Vijay Transmission Pvt Ltd

Brickwork Ratings reaffirms the long-term and short-term rating to BWR BB + /Stable & BWR A4 respectively ratings for the Bank Loan Facilities of Rs. 47.00 Crs. of Vijay Transmission Pvt Ltd

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (17 May 2021)	Present
Fund Based	29.00	29.00	Long Term	BWR BB+ /Stable Reaffirmation	BWR BB + /Stable Reaffirmation
Non Fund Based	18.00	18.00	Short Term	BWR A4 Reaffirmation	BWR A4 Reaffirmation
	(5.00)	(5.00)
	(3.00)	(3.00)
Grand Total	47.00	47.00	(Rupees Forty Seven 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

Brickwork Ratings has reaffirmed the long-term and short-term rating to BWR BB + /Stable & BWR A4 respectively of Vijay Transmission Pvt Ltd for Bank loan facilities. Brickwork Ratings(BWR) has essentially relied on the audited financial statements of Vijay Transmission Pvt Ltd up to FY21, provisional FY22 and projection for FY23, and information/clarifications provided by the company’s management and its bankers to arrive at the present ratings. The rating further draws strength from management experience, Total Operating Income & Profitability,Reputed Clients. The rating is partially offset by the Vulnerability to cyclical nature of industry, Moderate Financial Risk,Product concentration risk Profile raw material price fluctuations and Intense Competition.

BWR believes that Vijay Transmission Pvt Ltd business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

Management Experience :
Company’s promoters have over four decades of experience in steel and power industries. Over the years of operations they have been able to establish business relationship with customers and suppliers which leads to repeat orders.
Total Operating Income & Profitability :
The Company recorded total operating income of Rs. 196.96 crs in FY22 vs Rs.112.43Crs in FY21. TOL/TNW is at a moderate level of 3.13x times in FY22 vs 3.14x times in FY21. Current ratio is at a moderate level of 1.38x in FY 22 vs 1.30x in FY21. ISCR is at a moderate level of 1.70x times in FY22 vs 1.29x times in FY21.
Reputed Clients :
Company’s customer base consists of reputed parties such as Larsen & Toubro Ltd, GE T&D India Ltd, Siemens Ltd etc:.

Credit Risks:

Financial Risk :
OPM declined substantially to 5.89% in FY22 vs 8.04% in FY21 and NPM margin has improved considerably in FY22 at 0.55% vs 0.29% in FY21. The liquidity position of the firm seems adequate though CC utilization is high. Working capital is highly stretched due to the high level of Gross Current Asset which accounts for 98% of sale in FY22. The same in turn is due to high level of Inventory of Rs 77.82 Cr in FY21. due to the design of each tower may differ from the previous tower and different orders have different delivery schedules and dispatch. DSCR is at a low level of 1.04x times in FY22 vs 1.14x times in FY21.
Product concentration risk :
Company derives significant portion of its revenues from its top five customers, thereby, leading to client concentration risk in its revenue profile.Company’s working capital cycle is getting stretched year-on-year marked by increasing receivables and inventory asnumber of days to sales.

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 the business and financial risk profile of the company from its current level

LIQUIDITY INDICATORS - Stretched

The company's liquidity position remained stretched as reflected CC utilization is at 97.61% in the last six months. Also, the company reported cash accruals of Rs. 2.15 Crs as of FY22 & Cash and bank balances for FY22 is Rs 0.0036 Crs

ABOUT THE ENTITY

The company was incorporated in 2006 as a Fabrication and Galvanizing unit of Steel Structures and Transmission Line Towers. The products
manufactured by the company are Power Transmission Towers ( 66 kV to 765 kV), Lattice & Pipe Type - Sub -Station Structures ( 66 kV to 765 kV),
Rooftop & GBT Telecom / Communication Towers (12 mts to 150 mts), Rural Electrification Structures – RJP Poles, V-Cross Arms, Clamps,
Earthing Strips etc.
Product Mix: The products manufactured by the company are Power Transmission Towers ( 66 kV to 765 kV), Lattice & Pipe Type - Sub -Station
Structures ( 66 kV to 765 kV), Rooftop & GBT Telecom / Communication Towers (12 mts to 150 mts), Rural Electrification Structures – RJP Poles,
V-Cross Arms, Clamps etc, Earthing Strips etc.
Customer Base: Its customers are leading EPC players in power transmission & distribution industry, state power utilities etc. Its customer base
includes players like Suzlon, Siemens, Enercon, Lanco Group, Maharashtra State Electricity Board(MSEB), Nuclear Power (I) Ltd, BHEL, NTPC,
MSETCL, Alstom T&D, L&T- ECC, ABB, Tata Power, Tata Projects, Crompton Greaves, Kalpataru Power Transmission Limited, KEC International
Ltd , Schneider Electric, Godrej etc. Private players constitute about 75% of customer base, rest 25% are Govt. players. Geographical Diversity:
Its customers are located all over the country.
Raw Material Management: Raw materials are mainly Steel and Zinc. Steel angles, channels, plates are fabricated to required sizes. Zinc is used
in the galvanization process. Steel are procured from local steel plants in Raipur and Nagpur. Around 20% of steel materials are purchased from
group steel trading companies Vijay Steel Corporation Pvt. Ltd. and SKN Ventures. Its payable days are around 80-100 days.
Power Arrangement: Power is purchased from Chhattisgarh State Electricity Board.
Manpower: The company has around 130 permanent technical, managerial, supervisory roles. In addition to this around 200 skilled and
unskilled labour force work on contractual basis.
Future Plans: The company has started getting small orders for supplying Pant Steel to Indian Railways. Its marketing team are exploring
opportunities in Solar Equipments.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	112.43	131.20
EBITDA	Rs.Crs.	9.04	10.91
PAT	Rs.Crs.	0.32	1.09
Tangible Net Worth	Rs.Crs.	32.67	32.37
Total Debt/TNW	Times	1.52	1.34
Current Ratio	Times	1.30	1.29

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	29.00	BWR BB+/Stable (Reaffirmation)	17May2021	BWR BB+ Stable (Reaffirmation)	03Mar2020	BWR BB+ Stable (Reaffirmation)	27Feb2019	BWR BB+ Stable (Reaffirmation)
Non Fund Based	ST	18.00	BWR A4 (Reaffirmation)	17May2021	BWR A4 (Reaffirmation)	03Mar2020	BWR A4 (Reaffirmation)	27Feb2019	BWR A4 (Reaffirmation)
NFB SubLimit	ST	(5.00)	BWR A4 (Reaffirmation)	NA	NA	NA	NA	NA	NA
		(3.00)	BWR A4 (Reaffirmation)	NA	NA	NA	NA	NA	NA
Grand Total		47.00	(Rupees Forty Seven Crores Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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
Bhavna Vashdev Gurdasani Ratings Analyst bhavna.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

Vijay Transmission Pvt 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	Axis Bank Ltd.	Cash Credit - Sanctioned	18.00	_	18.00
2	Axis Bank Ltd.	Bank Guarantee - Sanctioned	_	7.00	7.00
	Sub-Limit (Letter of credit) - Sanctioned		(3.00)
3	HDFC Bank	Cash Credit - Sanctioned	11.00	_	11.00
4	HDFC Bank	Bank Guarantee - Sanctioned	_	11.00	11.00
	Sub-Limit (Letter of credit (Sub Limit of PBG)) - Sanctioned		(5.00)
Total			29.00	18.00	47.00
TOTAL (Rupees Forty Seven Crores Only)

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