Atriwal Infrastructure Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.29.50 Crs. of Atriwal Infrastructure Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Term Loan - Sanctioned Over Draft - Sanctioned Sub-Limit (WCDL) - Sanctioned	22.50 05.50 (04.50)	Long Term	BWR BB (Stable)
Sub Total	28.00
Non-Fund Based
Bank Guarantee - Sanctioned Sub-Limit (Bank Guarantee II (performance)) - Sanctioned	01.50 (00.30)	Short Term	BWR A4
Sub Total	01.50
Grand Total	29.50	(Rupees Twenty Nine Crores and Fifty lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I
Note: Term Loan of Rs. 22.50 Crs. is availed for Atriwal Infrastructure Limited Water Park and Marriage Garden Project. RATING ACTION / OUTLOOK : Stable

Brickwork ratings assigns the long-term rating at BWR BB (Stable) and short-term rating at BWR A4 for the bank loan facilities of Atriwal Infrastructure Ltd. amounting to Rs. 29.50 Crs.

BWR believes that Atriwal Infrastructure 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.

BWR has essentially relied upon the audited financial statements of Atriwal Infrastructure Ltd. of FY18, FY19, FY20, provisional of FY21 and projected financial statements of FY22 and FY23, publicly available information and information / clarifications provided by the entity’s management.

The rating draws strength from the vast business experience of the director/s, established track of operations and above average financial risk profile. However, the rating is constrained by the scale of operations, constitution of the company 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

KEY RATING DRIVERS

Credit Strengths:

• Management experience, locational advantage and project implementation :

  AIL is managed by Managing Director and Director having experience of more than a decade. The company/Firm is located in Indore cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective. Apart from the existing business of civil construction, windmill foundation work and power generation through windmill, the company is also developing integrated Water Park, Amusement Park and 5-Star Hotel at Indore, Madhya Pradesh. Approximately 65% of the work of Waterpark and Marriage Garden project is completed. The company has stopped construction of the 5-Star Hotel project to focus on the Waterpark and Marriage Garden project and once the ongoing project is completed AIL will shift its focus on 5-Star Hotel project.

• Revenue from operations and achievability of sales :

  The company's revenue from operations is from it's existing business consisting of windmill foundation work, civil construction and power generation through windmill which has grown reasonably by 14.32% in the FY21. TOI of Rs. 14.76 Crs is achieved in FY21 (Prov) v/s Rs. 12.53 Crs in FY20. The projected figure for FY22 can be achieved on the basis of sales achieved by the company from April 2021 to August 2021 amounting to Rs. 6.48 Crs.

• Moderate financial risk profile :

  DSCR and ISCR of the company stand at 1.45x and 8.42x respectively in FY21 indicating company’s adequacy to meet its debt obligations. The gearing of the company is moderate with Total Debt/TNW standing at 0.61x and TOL/TNW standing at 0.60x in FY21. The current ratio of the company has improved from 0.66x in FY20 to 1.04x in FY21. The same is projected to improve in FY22.

• High profit margins :

  Profit margins are strong with OPM standing at 41.09% in FY21 v/s 39.63% in FY20; NPM is also strong but has substantially declined to 18.94% in FY21 v/s 28.96% in FY20.

• Networth :

  Net worth of the company is increasing Y-O-Y due to retention of profits. The TNW of the company stands at Rs. 41,67 Crs. in FY21 as compared to Rs. 38.85 Crs. in FY20. The TNW of the company is projected to further increase to Rs. 44.85 in FY22.

Credit Risks:

• Competition in the Industry :

  Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability

• Customer Concentration :

  The customer concentration is high as top 3 customers contribute 97.55 % of sales.

• Accounts receivables :

  The company’s account receivable days of 139 in FY21 is a concern. The company's account receivable days is projected to increase in FY22 to 149.

• Debt funded capital expenditure and project execution risk :

  The company is developing Water park over 15.2 Acres in Madhya Pradesh. The total project cost is Rs.44.41 crore that is financed through a term loan of Rs.22.50 crore and promoter’s fund of Rs.21.91 crore. The commercial operations have been delayed from April 2021 to April 2022. However, due to the ongoing pandemic, the project is exposed to time and costs overrun risk. The company's ability to commence the project within the stipulated period would remain crucial for the medium term. Any delay in the establishment of the project will delay projected sales even further. This could adversely impact debt repayment capabilities and liquidity of the company. Further, after the project completion of the waterpark, the footfall will be adversely impacted due to COVID-19 over the near to medium term.

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 firm to improve its margins and debt servicing metrics, improve its scale of operations along with strengthening its overall financial risk profile would be its key rating sensitivity.

Positive: The rating will be upgraded if the company is able to maintain/improve its financial risk profile by improving its scale of operations, profitability and coverage ratios.

Negative: The rating may be downgraded if there is a decline in revenues affecting the profitability margins, coverage ratios, liquidity and gearing ratios adversely.

LIQUIDITY POSITION

The liquidity position of the company is moderate with current ratio standing at 1.04x in FY21 as compare to 0.66x in FY20. The current ratio is projected to improve to 1.58x in FY22. The average utilization of the limit is 60% - 70%. The cash and bank balance of the company stands at Rs. 0.10 Crs. in FY21 as compared to Rs. 0.08 Crs. in FY20, the same is projected to increase to Rs. 0.33 Crs. in FY22. The net cash accruals of the company has declined to Rs. 5.76 Crs. in FY21 as compared to Rs. 6.79 Crs. in FY20. The net cash accruals is projected to increase to Rs. 6.16 Crs. in FY22.

PROFILE

• Atriwal Infrastructure Limited (AIL) previously known as M/s Atriwal’s RMC was established in 2004. AIL is promoted by Mr. Hemant Atriwal and family.
• AIL undertakes various projects such as
  • Civil construction
  • AIL specializes in windmill foundation work.
  • AIL is also engaged in power generation through windmill located in Madhya Pradesh.
  • In addition to this, AIL is developing integrated Water Park, Amusement Park and 5-Star Hotel at Indore, Madhya Pradesh.
• AIL has availed term loan from Union Bank of India amounting to Rs. 22.50 Crs. for Water Park, Amusement Park named as Atriwal Infrastructure Limited Water Park and Marriage Garden Project.
• The Project - 5-Star Hotel at Indore, AIL has procured land and did small construction from own resources, no loan has been availed by the company for the project. The company will focus on 5-Star Hotel Project once they complete the project of Atriwal Infrastructure Limited Water Park and Marriage Garden.
• The Project - Atriwal Infrastructure Limited Water Park and Marriage Garden - On financial part AIL has already injected their part of investment (approximately 95% ) and term loan amount of Rs. 12.65 Crs. from Union Bank of India has been disbursed (approximately 60%) of total loan. As far as physical status concern approximately 65% work has completed.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 20-21 (Provisional)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	14.93	13.06
EBITDA	Rs.Crs.	6.13	5.17
PAT	Rs.Crs.	2.83	3.78
Tangible Net Worth	Rs.Crs.	41.67	38.85
Total Debt/Tangible Net Worth	Times	0.61	0.51
Current Ratio	Times	1.04	0.66

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2021)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2020	2019	2018
Fund Based
1	Term Loan - Sanctioned Over Draft - Sanctioned Sub-Limit (WCDL) - Sanctioned	Long Term	22.50 05.50 (04.50)	BWR BB (Stable)	NA	NA	NA
Non-Fund Based
2	Bank Guarantee - Sanctioned Sub-Limit (Bank Guarantee II (performance)) - Sanctioned	Short Term	01.50 00.30	BWR A4	NA	NA	NA
Total			29.50	(Rupees Twenty Nine Crores and Fifty lakhs 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
Mita Ghanshyam Gupta Lead Analyst mita.g@brickworkratings.com	Sushil Kumar Chitkara Director - Ratings B : +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	Kotak Mahindra Bank	Over Draft - Sanctioned	5.50	_	5.50
	Sub-Limit (WCDL) - Sanctioned	(4.50)
2	Kotak Mahindra Bank	Bank Guarantee - Sanctioned	_	1.50	1.50
	Sub-Limit (Bank Guarantee II (performance)) - Sanctioned		(0.30)
3	Union Bank of India	Term Loan - Sanctioned	22.50	_	22.50
Total			28.00	1.50	29.50
TOTAL (Rupees Twenty Nine Crores and Fifty lakhs Only)

Note: Term Loan of Rs. 22.50 Crs. is availed for Atriwal Infrastructure Limited Water Park and Marriage Garden Project.