Sthira Infra Projects Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.2.92 Crs. of Sthira Infra Projects Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Term Loan - Out-standing Term Loan - Out-standing Term Loan - Sanctioned Term Loan - Sanctioned	01.68 00.71 00.45 00.08	Long Term	BWR BB - (Stable)
Sub Total	02.92
Grand Total	02.92	(Rupees Two Crores and Ninety Two lakhs 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 that Sthira Infra Projects 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:

• Experience of the directors and strong management team :

  Mr. S Navin is an MBA graduate and is the managing director of the company and directly supervises the projects. Smt. J Sriveni is a graduate with previous experience in construction and handles the financials of the company. Mr. Srinivas is a commerce and law graduate who heads the finance & legal team. Mr. P. Koteswararao is a graduate with more than 10 years of experience in construction. He monitors the construction activities at all sites, with the support of his team of young qualified site engineers.

• Healthy order book position :

  Sthira Infra Projects Pvt. Ltd. has completed three residential projects in Visakhapatnam and has a consistent track record. The company is upcoming with three more projects in the same region and has a healthy order book position of Rs. 107 Crs. spread over the next financial years which will help it to achieve the projected revenue and strengthen the financial profile.

Credit Risks:

• Moderate scale of operations and low networth :

  The scale of the operation of the company is relatively low with a total operating income of Rs. 13.92 Crs. in the fiscal ended 31st March 2019. Further, the networth of the company is significantly low with Rs. 3.14 Crs. which results in a leveraged capital structure with debt to equity of 1.99 times and TOL/TNW (total outside liabilities to tangible networth) of 3.77 times.

• Presence in a highly competitive industry and geographical concentration risk :

  The Indian construction industry is highly fragmented with a large number of organized and unorganized players leading to intense competition and limiting the pricing power resulting in low profitability. Further, the company is only undertaking projects in the Visakhapatnam region which exposes it to 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: Adequate

The current ratio of the firm stood at 1.99 times as of 31st March 2019 reflecting adequate liquidity. The EBITDA of the company is sufficient to service the interest and finance obligations reflecting with the ISCR and DSCR of 3.46 and 1.57 times respectively. The net cash accruals of the company have increased to Rs. 1.14 Crs. in FY19 as against Rs. 0.46 Crs. in FY18. Given the EBITDA. debt protection metrics and net cash accruals and a comfortable current ratio the liquidity position of the company is adequate.

PROFILE

Sthira Infra Projects Pvt. Ltd. was incorporated in the year 2012 having a registered office in Visakhapatnam. The company is engaged in the construction of residential flats and societies under the brand name of Fame Realty. Mr. S. Navin and Smt. J Sriveni are the directors of the company having 8 years of business experience in the infrastructure sector.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	13.92	4.78
EBITDA	Rs.Crs.	2.13	1.08
PAT	Rs.Crs.	0.96	0.38
Tangible Net Worth	Rs.Crs.	3.14	2.18
Total Debt/Tangible Net Worth	Times	1.99	2.21
Current Ratio	Times	1.99	2.23

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2020)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2019	2018	2017
Fund Based
1	Term Loan - Out-standing Term Loan - Out-standing Term Loan - Sanctioned Term Loan - Sanctioned	Long Term	01.68 00.71 00.45 00.08	BWR BB- (Stable)	NA	NA	NA
Total			02.92	(Rupees Two Crores and Ninety Two 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
• Infrastructure Sector

For More Information Contact:

Analytical Contacts	Investor Contacts
Umang Pardasani Ratings Analyst B : +91 80 4040 9940 Ext : 370 umang.p@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K Nagaraj Associate Director - Ratings B : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Term Loan - Out-standing	1.68	_	1.68
2	Term Loan - Out-standing	0.71	_	0.71
3	Term Loan - Sanctioned	0.45	_	0.45
4	Term Loan - Sanctioned	0.08	_	0.08
Total				2.92
TOTAL (Rupees Two Crores and Ninety Two lakhs Only)