All India Society for Electronics and Computer Technology(AISECT)

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 12.59 Crs. of All India Society for Electronics and Computer Technology(AISECT)

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (18 Dec 2020)	Present
Fund Based	18.00	12.59	Long Term	BWR BBB /Stable Reaffirmation	BWR BBB /Stable Reaffirmation
Grand Total	18.00	12.59	(Rupees Twelve Crores and Fifty Nine 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

BWR has reaffirmed the long term rating of All India Society for Electronics and Computer Technology(AISECT) to BWR BBB/Stable. The rating draws strength from promoter’s experience over two decades in the education sector, diversified geographical presence and further expansion , strong financial risk profile, moderate profit margins and liquidity position. The rating is however constrained by moderate and reduced scale of operations , enrollment risk, vulnerability to regulatory risk associated with the education sector and exposed to negative impact of COVID 19.

BWR believes that the business risk profile of All India Society for Electronics and Computer Technology(AISECT) will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term.

KEY RATING DRIVERS

Credit Strengths:

Diversified Geographical presence and Further Expansion :
AISECT has diversified geographical presence with campuses at Kargi Road, Kota, Bilaspur, (G.G.) as well as newly acquired campus at Vaishali, Bihar. It also provides Regular, Distance Education Courses and Certifications. AISECT has its Skill Knowledge Providers (SKP's) located across PAN India wherein they provide counselling for admission to its courses
Extensive experience of Management: :
The management team have extensive experience of over 20 years each in the industry with the founder Mr. Santosh Chaubey himself with over 40 years of experience. Over the last year, AISECT has won multiple accolades from government and non government organisations with respect to its education, infrastructure and management.
Financial Risk Profile :
The financial risk profile of the company is marked with a modest total net worth of Rs.99.75cr in FY21 and projected to improve to Rs. 103.52 Cr in FY22 and Rs. 107.99 Cr in FY23 .

The capital structure with gearing at 0.13x as per the FY21. Due to covid19 Profit margins is decline in FY21 and projected to remain moderate to Rs. 0.13 Cr in FY22 and improve to Rs.0.09 FY23.

NPM marked to 0.39% and Projected to improve to 9.38% in FY22 & 9.03% in FY23.

OPM to 14.29% in FY21 and Projected to improve to 26.20% in FY22 and 21.52% in FY23 .

Coverage ratios with DSCR and ISCR are at 1.64x and 3.11x in FY21. The current ratio reported at 5.36x in FY21 is adequate.
Scale of Operations :
The scale of operations has remained fluctuating over the last couple of years.

YTD for the months of April 2021 to February 2022 has reached Rs. 38.35Cr. AISECT recorded sales of Rs 27.78 Cr in FY21 & The sale has reached to Rs38.35 Cr from April 2021 to February 2022. with the trend of reaching the revenue in the increasing order it estimated the Projected of Rs.40.50Cr and Rs.49.50Cr in FY22 & FY23, is very close. The Current Ratio of the Firm is 5.36X in FY21.( OD limit is 41.79%).

Credit Risks:

Impact of Covid-19 pandemic: :
The ongoing Covid pandemic and the related disruptions have resulted in delays in commencement of offline classes and delays in admission for AY 21-22 which is now expected to be completed by October 2021. The ability of the institutions to maintain student enrollment and ensure timely collection of fees shall be monitorable.
Intense competition from other reputed institutes :
The educational institutions face intense competition from other reputed institutions. They have to compete with other established institutions in order to recruit and retain quality teaching and non teaching staff at competitive remuneration and also attract good students at reasonable course fees by highlighting the features and prospects of the courses offered by them. The society is also exposed to geographical concentration risk as all the institutions are located in Bilaspur, Chhattisgarh which makes operations vulnerable to any social or political changes in the region.
Vulnerability to Regulatory risk associated with the Education Sector: :
The educational institutions are regulated by various bodies, namely, University Grants Commission (UGC), All India Council for Technical Education (AICTE), Paramedical Council of India, and are vulnerable to regulatory changes and as well intense competition from large and established players.

ANALYTICAL APPROACH - Standalone

BWR has factored in the standalone business parameters and financial risk profile of the company to arrive at the rating. Reference may be made to the Rating Criteria hyperlinked detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the entity to accelerate its scale of operations, its profit margins, compliance of bank's sanction terms, efficiently manage its working capital and cash flows for timely servicing of interest/debt obligations and strengthening of overall financial risk profile shall be the key rating sensitivities over short to medium term..

Positive: The rating outlook may be revised to positive or rating may be upgraded if the company is able to sustain its growth and profit margins. Any additional infusion of share’s capital would help to improve its capital structure of the entity.

Negative: The rating outlook may be revised to negative or rating may be downgraded if the entity achieves lower revenue and profit margins than projected.

LIQUIDITY INDICATORS - Adequate

The liquidity profile of the company is adequate driven by a moderate current ratio of 5.36x during FY21. The liquidity is projected to remain at a moderate level at 5.51x in FY22 and 6.02x in FY23 The cash and cash equivalents stood at Rs 5.76 Crs. as on February 2022. The Net Cash accruals of the company appear to be sufficient to discharge the matured debt obligations in FY22 and FY23. The utilisation of OD facility is 41.79%

ABOUT THE ENTITY

M/S All India Society for Electronics and Computer Technology (AISECT) was founded in 1985 by Mr. Santosh K. Choubey for providing skill development, educational and training services in semi-urban and rural areas of the country. In 2006, the society started a private university in the name of Dr. C. V. Raman University under section 2(f) of the University Grant Commission Act, 1956. AISECT is engaged in printing & publications of study materials, e-inclusion and bank business correspondent service through AISECT Ltd. operation of educational universities in Bilaspur (Chhattisgarh), Bhopal (MP), Khandwa (MP), Hazaribagh (Jharkhand) and Vaishali (Bihar) through AISECT Group of Universities providing both Regular as well as Distance Education courses and skill Development Courses in association with NSDC. AISECT also has nearly 20,000 Skill Knowledge Providers (SKP's) for dissemination of information.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	27.78	48.16
EBITDA	Rs.Crs.	3.97	11.80
PAT	Rs.Crs.	0.11	3.09
Tangible Net Worth	Rs.Crs.	99.75	99.63
Total Debt/Tangible Net Worth	Times	0.13	0.10
Current Ratio	Times	5.36	4.48

KEY COVENANTS OF THE FACILITY RATED

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

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	12.59	BWR BBB/Stable (Reaffirmation)	NA	NA	18Dec2020	BWR BBB Stable (Reaffirmation)	12Jul2019	BWR BBB Stable (Reaffirmation)
Grand Total		12.59	(Rupees Twelve Crores and Fifty Nine 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
Akansha R. Mudgil Ratings Analyst akansha.rm@brickworkratings.com	Sushil Kumar Chitkara Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

All India Society for Electronics and Computer Technology(AISECT)

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	Central Bank of India	Term Loan - Sanctioned	1.06	_	1.06
2	Central Bank of India	Dropline OD - Sanctioned	7.63	_	7.63
3	Central Bank of India	Emergency Credit Line Guarantee Scheme (ECLGS) - Sanctioned	2.43	_	2.43
4	Central Bank of India	Emergency Credit Line Guarantee Scheme (ECLGS) - Sanctioned	1.47	_	1.47
Total			12.59	0.00	12.59
TOTAL (Rupees Twelve Crores and Fifty Nine lakhs Only)

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