Brickwork Ratings Revises the long term rating while Reaffirming the short-term ratings for the Bank Loan Facilities of Rs. 127.42 Crs. of Woodhill Infrastructure Ltd
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (18 May 2020) |
Present | ||
| Fund Based | 54.70 | 40.42 | Long Term |
BWR BB+/Stable
#Reaffirmation |
BWR BB
/Stable Downgrade |
| Non Fund Based | 73.30 | 87.00 | Short Term |
BWR A4+
#Reaffirmation |
BWR A4 +
Reaffirmation |
| Grand Total | 128.00 | 127.42 | (Rupees One Hundred Twenty Seven Crores and Forty Two lakhs Only) | ||
Brickwork has downgraded the long term rating to BWR BB (Stable) and reaffirmed the short term rating to BWR A4+ of Woodhill Infrastructure Ltd (WIL). The rating downgrade is led by delay in servicing of debt, over utilization in cash credit facility and deterioration in financial profile over the years.
The ratings draw comfort from the extensive experience of the promoters, working with government entities, comfortable gearing ratio, moderate debt protection metrics, healthy order book position and improvement in financial profile in FY21. The rating is, however, constrained by risk associated with tender based business, timely execution of contracts, working capital intensive operations and continuous decline in TOI & Profitability in last four years (FY17 - FY 20).
The outlook of the company is Stable as the company has a healthy order book position.
KEY RATING DRIVERSCredit Strengths:
Mr. Deepak Kant Gupta, Mr. Vivek Bhati, Mr. Shiv Kumar Kasana, Mr. Siddhartha Singh, Mr. Peeyush Gupta, Mr Dinesh Kumar Sharma and Mr. Vimla Devi are the directors of the company. The promoters of the company are engaged in road and highway construction business for more than two decades now.
Company has been working with government departments i.e State PWD (Public Works Department) and NHAI (National Highway Authority of India) and also with Rail Vikas Nigam Ltd for road and highway construction. Company has lower counter party risk associated with these customers. Also the company has been able to recover all the payments within an average period of 85 days after issuing the running account bill. Woodhill has been executing contracts in multiple states namely Uttar Pradesh, Uttarakhand, New Delhi and Odisha.
After four years of continuous decline in Total operating income, the company has reported an improvement in Total operating income in FY 21 (provisional) to Rs. 189.42 Crs against Rs. 160.96 Crs of TOI in FY 20. The overall profitability of the company has improved in FY 21(provisional) as EBITDA margin and net profit margin improved in FY 21(provisional) to 8.50% and 2.24% from 7.05% and 1.88% reported in FY 20 respectivelyCompany has moderate debt protection metrics as interest service coverage ratio and debt service coverage ratio stood at 1.75x and 1.51x as on FY21 (provisional) against 1.23x and 1.38x as on FY20 respectively. Company has a comfortable Gearing Ratio (i.e total overall liability/ tangible net worth) at 0.89 times as on FY21.
Credit Risks:
Since revenue depends on winning tenders in a competitive bidding process, the margins available to the company are restricted. Due to decline in order book of company, the company has faced continuous decline in topline as total operating income has declined from Rs. 355.22 Crs in FY17 to Rs. 160.96 Crs in FY20.
The industry is highly competitive and characterized by the presence of a large number of players in the unorganized and organized segment Further, presence of various players, limits bargaining power which exerts pressure on its margins.
Gross current assets comprising inventory and receivables level was very high at 269 days in FY 21 as compared to 300 days in FY20 which necessitates dependence on external working capital.
Positive: The rating may be upgraded upon improvement in liquidity and sustained improvement in overall EBITDA leading to deleveraging.
Negative: The rating outlook may be revised downward in case revenues and EBITDA of the company substantially deteriorates from current level. Rating may also be adversely affected in case of further deterioration in liquidity and coverage ratios.
LIQUIDITY INDICATORS - Stretched
The company is availing cash credit facility of Rs. 40.42 Crs from PNB, ICICI Bank and HDFC Bank. The company has WIL’s liquidity is supported by cash and equivalents of Rs. 8.89 Crs as on 31.03.2021. The average utilization of the fund-based limits was more than 90% over the 12 months ended July 2021. The cash accruals has improved from Rs.5.50 Crs in FY20 to Rs. 6.44 Crs in FY21 (Provisional) against the CPLTD of Rs. 1.16Crs. The liquidity of company is stretched as delays in servicing of interest of cash credit facility up to 30 days were confirmed by bankers.
ABOUT THE ENTITYWoodhill Infrastructure Ltd(WIL) was incorporated in 1990 in New Delhi engaged in EPC constructor mainly engaged in construction of roads (earthwork, widening, strengthening and resurfacing of state and national highways), bridges, highways, underground works and flyovers. Company is registered as “A” class for civil works with various government departments. Currently, company has been constructing roads, bridges & highway in Odisha, Uttar Pradesh, New Delhi and Uttarakhand.
Mr. Deepak Kant Gupta, Mr. Vivek Bhati, Mr. Shiv Kumar Kasana, Mr. Siddhartha Singh, Mr. Peeyush Gupta, Mr Dinesh Kumar Sharma and Mr. Vimla Devi are the directors of company.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 160.96 | 192.08 |
| EBITDA | Rs.Crs. | 11.34 | 13.92 |
| PAT | Rs.Crs. | 3.02 | 0.22 |
| Tangible Net Worth | Rs.Crs. | 127.67 | 124.65 |
| Total Debt/Tangible Net Worth | Times | 0.50 | 0.57 |
| Current Ratio | Times | 2.19 | 1.97 |
| Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 40.42 |
BWR BB/Stable
(Downgrade) |
18May2020 |
BWR BB+Stable
(#Reaffirmation) |
NA |
NA
|
13Dec2018 |
BWR BB+ Stable
(#Initial) |
| Non Fund Based | ST | 87.00 |
BWR A4+
(Reaffirmation) |
18May2020 |
BWR A4+
(#Reaffirmation) |
NA |
NA
|
13Dec2018 |
BWR A4+
(#Initial) |
| Grand Total | 127.42 | (Rupees One Hundred Twenty Seven Crores and Forty Two 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.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Neha Wahi Ratings Analyst Board : +91 11 2341 2232 nehawahi@brickworkratings.com |
Tanu Sharma Director - Ratings tanusharma@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 | HDFC Bank | Cash CreditSanctioned | 3.60 | _ | 3.60 | |
| 2 | HDFC Bank | Bank GuaranteeSanctioned | _ | 39.00 | 39.00 | |
| 3 | ICICI Bank | Cash CreditSanctioned | 1.82 | _ | 1.82 | |
| 4 | ICICI Bank | Bank GuaranteeSanctioned | _ | 23.00 | 23.00 | |
| 5 | Punjab National Bank | Cash CreditSanctioned | 35.00 | _ | 35.00 | |
| 6 | Punjab National Bank | Bank GuaranteeSanctioned | _ | 25.00 | 25.00 | |
| Total | 40.42 | 87.00 | 127.42 | |||
| TOTAL (Rupees One Hundred Twenty Seven Crores and Forty Two lakhs Only) | ||||||
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