Annapoorneshwari Construction

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.16.00 Crs. of Annapoorneshwari Construction

Particulars

Facilities**	Amount(Rs.Crs)	Tenure	Rating*
Fund Based	8.00	Long Term	BWR B (Pronounced as BWR Single B ) (Outlook: Stable)
Non-Fund Based	8.00	Short Term	BWR A4 (Pronounced as BWR A Four )
Total	16.00	(Rupees Sixteen Crores Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR believes the Annapoorneshwari Construction 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

BWR has essentially relied upon the audited financial statements of Annapoorneshwari Construction of FY17 and FY18 and provisional financial statements of FY19 and publicly available information and information/clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the partners established track of operations and above-average financial risk profile. However, the rating is constrained by the scale of operations, constitution of the firm and high competition from other established players in the market.

Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities.

Strengths

• Experience of the Partners:The managing partner of the firm Mr. M S Revanna is a class-1 civil contractor and has an experience of 30 years in the related field.
• Profit Margins:The firm has reported strong profit margins in FY19 with OPM of 7.78% and NPM of 7.08%.

Weakness

• Networth of the firm:The networth of the firm is too low and there has been a withdrawal of the capital by the partners and has affected the capital structure.
• Firm's Existence:The firm has pursued its business only for a couple of years.
• Geographical concentration Risk.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

LIQUIDITY POSITION

Liquidity: Stretched

The firm has a stretched liquidity position reported in the provisional financial statements of FY 19 with a current ratio of 0.84 times.

PROFILE

Annapoorneshwari Construction was registered as a partnership firm on 06.03.2017 and the firm is situated in Mysore. The firm is engaged in the construction of roads and highways and undertakes government contracts. The partner of the firm Mr. M S Revanna is a class-1 civil and electrical contractor and has 30 years of experience to his credit.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 17-18	FY 16-17
Operating Revenue	Rs.Crs	0.00	0.00
EBITDA	Rs.Crs	0.00	0.00
PAT	Rs.Crs	0.00	0.00
Tangible Net Worth	Rs.Crs	0.91	0.11
Total Debt/Tangible Net Worth	Times	0.33	0.00
Current Ratio	Times	3.62	0.00

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
1	Fund Based	Long Term	8.00	BWR B (Pronounced as BWR Single B ) (Outlook: Stable)	NA	NA	NA
2	Non-Fund Based	Short Term	8.00	BWR A4 (Pronounced as BWR A Four )	NA	NA	NA
Total			16.00	(Rupees Sixteen Crores Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

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 :

• General Criteria
• Approach to Financial Ratios
• Infrastructure Sector

For More Information Contact:

Analytical Contacts	Investor Contacts
Pardasani Umangkumar Lead Analyst umang.p@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
Nagaraj KS Associate Director - Ratings B : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742

SL.No.	Name of the Bank	Long Term(Rs.Crs)		Short Term(Rs.Crs)	Total(Rs.Crs)
		CC	TL
1	Canara Bank	8	0	8	16
	TOTAL (Rupees Sixteen Crores Only)	8	0	8	16