RATING RATIONALE
22Mar2022

Raunaq EPC International Ltd.

Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 20.00 Crs. of Raunaq EPC International Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(06 Dec 2021)
Present
Non Fund Based 20.00 20.00 Long Term BWR B-/Stable
Downgrade/ISSUER NOT COOPERATING*
BWR C
Downgrade
Grand Total 20.00 20.00 (Rupees Twenty 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

BWR downgrades the ratings of Raunaq EPC International Ltd. to BWR C. There is 46.73% decline in turnover in FY21. It is expected to go up by 1.30% in F22.TNW has decreased from Rs 13.48 Crs in FY20 to Rs. 13.19 Crs in FY21.Conversion cycle stands at -802 days in FY20 and -2608 days in FY21. Debt protection metrics are, DSCR is 1.12x and ISCR is -2.02 in FY21

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Going forward, the ability of the company to further increase its scale of operations by improving its revenue, profitability margins and financial risk profile, as usual maintaining its debt obligations and efficiently managing its working capital will be the key rating sensitivities.

Positive: The ratings may be upgraded if revenue, profitability, liquidity, gearing and overall credit profile show substantial improvement.

Negative: The rating may be downgraded in case there is a significant deterioration in business and financial risk profile of the company from its current level.

LIQUIDITY INDICATORS - Stretched

1. Net Cash Accruals in FY21 is Rs.0.69 Cr against which CPLTD is Rs 0.26 Crs. It is estimated to be in FY22 at Rs.-0.34 Cr against which CPLTD is Nil.Loan from HDFC bank is closed now
2. The Cash and Bank balances as on 31.3.2021 is Rs. 4.46 Cr which is expected to decline to Rs 2.54 Cr in FY22.
3. Debt Protection metrics are low i.e. ISCR and DSCR at -2.02x and 1.12X in FY21. Both the coverage ratios are expected to be -0.61x and 0.43x in FY22.
4. Conversion Cycle is at -2608 days in FY21 which is expected at -100 days in FY22.
5. Current ratio is moderate at 1.13x in FY21 which is expected to improve to 2.32x in FY22
6. NDS of the company is received upto Feb'22
Hence, the Liquidity of the company is stretched.

ABOUT THE ENTITY

Incepted in the year 1965,. Raunaq is an ISO 9001:2015 certified organization.“Raunaq EPC International Limited", an Engineering Contracting Organization, is engaged primarily in the service of core infrastructure and industrial sectors in India, namely Thermal Power, Chemical, Hydrocarbon and Automobile sectors.Raunaq had a wholly-owned subsidiary Company, Xlerate Driveline India Limited (XDIL) through which it carried out the business of manufacturing of Automotive Clutch Systems till December,2020 and presently, the company is an associate with 19.67% share of the company . The company was listed on BSE on 21 March 2014.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 9.87 18.53
EBITDA Rs.Crs. -3.01 -26.21
PAT Rs.Crs. -0.30 -29.22
Tangible Net Worth Rs.Crs. 13.19 13.48
Total Debt/Tangible Net Worth Times 0.42 0.71
Current Ratio Times 1.13 1.06

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 0.00
NA
NA
NA
NA
NA
04Feb2019
BWR BB-Stable
(Assignment)
Non Fund Based LT 20.00
BWR C
(Downgrade)
25May2021
BWR Bstable
(Downgrade)
04May2020
BWR B+Stable
(Downgrade)
04Feb2019
BWR BB-Stable
(Assignment)
0.00
NA
06Dec2021
BWR B-Stable
(Downgrade/ISSUER NOT COOPERATING*)
NA
NA
NA
NA
Grand Total 20.00 (Rupees Twenty 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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Moni Sharma

Ratings Analyst moni.s@brickworkratings.com

Hari Kishan Yadav

Associate Director - Ratings hari.ky@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Raunaq EPC International 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 IndusInd Bank Bank Guarantee 5.00 _ 5.00
2 State Bank Of India (SBI) Bank Guarantee 15.00 _ 15.00
Total 20.00 0.00 20.00
TOTAL (Rupees Twenty Crores Only)
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About Brickwork Ratings

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