Sahyog Jankalyan Samiti

Brickwork Ratings has upgraded the ratings for the reduced aggregate long term Bank Loan Facilities of Rs. 54.10 Crs of Sahyog Jankalyan Samiti.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (05 Apr 2021)	Present
Fund Based	74.03	54.10	Long Term	BWR BBB- /Stable Upgrade	BWR BBB /Stable Upgrade
Grand Total	74.03	54.10	(Rupees Fifty Four Crores and Ten 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

Based on annual review, Brickwork Ratings (BWR) has upgraded the rating of the reduced long term bank loan facilities of Sahyog Jankalyan Samiti.(SJS or the society) for Rs.54.10 Crs from BWR BBB-/Stable to BWR BBB/Stable. The rating upgrade factors in the experienced management of the society, improvement in its financial risk profile, addition of new academic courses as per market requirements, besides above average enrolment ratio, diversified course offerings and revenue streams, and adequate liquidity. The rating is, however, constrained by inherent and regulatory risks associated with the education sector.

Brickwork Ratings has relied upon the audited financials of the company for FY 19, FY 20 and FY 21, provisional financials for FY 22 and projected financials for FY23 and FY24, besides information available in public domain as well as feedback from the society and its lenders, for arriving at the present rating.

BWR believes that the business risk profile of Sahyog Jankalyan Samiti will be maintained over the medium term, and the 'Stable' outlook assigned indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the total gross receipt and surplus show sustained improvement. The rating outlook may be revised to 'Negative' if the total gross receipts go down and surplus margins show lower than expected figures on a continuous basis.

KEY RATING DRIVERS

Credit Strengths:

Experienced Managment :
The founder of the society, Mr. Pranveer Singh, has experience of more than two decades in the education sector. The promoters are also backed by an advisory team of academicians and other experts in their fields who look after activities of all the colleges run under the society.
Improvement in financial risk profile of the socity :
The financial performance of the society has improved, as indicated by improvement in total gross receipts and corpus fund, while maintaining healthy profitability margins and debt coverage indicators in FY22 (provisional). The total gross receipt of the society has increased to Rs.103.76 Crs in FY22 (provisional), as compared to Rs.95.82 Crs in FY21. Operating surplus has remained comfortable and increased to Rs.55.40 Crs in FY22 (provisional) compared to Rs.52.72 Crs in FY21. The total debt to corpus fund ratio remained below unity, and stood at 0.81 times as on 31st March 2022 (provisional) as compared to 0.61 times in FY 21.The interest coverage ratio (ISCR) and debt service coverage ratio (DSCR) of the company stood comfortable at 6.54 times and 3.03 times respectively in FY21 and the same has improved to 10.11 times and 3.82 times respectively in FY22 (provisional).
Diversified Courses and revenue streams :
The society runs 6 professional educational colleges, under the brand name of Pranveer Singh Institute of Technology (PSIT), and offers courses in the streams of engineering, pharmacy, business management, education and law. Besides regular tuition fees, income from boarding facilities, transportation facilities and co-curricular activities are other dominant revenue generators.
Addition of new courses as per market requirements :
The society has been regularly adding new course streams as per the market requirements. During AY2020-21, the society added courses under ML (Machine Learning), AI (Artificial Intelligence), DS (Data Science) and IoT (Internet of Things) to cater to rising demand for professionals under these skills.
Above average enrolment ratio :
Despite high competition from other similar institutions, the colleges run by the society have been able to achieve approx. 80% enrolment ratio for the past three years indicating its robust market reputation and standing in the area.

Credit Risks:

Inherent risks associated with Education Sector :
Amid increasing competition, attracting quality students year on year and getting them placed, retaining qualified faculties, ability to pass on increase in expenses etc are some of the key business risks.
Business Concentration Risks :
Business is concentrated in Kanpur, U.P, where the region is flooded with similar educational institutes. Also, any adverse decision by AICTE or the UP government. may jeopardize the operating revenues.
Regulatory risks :
The education sector is highly regulated by the government which is an inherent risk for the sector. The society has limited powers in deciding the tuition fees. Any statutory capping on tuition fees to be charged by the society may adversely affect the operating revenues.

ANALYTICAL APPROACH - Standalone

Standalone

RATING SENSITIVITIES

Positive Triggers :

The Rating of the society may be upgraded in case of significant increase in the total gross receipts while maintaining or improving upon the the operating and net surplus margins. Improvement in current ratio and operating efficiency of the society would be other factors that would be considered for any upgradation. .

Negative Triggers :

Decline in Gross receipt & deterioration of the financial position of the society, besides any delay in payments of its debt obligations would be considered .adversely and would have a negative impact on the rating.

LIQUIDITY INDICATORS - Adequate

The liquidity of the society stands adequate as reflected by the moderate cash credit utilization ~at 70% for the past six months ended April, 2022. Liquidity is further supported by comfortable ISCR and DSCR of 10.11 times and 3.82 times respectively in FY 2022 (provisional). The net cash accruals of the society stood comfortably at Rs. 50.62 as per FY22 (provisional) against debt obligation of Rs.21.60 Crs.In FY 23 (projected). The society has projected the net cash accruals to be Rs. 42.53 Crs against the maturing debt obligations of Rs.17.40 Crs. Liquidity is also supported by comfortable cash and cash equivalent stood at Rs. 3.37 Crores as on 31st March 2021 and Rs. 15.58 Crores as on 31st March 2022 (provisional). However the liquidity is partially offset by a continuing low current ratio.

ABOUT THE ENTITY

Sahyog Jankalyan Samiti, a society registered under the Societies Registration Act 1860 in 2001, runs various professional educational colleges in Kanpur, U.P. The registered office of the society is in Model Town, Pandu Nagar, Kakadev, Kanpur. Ms. Anshuka Singh is the Chairman and Mr. Pranveer Singh is the Secretary of the society. The society established its first college, Pranveer Singh Institute of Technology in 2004. Other colleges are PSIT College of Engineering (estd. 2008), PSIT College of Management (estd. 2017), PSIT College of Higher Education (estd. 2015), PSIT College of Law (estd. 2018) and PSIT Polytechnic (estd. 2019) run under the aegis of the Society.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	95.82	93.75
EBITDA	Rs.Crs.	52.72	38.85
PAT	Rs.Crs.	31.34	20.70
Tangible Net Worth	Rs.Crs.	110.98	79.65
Total Debt/Tangible Net Worth	Times	0.61	0.97
Current Ratio	Times	0.67	0.45

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	54.10	BWR BBB/Stable (Upgrade)	05Apr2021	BWR BBB- Stable (Upgrade)	26Mar2020	BWR BB+ Stable (Downgrade/ISSUER NOT COOPERATING*)	21Feb2019	BWR BBB- Stable (Reaffirmation)
Grand Total		54.10	(Rupees Fifty Four Crores and Ten 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.

Analytical Contacts
Saroj Kumar Das Ratings Analyst sarojkumar.d@brickworkratings.com	Ashwini Mital Director - Ratings Board : +91 172 5032 295 / 6 ashwinimital@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Sahyog Jankalyan Samiti

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	Canara Bank	Term Loan - Sanctioned	9.50	_	9.50
2	HDFC Bank	Term Loan - Sanctioned	10.00	_	10.00
3	Indian Bank	Cash Credit - Sanctioned	10.00	_	10.00
4	State Bank Of India (SBI)	Term Loan - Sanctioned	24.60	_	24.60
Total			54.10	0.00	54.10
TOTAL (Rupees Fifty Four Crores and Ten lakhs Only)

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