Brickwork Ratings downgrades the Long Term Ratings of Maccaferri environmental solutions Pvt. Ltd. to BWR BBB-/Negative and reaffirms the Short Term ratings at BWR A3 and removes the ratings from Credit Watch.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (13 Mar 2020) |
Present | ||
Fund Based | 52.93 | 45.00 | Long Term |
BWR BBB Credit Watch with Negative Implications
Reaffirmed |
BWR BBB -
/Stable to Negative Downgrade |
10.00 | 10.00 | Short Term |
|
BWR A3
Reaffirmation |
|
(20.00) | (20.00) | ||||
Non Fund Based | 20.00 | 40.00 | Short Term |
BWR A3 Credit Watch With Negative Implications
Reaffirmed |
BWR A3
Reaffirmation |
(20.00) | (20.00) | ||||
(0.00) | (20.00) | ||||
Grand Total | 82.93 | 95.00 | (Rupees Ninety Five Crores Only) |
Brickwork Ratings downgrades the Long Term Ratings of Maccaferri Environmental Solutions Pvt. Ltd. to BWR BBB-/Negative, reaffirms the Short Term ratings at BWR A3 and removes the ratings from Credit Watch.
The ratings are downgraded on account of decline in profit margins in FY21 and the outlook is kept Negative in view of slower debtors realization.
KEY RATING DRIVERSCredit Strengths:
MSEPL has more than 2 decades of presence in the industry and a considerably experienced team, established network of suppliers and customers. Operations of the company are managed by professionals with industry and management experience.
As of July 2021, the Company has an order book of Rs.491 Crs which is to be executed in next 18 months. It provides revenue visibility for the Company over a medium term.
As on March 31, 2021 (prov,), TNW of the Company stood healthy at Rs.138.13 Crs. Owing to this, the Total Gearing of the Company was comfortable at 0.12x as on March 31, 2021 as against 0.09x as on March 31, 2020.
Credit Risks:
Due to increase in raw material prices and administrative expenses in FY21, operating profit of the Company significantly decreased to 1.94% in FY21 (prov.) as compared 5.82% in FY20. Owing to this, ISCR of the Company, while being moderate, reduced to 1.89x in FY21 (prov.) as against 2.25x in FY20. However, in view of proposed working capital facilities, the interest expenses are also expected to increase going forward. If the profit margins remain at the current levels then it could significantly deteriorate the debt coverage indicators.
The business operations of MESPL remained working capital intensive as its Gross Current Asset days though improved remained high at 226 days as on March 31, 2021 as against 273 days. The debtors days of the Company are high at 166 days as on March 31, 2021 (prov.). and debtors more than 6 months have increased to Rs.43.58 Crs in FY21 (prov.) (FY20:Rs.28.19 Crs) Further, as on July 31, 2021, the debtors outstanding for more than 2 years stood Rs.17 Crs. The collection of these debtors is a key rating monitorable.
BWR has principally relied upon the audited financial results up to FY20, provisional financials for FY21 , projected financials upto FY23, publicly available information and information/clarification provided by the company ' s management.
RATING SENSITIVITIES
Positive: If the Company manages to achieve its envisaged sales projections for FY22 and improve its profit margins and debt coverage indicators it would be positive for the ratings.
Negative: Any further decrease in overall credit risk profile and inability to realise its debtors in near term would be negative for the ratings.
LIQUIDITY INDICATORS - Adequate
The liquidity positive of the Company is adequate as its current ratio as on March 31, 2021 stood at 1.53x. The Company had Cash & bank balance of Rs.55.85 Crs as on June 30, 2021 and its average CC utilisation for 6 months stood at 30%
ABOUT THE ENTITYM/s. Maccaferri Environmental Solutions Private Limited (MESPL) was incorporated in 1998 and is involved in the manufacturing, supply, erection & installation, trading of Gabions, renomattresses wire, geosynthetics and natural fibre products used for solutions like Retaining Walls & Soil Reinforcement, Rockfall protection, etc. The Company has its factory units at Ranjangaon, Shirur in Maharashtra and at Una in Himachal Pradesh and has taken a new unit on lease basis at Siliguri, West Bengal for the manufacturing of gabions. Besides these the company has depots and branches across India .
MESPL is promoted by its parent company Officine Maccaferri S.P.A. headquartered in Bologna, Italy. The company is specialized in products and solutions for the infrastructure, mining, construction industry and various other industry.
On May 15, 2020, NCLT has approved the demerger shceme of manufacturing and EPC divisions of MESPL with effect from April 1, 2019. Accordingly, the manufacturing business is continued in MESPL and the operations of EPC division is transferred to resultant entity.i.e. Maccaferri Infrastructure Pvt. Ltd.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 290.26 | 322.93 |
EBITDA | Rs.Crs. | 2.85 | 24.81 |
PAT | Rs.Crs. | -4.83 | 7.02 |
Tangible Net Worth | Rs.Crs. | 144.39 | 171.88 |
Total Debt/Tangible Net Worth | Times | 0.09 | 0.29 |
Current Ratio | Times | 1.68 | 1.64 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 45.00 |
BWR BBB-/Stable to Negative
(Downgrade) |
13Mar2020 |
BWR BBB Credit Watch with Negative Implications
(Reaffirmed) |
NA |
NA
|
13Dec2018 |
BWR BBB Credit Watch with Developing Implications
(Reaffirmed) |
Fund Based | ST | 10.00 |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
FB SubLimit | ST | (20.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
Non Fund Based | ST | 40.00 |
BWR A3
(Reaffirmation) |
13Mar2020 |
BWR A3 Credit Watch With Negative Implications
(Reaffirmed) |
NA |
NA
|
13Dec2018 |
BWR A3 Credit Watch with Developing Implications
(Reaffirmed) |
NFB SubLimit | ST | (20.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
(20.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
Grand Total | 95.00 | (Rupees Ninety Five 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 CriteriaAnalytical Contacts | |
---|---|
Prashant Sahadev Mondkar Ratings Analyst Board : +91 22 2831 1426, +91 22 2831 1439 prashant.sm@brickworkratings.com |
Chintan Dilip Lakhani Director- Ratings chintan.l@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 | Axis Bank Ltd. | Cash CreditSanctioned | 20.00 | _ | 20.00 | |
Sub-Limit (EPC) Sanctioned | (20.00) | |||||
2 | Axis Bank Ltd. | Term LoanSanctioned | _ | _ | 0.00 | |
3 | Axis Bank Ltd. | Bank GuaranteeSanctioned | _ | 20.00 | 20.00 | |
Sub-Limit (Letter of Credit) Sanctioned | (20.00) | |||||
4 | Axis Bank Ltd. | Bill Discounted (BD)Sanctioned | _ | 10.00 | 10.00 | |
5 | Axis Bank Ltd. | Cash CreditProposed | 25.00 | _ | 25.00 | |
6 | Axis Bank Ltd. | Letter of CreditProposed | _ | 20.00 | 20.00 | |
Sub-Limit (Bank Guarantee) Proposed | (20.00) | |||||
7 | BNP Paribas | Cash CreditSanctioned | _ | _ | 0.00 | |
8 | Deutsche Bank | OverdraftSanctioned | _ | _ | 0.00 | |
Total | 45.00 | 50.00 | 95.00 | |||
TOTAL (Rupees Ninety Five Crores Only) |
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