RATING RATIONALE

07Mar2025

Junaid Enterprises

Brickwork Ratings upgrades the long-term rating and reaffirms the short-term rating and removes the rating from ISSUER NOT COOPERATING* category for the Bank Loan Facilities of Rs. 40.00 Crs. of Junaid Enterprises.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (04 Dec 2024)	Present
Fund Based	3.00	22.00	Long Term	BWR C Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed	BWR B /Stable removal from ISSUER NOT COOPERATING* category/Upgraded
Non Fund Based	7.00	18.00	Short Term	BWR A4 Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed	BWR A4 removal from ISSUER NOT COOPERATING* category/Reaffirmed
Grand Total	10.00	40.00	(Rupees Forty Crores Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure

RATING ACTION / OUTLOOK

Brickwork Ratings has relied on the audited financials of "Junaid Enterprises" of FY 23, FY24 and projected financials of FY25 and FY26 and the information furnished by the client and its bankers to arrive at the present ratings.

Brickwork Ratings has upgraded the long-term rating for the bank loan facilities of Rs.40.00 crores from "BWR C" to "BWR B/Stable" while reaffirming the short-term rating at "BWR A4." The rating upgrade reflects the partner's extensive business experience, strong customer relationships, an established operational track record, and satisfactory debt protection metrics. The Bank Guarantee previously availed was manageable but however the additional limits has been proposed now. The firm is a class A contractor as registered with the Govt. department. The scale of operations and intense competition constrains the rating.

BWR believes that the business risk profile of "Junaid Enterprises" 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, profit margins show lower than expected figures or if there is a delay in debt servicing.

KEY RATING DRIVERS

Credit Strengths:

Extensive experience and support of the promoters: :
The firm's partners remain unchanged from the previous active rating.Mr.Mohammad Asgar Ali has more than 24 years of experience in the partners , while further supported by other partner Mr.Mohammad Akbar Ali who has more than 20 years of experience and Mr. Azad Manshur Ali is professionally qualified and has more than 5 years of experience.
Locational Advantage: :
The Firm is located in Ranchi, Jharkhand and have 2 branches in Orissa and bihar and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the firm more efficient and cost effective.
Improved tangible net-worth and debt protection metrics: :
The tangible net worth of the firm is increased in FY 24 to Rs.4.57Crs from Rs.2.91Crores in FY 23. The ISCR and DSCR of the firm stood at a very comfortable level of 3.07x and 1.82x respectively. The debt Protection metrics of the firm are at a comfortable level with ISCR and DSCR respectively. The balance of cash and cash equivalents stood at Rs0.99 Crores. The current ratio of the firm is comfortable with a ratio above 1 for the past two years and the same trend is seen in projections also.

Credit Risks:

Constitution: :
Withdrawal of capital by the Partners for any personal contingency would adversely affect the capital structure of the firm.
Industry competition: :
The price in the market determined and its volatility is a matter of concern. The funds released from various government departments. Tough competition in the market, changes in government policies may pose a threat.

ANALYTICAL APPROACH - Standalone

Standalone - For arriving at its ratings, BWR has considered the standalone performance of "Junaid Enterprises". BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the firm to increase its scale of operations, improve profitability, efficiently manage its working capital and strengthen its overall credit profile would be the key rating sensitivities.

Positive:

The outlook may be revised to Positive if the firm records steady growth in revenue and stable operating margin and TOL/TNW to be less than 2.25x.
Improvement in the financial risk profile and efficient working capital management, resulting in better debt coverage metrics and liquidity profile.
Improvement in liquidity by virtue of proposed enhancement in Working Capital limits and improved EBITDA resulting in comfortable liquidity position.

Negative:

The outlook may be revised to Negative if the firm reports significantly lower-than-expected performance, resulting in lower coverage indicators.
Decline in revenue or profitability leading to lower net cash accrual

LIQUIDITY INDICATORS - Stretched

The liquidity position of the firm remained stretched as characterized by cash and bank balance of Rs.0.99 in FY2024. However, the firm has been granted an additional ad-hoc limit based on the existing Cash Credit and has also proposed an additional Cash Credit facility, which is expected to enhance liquidity. EBITDA is resonabaly good at Rs.4.05Cr. The current ratio of the firm stands at 1.17x in FY2024. The net cash accruals is Rs.1.89Cr in FY2024. ISCR and DSCR of the firm stand at 3.07x and 1.82x in FY2024.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Industrials	Construction	Construction	Civil Construction

M/S Junaid Enterprises is a partnership firm which is engaged in the Civil Construction work and started since 2000. The firm is engaged in various kinds of Civil Construction work like construction of school buildings, hostels, dormitories, electrification work of buildings, boundary walls, staff quarters Etc. The firm is a registered contractor of “Hindustan Steelworks Construction Limited (HSCL), Jharkhand State Building Construction Corporation Ltd (JSBCCL), Military Engineering Services (MES), National Building Construction Corporation Limited (NBCC) and Central Public Work Department (CPWD). The firm is supported by well qualified technical experts. The partners of the firm are Mr. Mohammad Asgar Ali, Mr. Mohammad Akbar Ali and Mr. Azad Manshur Ali.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21 - 22 (Audited - Annual)	FY 22 - 23 (Audited - Annual)	FY 23 - 24 (Audited - Annual)
Operating Revenue	Rs.Crs.	21.18	17.72	49.80
EBITDA	Rs.Crs.	1.59	2.24	4.05
PAT	Rs.Crs.	73.00	0.74	1.74
Tangible Net Worth	Rs.Crs.	1.75	2.91	4.57
Total Debt / Tangible Net Worth	Times	4.32	3.45	2.33
Current Ratio	Times	1.14	1.22	1.17

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating Agency Status and Reason for Non-Cooparation Date of Press Release
CRISIL CRISIL B+ /Stable/A4 ISSUER NOT COOPERATING*; as the firm continues to be non-cooperative. 28Oct2024
CARE CARE B-/Stable/A4 ISSUER NOT COOPERATING*; as the firm continues to be non-cooperative. 08Feb2024

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CRISIL	CRISIL B+ /Stable/A4 ISSUER NOT COOPERATING*; as the firm continues to be non-cooperative.	28Oct2024
CARE	CARE B-/Stable/A4 ISSUER NOT COOPERATING*; as the firm continues to be non-cooperative.	08Feb2024

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	22.00	BWR B/Stable (removal from ISSUER NOT COOPERATING* category/Upgraded)	04Dec2024	BWR C (Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)	29Nov2023	BWR C (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	01Jul2021	BWR BStable (ISSUER NOT COOPERATING* /Downgrade)
		0.00	NA	NA	NA	NA	NA	01Sep2022	BWR B-Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
Non Fund Based	ST	18.00	BWR A4 (removal from ISSUER NOT COOPERATING* category/Reaffirmed)	04Dec2024	BWR A4 (Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)	29Nov2023	BWR A4 (Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)	01Jul2021	BWR A4 (ISSUER NOT COOPERATING* /Reaffirmation)
		0.00	NA	NA	NA	NA	NA	01Sep2022	BWR A4 (Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)
Grand Total		40.00	(Rupees Forty Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Sneha S Khapare Rating Analyst sneha.k@brickworkratings.com	Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Junaid Enterprises

ANNEXURE-I

Details of Bank Facilities rated by BWR

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	UCO Bank	Cash Credit - Sanctioned	7.90	_	7.90	Simple##
2	UCO Bank	Cash Credit - Proposed	14.10	_	14.10	Simple##
3	UCO Bank	Bank Guarantee - Sanctioned	_	5.35	5.35	Simple##
4	UCO Bank	Bank Guarantee - Proposed	_	12.65	12.65	Simple##
Total			22.00	18.00	40.00
TOTAL (Rupees Forty 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,560 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner.

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