Ashish Jindal Builders Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.00 Crs. of Ashish Jindal Builders Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Cash Credit - Sanctioned Cash Credit - Proposed	04.30 00.70	Long Term	BWR BB - (Stable)
Sub Total	05.00
Non-Fund Based
Bank Guarantee - Proposed	02.00	Short Term	BWR A4
Sub Total	02.00
Grand Total	07.00	(Rupees Seven 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

Brickwork Ratings has assigned the rating of M/s Ashish Jindal Builders Pvt Ltd. for Bank loan facilities as BWR BB-/A4 (Outlook: Stable). The rating takes into account the promoters experience, current order book and moderate financial risk profile. However the rating is constrained by the scale of operations and intense competition in the industry.

The Rating has been assigned a ‘stable’ outlook as company’s performance and business risk profile is likely to be maintained in the medium term.

KEY RATING DRIVERS

Credit Strengths:

• Management Experience :

  The promoters have more than 15 years of experience in the same line of business. They were earlier undertaking the tender-based projects through their partnership firm. The company is listed SS category for MES (Super Special unlimited tendering limit) which allows the company to undertake any project without restriction on the size of the project.

• Good order position in hand :

  Healthy order book of around Rs.100.00 crore provides revenue visibility for the medium term.

• Financial Risk profile :

  Financial risk profile is moderate with comfortable gearing ratio (Total debt/TNW) of 1.59x and current ratio of 1.59 times in FY19. Interest coverage metrics of 4.18 times indicates the ability of the company to service interest obligation comfortably.

Credit Risks:

• Small scale of operations :

  The total operating income of the company declined from Rs. 27.77 crore in FY18 to Rs. 22.63 crore in FY19. However, they have booked a turnover of Rs. 32.35 crores in 7-months of current financial year. The small scale limits the company’s financial flexibility in times of stress.

• Exposure to risk associated with tender based business :

  The company undertakes the Govt. projects awarded through open tendering and faces intense competition from other established contractors in the market.

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).

RATING SENSITIVITIES

Going forward, the ability of the company to successfully bid in Govt. tenders and improvement in capital structure would be key rating sensitivities.

Positive: The rating outlook may be revised to positive if the company is able to surpass its projections with considerable margins along with significant improvement in profitability.

Negative: The rating may be downgraded if there is a delay in debt servicing, substantial decline in revenues and deterioration in the liquidity profile of the company.

LIQUIDITY POSITION

Adequate: Liquidity of the company is marked by net cash accruals as a percentage of total debt at 19%, current ratio of 1.59 times and Interest coverage ratio of 4.18 times for FY19. The average utilization of Bank Loan limits in the last 7 months is around 57%. The overall position of the liquidity is adequate.

PROFILE

Bhatinda based, Ashish Jindal Builders Pvt Ltd (“AJB” or “The Company”) was incorporated in 2014. The company is registered with Military Engineer Services as ‘SS’ class contractor and undertakes the civil construction projects. The company is promoted by Mr. Ashish Jindal and Mr. Harsh Kumar Jindal, who carries the rich experience in the business of undertaking civil contracts.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	22.63	27.77
EBITDA	Rs.Crs.	1.67	2.24
PAT	Rs.Crs.	0.97	1.44
Tangible Net Worth	Rs.Crs.	3.61	2.64
Total Debt/Tangible Net Worth	Times	1.59	1.57
Current Ratio	Times	1.59	1.56

KEY COVENANTS OF THE INSTRUMENT/FACILITY RATED

NA

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
Fund Based
1	Cash Credit - Sanctioned Cash Credit - Proposed	Long Term	4.30 0.70	BWR BB- (Stable)	NA	NA	NA
Non-Fund Based
2	Bank Guarantee - Proposed	Short Term	2.00	BWR A4	NA	NA	NA
Total			07.00	(Rupees Seven 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
• Short Term Debt

For More Information Contact:

Analytical Contacts	Investor Contacts
Gaurav Jain Ratings Analyst B : +91 11 2341 2232 Ext : 111 gaurav.j@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
Satvinder Kumar Gakhar Associate Director - Ratings B : +91 11 2341 2232 satvinder.g@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Bank Guarantee - Proposed	_	2.00	2.00
2	Cash Credit - Sanctioned	4.30	_	4.30
3	Cash Credit - Proposed	0.70	_	0.70
Total				7.00
TOTAL (Rupees Seven Crores Only)