Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.14.00 Crs. of Assam Progressive Developers Ltd.
ParticularsFacility** | Amount (Rs.Crs) | Tenure | Rating* |
---|---|---|---|
Fund Based | |||
Term Loan Proposed | 14.00 | Long Term | BWR BB - (Stable) |
Sub Total | 14.00 | ||
Grand Total | 14.00 | (Rupees Fourteen Crores Only) |
Brickwork Ratings has relied on the audited financials of Assam Progressive Developers Ltd. for FY20, provisional figures for FY21, projections for FY22 and FY23 , information furnished by itself and its bankers, as well as information available in the public domain, to arrive at the present ratings.
Brickwork Ratings has assigned the rating of BWR BB- with a Stable Outlook to the proposed long term bank loan facilities of Rs.14 Crs of Assam Progressive Developers Ltd. (APDL or “the company”). The rating factors are the Long track record of operations and management experience, locational advantage, and stable financial parameters with no debt. However, the ratings are constrained by average DSCR, competition in the industry, volatility in demand depending on the overall economic situation and project execution risk.
BWR believes that the business risk profile of Assam Progressive Developers Ltd. 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, with improvement in debt protection metrics. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures or in case of time overrun or cost overrun.
Credit Strengths:
The company has been in existence for 17 years and has seen complete business cycles. Each of the directors of the company have more than 15 years of experience in the concerned industry. The company has already completed several commercial and residential projects successfully in Silchar including the prestigious “Goldighi Mall”, which is one the biggest successfully completed malls in the entire NE Region. It also has a good track record of loan repayments.
The company is located in Silchar 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.
Net worth of the company is increasing Y-O-Y due to retention of profits. The company has no existing loans from any financial institutions. The gearing was moderate at 0.31 time as on March 31, 2020 and it is 0.71 time as on March 31, 2021. The profitability margins are also comfortable. Operating profit margin was 23.60% in FY 20, whereas net-profit margin was 16.79% in FY 20. The operating profit margin has increased to 28.26% and the net profit margin has increased to 16.56% in FY21, as the company has greatly managed to reduce the cost of material and labour.
Credit Risks:
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.
The high volatility in demand in the real estate sector is a lurking risk considering the current Covid scenario and economic situation.
The real estate sector is susceptible to project execution risk in terms of time over run and cost over run.
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
The liquidity position of the company is “adequate”. The EBITDA of the company was Rs. 2.4 Crs. in FY20 and Rs. 2.00 Crs. in FY21(Prov.) and the Net Cash Accruals was Rs. 2.04 Crs. in FY20 and Rs. 2.46 Crs. in FY21(Prov). Cash and Cash Equivalents stood at Rs. 0.60 Crs. In FY20 and Rs. 0.58 Crs. In FY21(Prov). The Current Ratio of the company stood 1.28 times in FY20 and 1.85 times in FY21(Prov). All these figures look sufficient against no Interest and Finance charges. The company has no existing loans from any financial institutions.
PROFILEAssam Progressive Developers Limited incorporated in 2004 is engaged in a leading real estate and construction company of Barak Valley located in Silchar promoted by Mr. Partha Sarathi Choudhary, Mr. Kishore Saha, Mr. Rajesh Kanti Paul & Mr. Sushanta Deb Roy. The company has already completed several commercial and residential projects successfully in Silchar including the prestigious ‘Goldighi Mall’ which is one of the biggest successfully completed malls in the entire NE region.
KEY FINANCIAL INDICATORSKey Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 15.94 | 6.93 |
EBITDA | Rs.Crs. | 2.05 | 1.51 |
PAT | Rs.Crs. | 1.50 | 1.20 |
Tangible Net Worth | Rs.Crs. | 9.79 | 7.97 |
Total Debt/Tangible Net Worth | Times | 0.11 | 0.01 |
Current Ratio | Times | 1.59 | 1.19 |
S.No | Current Rating (2021) | Rating History | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Facilities | Tenure | Amount (Rs.Crs) | Rating | 2020 | 2019 | 2018 | ||||
Fund Based | ||||||||||
1 | Term Loan - Proposed | Long Term | 14.00 | BWR BB-(Stable) | NA | NA | NA | |||
Total | 14.00 | (Rupees Fourteen Crores Only) |
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 : For More Information Contact:Analytical Contacts | |
---|---|
Pranaydeep Jana Lead Analyst pranaydeep.j@brickworkratings.com |
Anuradha Gupta Director - Ratings anuradha.g@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 | North Eastern Development Finance Corporation Limited | Term LoanProposed | 14.00 | _ | 14.00 |
Total | 14.00 | 0.00 | 14.00 | ||
TOTAL (Rupees Fourteen Crores Only) |
Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
---|---|---|---|---|---|
NA | NA | NA | NA | NA | NA |
Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
---|---|---|---|
NA | NA | NA | NA |
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