RATING RATIONALE
19May2022
Anil Buildcon (I) Pvt. Ltd.
Brickwork Ratings reaffirms the long term and short term ratings for the Bank Loan Facilities of Rs. 28.60 Crs. of Anil Buildcon (I) Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (01 Mar 2021) |
Present | ||
| Fund Based | 0.60 | 0.60 | Long Term |
BWR BBB- /Stable
Assignment |
BWR BBB -
/Stable Reaffirmation |
| Non Fund Based | 28.00 | 28.00 | Short Term |
BWR A3
Assignment |
BWR A3
Reaffirmation |
| Grand Total | 28.60 | 28.60 | (Rupees Twenty Eight Crores and Sixty lakhs Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK
BWR has reaffirmed the long term rating of ‘Anil Buildcon (India) Pvt Ltd’ to BWR BBB- with a "Stable" outlook. BWR believes that the firm's business risk profile will be maintained over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement backed by a favorable industry scenario. The rating outlook may be revised to 'Negative' if the profit and revenue margins show lower than expected figures.
BWR has essentially relied upon the audited financial statements of ‘Anil Buildcon (India) Pvt Ltd’ for FY20, FY21 ,Sales figures for FY22 and projections of FY22 , FY23, and publicly available information and information/clarification provided by the entity's management.
The reaffirmation of ratings favorably factors in below points:
1) Qualified and experienced professionals who have demonstrated execution capabilities over the years in the sector.
2) Moderate financial profile and scale of operations.
The ratings are however constrained by:
1) The operations which are tender based and exhibit an inherent risk of uncertainty of revenue due to non availability of information from competitors.& also carries potential risk in timely implementation of various contracts.
2) Geographical concentration risk as projects executed are concentrated in the state of Chhatisgarh and Madhya Pradesh.
3) Impact on overall revenue growth due to delay in execution of work orders.
KEY RATING DRIVERSCredit Strengths:
-
Qualified and Experienced Professionals: :
The promoters are qualified and experienced and have demonstrated execution capabilities over the years in this sector. Mr. Anil Kumar Verma and Mr. Bharat Bhushan Verma have an experience of three decades in civil construction.
-
Moderate Financial Risk Profile: :
The financial risk profile of the company is moderate driven by a net worth of Rs 36.99 Cr in FY21. The profit margins of the company are moderate with OPM and NPM stood at 9.16% and 4.18% in FY21.The DSCR and ISCR stood at a moderate level of 3.55x and 6.49x respectively in FY21 indicating the adequacy of the company to service its debt obligations. The gearing ratio for FY21 is at 0.26x in FY21 as compared to 0.29x in FY20. Current Ratio is at 2.76x in FY21 as compared to 2.05x in FY20. The gearing ratio and current ratio both stand at a moderate level.
-
Scale of Operations: :
The scale of operations is moderate as the firm recorded revenue of Rs 84.66 Cr. in FY21 Vs Rs 79.53 Cr in FY20. However sales have been stagnant for the last 3 years in the range of 80-85Crs level. However, the projections for FY22 submitted last year have not been achieved.
-
Tender Based Operations: :
The operations are tender based which exhibit an inherent risk of uncertainty of revenue due to non availability of information from competitors.& also carries potential risk in timely implementation of various contracts.Also, the business remains exposed to fluctuations in profit due to volatile nature of cost of inputs like cement, iron. Any adverse fluctuation may impact the profitability of the business.
-
Geographical Concentration Risk: :
The majority of the projects executed are concentrated in the state of Chhattisgarh and Madhya Pradesh.
-
Delay In execution of work Orders: :
Few work orders are delayed which likely to impact the overall revenue growth in the near term.
BWR has essentially relied upon the standalone Audited financials of the Company upto FY21, projections upto FY23, information/clarifications provided by the management.
RATING SENSITIVITIES
Positive: The rating will be upgraded if the company is able to increase its scale of operations, improve its capital structure & working capital cycle, increase profitability and maintain an adequate liquidity profile.
Negative: The rating may be downgraded if there are lower than expected revenues affecting the profitability margins, coverage ratios, liquidity and gearing ratios adversely.
LIQUIDITY INDICATORS - Adequate
1) The liquidity position of the firm is adequate.
2) The current ratio stands at 2.76 times as of 31st March 2021 and 3.15 times as of 31st March 2022.
3) The average OD utilization of the client stands at 57%
4) Net cash accruals of 5.93crs in FY21 and projected Cash Accrual of 5.84crs in FY22 are sufficient enough to repay back its debt obligation.
ABOUT THE ENTITYABIPL was initially established as a partnership firm, Anil Construction Co, in 1985. In 2011, it was reconstituted as a private limited company, and subsequently, renamed ABIPL, the establishment of ABIPL was in the year 2011, It undertakes civil construction work (roads and bridges) in Chhattisgarh and Madhya Pradesh. Mr. Anil Kumar Verma is the promoter.
- Anil Buildcon India Pvt Ltd (ABIPL) is an infrastructure company with more than three decades of rich and varied experience in the execution of road construction related project for public work department and other related government and non- government organization in the state of Chhattisgarh & Madhya Pradesh.
- ABIPL with established credentials has a record of delivering projects on time with the highest quality.
- ABIPL business currently focuses on Infrastructure projects which include Construction of Roads & Highways, Bridges, Irrigation supporting infrastructure and Mining.
- ABIPL has successfully constructed more than 1100 Kms. of Roads and Highways (both National and State Highways) while 150 Kms. are under various stages of construction.
- ABIPL has done work for/with highly reputable clients like Public Works Department, Madhya Pradesh Rural Road Development Authority, South Eastern Coalfields Limited, Pradhan Mantri Gram Sadak Yojana and the Chhattisgarh Rural Roads Development Agency.
- The company has its corporate office & sales office in the state of chattisgarh., the company has staff of close to 100 employees.
- ABIPL practices competitive bidding strategy to acquire new clients.
History
- In the year 1985, ABIPL began with the pioneering spirit of Mr. Anil Kumar Verma who is presently the Chairman and Director of the Organization. Under his leadership, ABIPL grew in stature as a trusted agency for Road Construction Works for Public Work Department and other government and non-government organization.
- As the business expanded the Partnership Firm and was converted into a Pvt. Ltd. Company with Mr. Bharat Bhushan Verma, Sushil Kumar Verma, Pradeep Kumar Verma (J) and Mr. Pradeep Kumar Verma (R) as Directors.
- The Company has so far successfully executed over 80 projects involving more than 1100 Track Kms of works and other general Civil works over the period of 30 Years with specialization in Road Construction Works on Turnkey basis including Public Work Departments.
| Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 84.66 | 79.53 |
| EBITDA | Rs.Crs. | 7.75 | 7.77 |
| PAT | Rs.Crs. | 3.54 | 3.12 |
| Tangible Net Worth | Rs.Crs. | 36.99 | 33.45 |
| Total Debt/Tangible Net Worth | Times | 0.26 | 0.29 |
| Current Ratio | Times | 2.76 | 2.05 |
NA
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
| Rated Amount (In Crs) | Date of Rationale | Rating | CRA Name | Type |
| 28.60 | 21-Jan-2022 | B (Stable)/A4 | CRISIL | NonCooperation |
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 | 0.60 |
BWR BBB-/Stable
(Reaffirmation) |
01Mar2021 |
BWR BBB- Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
| Non Fund Based | ST | 28.00 |
BWR A3
(Reaffirmation) |
01Mar2021 |
BWR A3
(Assignment) |
NA |
NA
|
NA |
NA
|
| Grand Total | 28.60 | (Rupees Twenty Eight Crores and Sixty 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.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Jigar Manik Gogri Ratings Analyst jigarmanik.g@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 | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | State Bank Of India (SBI) | Over DraftSanctioned | 0.60 | _ | 0.60 | |
| 2 | State Bank Of India (SBI) | Bank GuaranteeSanctioned | _ | 28.00 | 28.00 | |
| Total | 0.60 | 28.00 | 28.60 | |||
| TOTAL (Rupees Twenty Eight Crores and Sixty lakhs Only) | ||||||
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