Aditi Solar Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.32.00 Crs. of Aditi Solar Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	15.00	Long Term	BWR BB + (Stable)
Sub Total	15.00
Non-Fund Based
Bank Guarantee - Sanctioned Inland Letter of Credit (ILC) - Sanctioned	15.00 02.00	Short Term	BWR A4 +
Sub Total	17.00
Grand Total	32.00	(Rupees Thirty Two 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 that Aditi Solar 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:

• Customers and O&M network :

  ASPL's majority clientele comprises of renewable energy departments of various states and other governments, private establishments. ASPL has a dedicated operations team that is dedicated to providing maintenance services to all its installations as part of the supply agreement.

• Favourable demand outlook of solar power :

  Increasing awareness and support from both central and state governments for the promotion of solar power; hence, good demand. Favourable demand outlook on account of Jawaharlal Nehru National Solar Mission’s (JNNSM) target of 100 GW of solar capacity by 2022.

• Promoters Track record and key management personnel :

  Mr. Sri P D V Surya Narayana Raju is a technocrat with an engineering background and has more than 25 years of experience in various industries, primarily in Solar Industry. Other directors of the company are Sri Ch Siva Rama Raju. The company is managed by well qualified professionals with relevant experience in the industry.

• Comfortable Financial Risk Profile :

  As on March 31, 2019, networth was moderate at Rs 14.54 crores, gearing healthy at 1.01 times, and total outside liabilities to networth (TOL/TNW) ratio is below average at 3.69 times because of long term provisions created by the company for product warranties. The debt protection metrics of the firm are strong indicated by ISCR is 3.51 times for FY19.The firm has healthy profit margins which have grown significantly each year.

Credit Risks:

• Modest scale of operations :

  Despite Total Operating Income of Rs 64 crores in FY19 against Rs 56 crores in FY18, scale remains modest. Also, the segment is highly fragmented with the presence of very large companies as well as smaller local players. Modest scale of operations limits the company's ability to take advantage associated with economies of scale. Scale of operations is expected to increase but should remain moderate over the medium term.

• Working capital intensive operations :

  Gross current assets of around 115 days as on March 31, 2018, driven by high debtors of around 251 days, reflect working capital-intensive operations. Though the year-end figure is not the true reflection of working capital cycle, as majority of the revenues came in the last quarter of the previous three fiscals, the working capital cycle is large because of the debtor cycle of around 5-6 months.

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

Positive: The rating may be upgraded if the company if the company shows substantial improvement in overall financial profile.

Negative: The rating may be downgraded if the investment quality weakens or if the capital structure deteriorates.

LIQUIDITY POSITION

Moderate liquidity is observed based on the current ratio and cash accruals.

PROFILE

M/s. Aditi Solar Private Limited, was incorporated at Hyderabad in 2010. It is an ISO 9001:2008 and ISO 14001 :2004 company and one of the leading manufacturers of Solar Photo Voltaic Modules (SPV) Solar Inverters(PCU’s) and systems like, Solar Street Lighting System, Solar Water Pumps, Solar Power Plants and other Solar Solutions in the Country. The manufacturing unit is located at Hyderabad.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	64.24	55.58
EBITDA	Rs.Crs.	7.57	5.99
PAT	Rs.Crs.	4.02	3.39
Tangible Net Worth	Rs.Crs.	14.54	10.52
Total Debt/Tangible Net Worth	Times	1.01	1.17
Current Ratio	Times	1.64	1.49

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	Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	Long Term	15.00	BWR BB+ (Stable)	NA	NA	NA
Non-Fund Based
2	Bank Guarantee - Sanctioned Inland Letter of Credit (ILC) - Sanctioned	Short Term	15.00 02.00	BWR A4+	NA	NA	NA
Total			32.00	(Rupees Thirty Two 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
Shivangi Gupta Ratings Analyst B : +91 80 4040 9940 Ext : 347 shivangi.g@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	Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	15.00	_	15.00
2	Bank Guarantee - Sanctioned	_	15.00	15.00
3	Inland Letter of Credit (ILC) - Sanctioned	_	2.00	2.00
Total				32.00
TOTAL (Rupees Thirty Two Crores Only)