Brickwork Ratings upgrades the long term rating while reaffirms the short term rating for the Bank Loan Facilities of Rs. 44.94 Crs. of Imperial Constrafin Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (26 Apr 2021) |
Present | ||
| Fund Based | 25.00 | 19.94 | Long Term |
BWR B+ (Stable) Downgraded ISSUER NOT COOPERATING*
|
BWR BB -
/Stable Upgrade |
| Non Fund Based | 25.00 | 25.00 | Short Term |
BWR A4 Downgraded ISSUER NOT COOPERATING*
|
BWR A4
Reaffirmation |
| Grand Total | 50.00 | 44.94 | (Rupees Forty Four Crores and Ninety Four lakhs Only) | ||
The ratings reflect the promoters’ experience in civil construction business, established operational track record, revenue visibility supported by moderate order book position and moderate financial risk profile. These strengths are partially set off by project implementation risks of ongoing projects, concentration risk and the fragmented and highly competitive nature of the industry.
The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR expects that Imperial Constrafin Pvt Ltd’s business risk profile will be maintained over the medium term. The outlook may be revised to Positive if the company achieves projected revenue, sustains profitability and Improves debtor position while maintaining its moderate financial risk profile. The outlook may be revised to Negative if any significant delays in execution of key orders or slowdown in new order inflows adversely impacts the company’s revenues and profitability or if there is deterioration in its financial risk or liquidity position.
KEY RATING DRIVERSCredit Strengths:
Imperial Constrafin Pvt Ltd is specialized in undertaking sub contract work such as construction of roads, bridges, remodelling of storm water drains and construction of commercial space for software development centres. It also undertakes maintenance work, improvement and value addition for software and industrial buildings and has an established track record of over two decades. The promoter, Mr.Zabulon Athisayam has a demonstrated track record of more than two decades in the civil construction industry.
Financial profile has been moderate in the past marked by Debt/TNW of 0.91 times and 1.20 times respectively as on 31 March 2021 and 31 March 2020. Tangible Net Worth (TNW) of Rs 35.56 Crs and Rs 40.10 Crs, respectively as on 31 March 2020 and 31 March 2021 (Prov.). Total Debt as on 31 March 2021 majorly consist of working capital loan. Moderate debt service coverage ratio, marked by ISCR and DSCR of 2.72 and 2.16 times, respectively in FY21. Operating profit margins were strong at 26.78% and 18.45%, respectively in FY21 and FY20.
The company is exposed to project execution risk of work order, owing to the uncertainties in the construction industry. Imperial Constrafin Pvt Ltd, like any other construction company, is exposed to the risks inherent in the construction sector including slowdown in new order inflows, risks of delays in execution, vulnerability of margins to adverse variation in the raw material, labour and other input costs. The profitability is exposed to volatility in raw material prices. Operating Income declined to Rs 31.57 Crs in FY21 from Rs 69.98 Crs in FY20 due to non execution of work orders from April-Sept 2021 on account of Covid-19 pandemic situation. The company has recorded revenue of Rs 16 Crs in 2MFY2022 and expected to achieve revenue of Rs 100-120 Crs in FY22 on the back of outstanding order book of Rs 82 Crs and expected work orders, to be awarded in FY22. The ability of the company to achieve the projected revenue would be a key rating monitorable.
The company is exposed to customer concentration risk as top two customers contributed entirely in total revenue in FY21 and geographical concentration risk as the business operation is confined to states of Karnataka. ICPL is exposed to order book concentration risk as three of the projects consist entirely of its total outstanding orderbook (Rs.82 Crs).
For arriving at its ratings, Brickwork Ratings has adopted a standalone approach and applied its rating methodology as detailed in the Rating criteria below. The Company has no subsidiary.
1. General Criteria (link - http://www.brickworkratings.com/download/Criteria-GeneralCriteria.pdf)
2. Approach to Financial Ratios (link - http://www.brickworkratings.com/download/Criteria-FinancialRatios.pdf)
3. https://www.brickworkratings.com/download/Criteria%20%E2%80%93EPC-Companies-Web-Version_1.4.pdf
4. Short Term Debt (link - https://www.brickworkratings.com/download/Criteria-ShortTermDebt.pdf)
LIQUIDITY INDICATORS - Stretched
Liquidity of the Company is stretched marked by high working capital loan utilization level of 88.18% in the past three months ended May 2021 and receivable days of 612 days and 168 days, respectively as on 31 March 2021 and 2020. Debtors were high at Rs 57.88 Crs and Rs 47.95 Crs, respectively as on 31 March 2021 and 2020. Current ratios were moderate at above 1.0 times, in the last three years ended 31 March 2021. The Company has not availed the Covid 19 related RBI moratorium package. The Net Cash Accruals will be adequate for CPLTD (CPLTD of Term loan from Bank) of Rs0.72 Crs in FY22 and working capital utilization is expected to be high in FY22.
ABOUT THE ENTITYImperial Constrafin Pvt Ltd (or ICPL) was incorporated in 1996 at Bangalore, Karnataka. The company undertakes sub contract work such as construction of bridges, remodeling of storm water drains etc. It also undertakes construction for corporates such as construction of commercial space for software development centres. The company undertakes maintenance work, improvement and value addition for software and industrial buildings.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 69.98 | 86.82 |
| EBITDA | Rs.Crs. | 12.91 | 10.97 |
| PAT | Rs.Crs. | 7.86 | 7.04 |
| Tangible Net Worth | Rs.Crs. | 35.56 | 27.70 |
| Total Debt/Tangible Net Worth | Times | 1.20 | 1.13 |
| Current Ratio | Times | 1.15 | 1.05 |
| Facilities | Current Rating (2021) | 2021 (History) | 2020 | 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 19.94 |
BWR BB-/Stable
(Upgrade) |
26Apr2021 |
BWR B+ (Stable) Downgraded ISSUER NOT COOPERATING*
() |
NA |
NA
|
12Nov2019 |
BWR BB/Stable Assigned
() |
NA |
NA
|
| Non Fund Based | ST | 25.00 |
BWR A4
(Reaffirmation) |
26Apr2021 |
BWR A4 Downgraded ISSUER NOT COOPERATING*
() |
NA |
NA
|
12Nov2019 |
BWR A4+ Assigned
() |
NA |
NA
|
| Grand Total | 44.94 | (Rupees Forty Four Crores and Ninety Four lakhs 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.
| Analytical Contacts | |
|---|---|
|
Thakur Trinath Prasad Pani Rating Analyst thakur.tp@brickworkratings.com |
Nagaraj K Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@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 | Canara Bank | Open Cash Credit / Cash Credit (Hypothecation/Pledge)Sanctioned | 7.50 | _ | 7.50 | |
| 2 | Canara Bank | Open Cash Credit / Cash Credit (Hypothecation/Pledge)Proposed | 6.50 | _ | 6.50 | |
| 3 | Canara Bank | Bank GuaranteeSanctioned | _ | 15.00 | 15.00 | |
| 4 | Canara Bank | Bank GuaranteeProposed | _ | 10.00 | 10.00 | |
| 5 | Canara Bank | COVID Funded Interest Term LoanOut-standing | 0.67 | _ | 0.67 | |
| 6 | Canara Bank | GECLOut-standing | 5.27 | _ | 5.27 | |
| Total | 19.94 | 25.00 | 44.94 | |||
| TOTAL (Rupees Forty Four Crores and Ninety Four lakhs Only) | ||||||
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