RATING RATIONALE
23Feb2021

APC Drilling & Construction Pvt. Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs.29.34 Crs. of APC Drilling & Construction Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous(11 Nov 2019) Present
Fund Based
Cash Credit Sanctioned 12.00 12.00 Long Term BWR BB - /Stable Reaffirmation BWR BB /Stable Upgrade
Covid -19 Emergency Line Credit Sanctioned 00.00 01.34
Sub Total 12.00 13.34
Non-Fund Based
Bank Guarantee Sanctioned 15.00 16.00 Short Term BWR A4 Reaffirmation BWR A4
Reaffirmation
Sub Total 15.00 16.00
Grand Total 27.00 29.34 (Rupees Twenty Nine Crores and Thirty Four 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

The rating upgrade factors in the improvement in the overall financial risk profile of the company along with directors’ experience in the same line of business, adequate debt protection metrics and comfortable gearing, established track record of operations of the company and long standing relationship with its suppliers and customers. However, the ratings are constrained by the tender based nature of business and working capital intensive nature of operations.

BWR believes the APC Drilling & Construction 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:


Credit Risks:

RATING SENSITIVITIES

Going forward, the ability of the company to increase the scale of operations, improve profitability and efficiently manage its working capital requirements would be the key rating sensitivities.

Positive:

Negative: 

LIQUIDITY INDICATORS - Stretched

The liquidity position of the company is stretched as reflected by the long conversion cycle of 189 days and high receivables of 209 days in FY20. The company has utilised around 85-90% of its working capital limits. Current ratio was adequate at 1.79 times as on March 31, 2020. Cash accruals stood at Rs.6.33 Crs and net cash accruals/total debt ratio stood at 0.28 times in FY20. The company has also been sanctioned a working capital term loan amounting to Rs.1.34 Crs by Tamilnad Mercantile Bank under the COVID-19 Emergency Credit Line Guarantee Scheme. An increase in the scale of operations and timely recovery of receivables will be key for a comfortable liquidity position.

ABOUT THE ENTITY

APC Drilling & Constructions Pvt Ltd, located in Namakkal (Tamil Nadu), was started as a partnership firm in the  year 1999 with other family members and was engaged in water drilling for more than 9 years. The firm, since 2009, has diversified its operation into core and diamond drilling for mining companies and also ventured with other companies for sampling & testing soil report.

In June 2014, the partnership firm was reconstituted into a private limited company. The company is fetching orders from Government/Private sector. It is currently headed by brothers Mr. A Pari and Mr. A Chandran, two directors. Company has skilled work force and the team includes engineers from Drilling, Hydraulics, and Mechanical engineering space along with helpers and field workers.  

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 43.28 39.38
EBITDA Rs.Crs. 10.00 12.78
PAT Rs.Crs. 4.25 -14.57
Tangible Net Worth Rs.Crs. 29.26 25.00
Total Debt/Tangible Net Worth Times 0.76 0.89
Current Ratio Times 1.79 1.59
KEY FINANCIAL INDICATORS (C.E)-
Key Parameters Units

Operating Revenue Rs.Crs. Not Available Not Available
EBITDA Rs.Crs. Not Available Not Available
PAT Rs.Crs. Not Available Not Available
Tangible Net Worth Rs.Crs. Not Available Not Available
Total Debt/Tangible Net Worth Times Not Available Not Available
Current Ratio Times Not Available Not Available

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) Rating History (2020)
Type Tenure Amount Rating NA
Fund Based
Cash Credit - Sanctioned
Covid -19 Emergency Line Credit - Sanctioned
Long Term 12.00
01.34
BWR BB/Stable NA
Non-Fund Based
Bank Guarantee - Sanctioned Short Term 16.00 BWR A4 NA
Grand Total 29.34 (Rupees Twenty Nine Crores and Thirty Four lakhs Only)

Facilities Current Rating  (2021) Rating History (2019)
Type Tenure Amount Rating 11Nov2019
Fund Based
Cash Credit - Sanctioned
Covid -19 Emergency Line Credit - Sanctioned
Long Term 12.00
01.34
BWR BB/Stable BWR BB -/Stable
Non-Fund Based
Bank Guarantee - Sanctioned Short Term 16.00 BWR A4 BWR A4
Grand Total 29.34 (Rupees Twenty Nine Crores and Thirty Four lakhs Only)

Facilities Current Rating  (2021) Rating History (2018)
Type Tenure Amount Rating 10Aug2018
Fund Based
Cash Credit - Sanctioned
Covid -19 Emergency Line Credit - Sanctioned
Long Term 12.00
01.34
BWR BB/Stable BWR BB +/Stable
Non-Fund Based
Bank Guarantee - Sanctioned Short Term 16.00 BWR A4 BWR A4
Grand Total 29.34 (Rupees Twenty Nine Crores and Thirty Four lakhs Only)
Rating Advisory, as on 23Nov2020
Press Release, as on 23Nov2020
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.

Analytical Contacts

Priyanka RS

Rating Analyst Board : +91 044 24663326 priyanka.rs@brickworkratings.com

Varadarajan R

Associate Director - Ratings Board : +91 044 24663326 varadarajan.r@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
APC Drilling & Construction Pvt. Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Cash CreditSanctioned 12.00 _ 12.00
2 Bank GuaranteeSanctioned _ 16.00 16.00
3 Covid -19 Emergency Line CreditSanctioned 1.34 _ 1.34
Total 13.34 16.00 29.34
TOTAL (Rupees Twenty Nine Crores and Thirty Four lakhs Only)
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