public sector enterprises or their subcontractors through tender participation and precures orders mainly of Delhi, Uttar Pradesh and Madhya Pradesh. 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 249.11 216.97
EBITDA Rs.Crs. 18.57 16.89
PAT Rs.Crs. 10.69 9.57
Tangible Net Worth Rs.Crs. 43.24 37.73
Total Debt/Tangible Net Worth Times 1.32 0.71
Current Ratio Times 2.80 2.42

RATING HISTORY FOR THE PREVIOUS 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 46.30
BWR BBB/Stable
(Reaffirmation)
05Aug2020
BWR BBBStable
(Reaffirmation)
16May2019
BWR BBBStable
(Assignment)
NA
NA
Non Fund Based ST 55.00
BWR A3+
(Reaffirmation)
05Aug2020
BWR A3+
(Reaffirmation)
16May2019
BWR A3+
(Assignment)
NA
NA
Grand Total 101.30 (Rupees One Hundred One Crores and Thirty lakhs 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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Neha Wahi

Ratings Analyst Board : +91 11 2341 2232 nehawahi@brickworkratings.com

Sudeep Sanwal

Associate Director - Ratings sudeep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Asian Construction Company
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 Bank of Baroda Term LoanSanctioned _ _ 0.00
2 Bank of Baroda Term LoanSanctioned _ _ 0.00
3 Bank of Baroda Term LoanSanctioned _ _ 0.00
4 Bank of Baroda Term LoanSanctioned 1.60 _ 1.60
5 Bank of Baroda Over DraftSanctioned 35.00 _ 35.00
6 Bank of Baroda Bank GuaranteeSanctioned _ 55.00 55.00
7 Bank of Baroda Gold CardSanctioned 3.50 _ 3.50
8 Bank of Baroda GECLSanctioned 6.20 _ 6.20
Total 46.30 55.00 101.30
TOTAL (Rupees One Hundred One Crores and Thirty lakhs Only)
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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.

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