RATING RATIONALE
25Oct2021

Sysnet Global Technologies Pvt. Ltd.

Brickwork Ratings reaffirms the short term ratings for the Bank Loan Facilities of Rs. 25.00 Crs. of Sysnet Global Technologies Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(27 Jul 2020)
Present
Fund Based 25.00 25.00 Short Term BWR A3
Upgrade
BWR A3
Reaffirmation
Grand Total 25.00 25.00 (Rupees Twenty Five 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

BWR has reaffirmed the rating of Sysnet Global Technologies Private Limited at BWR A3. The reaffirmation of rating reflects the stability in the company’s operating income (OI) at around Rs.150 Crores for the past three years. Net profit margins have been improving year on year. The current ratio have been constant at 1.05 times in FY20 and FY19. The debt protection metrics are moderate in FY20. Overall, the credit risk profile of the company seems moderately low. The rating has also factored the extensive experience of the promoters in the ITES industry, long track record of the company and the client’s established relationship with reputed clients over the past many years. The rating is however constrained by the stagnant revenue levels in the past couple of years, thin profitability margins and possible affect on the business due to the Covid-19 pandemic. 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

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

Going forward, the ability of the company to improve its capital structure & profitability and manage liquidity would be key rating sensitivities.

Upward: The outlook may be revised upward if the company is able to achieve the projected revenues, profitability & capital structure and improve its profitability margins & debt protection metrics.

Downward: The outlook may be revised downwards if the company fails to achieve projected revenues & profits and there are delays in servicing the debt obligations.

LIQUIDITY INDICATORS - Adequate

The company has generated net cash accruals of Rs.2.54 Crores in FY20 as compared to Rs.2.22 Crore in FY19. Cash accruals in FY21(Prov.) Rs. 2.49 Cr. which is further rising to Rs. 4.33 Cr. in FY22(Proj.). Other liquidity indicators are marked adequate on account of bank balance of Rs. 9.29 Cr. in FY20 which is further rising to Rs. 9.59 Cr. and Rs. 10.55 Cr. in FY21(Prov.) and FY22(Proj,) respectively. In absence of any major debt repayments in the near term, the company seems to have adequate levels of liquidity to meet its working capital needs. The factoring facility utilization level was between 60-65% in the last 1 year. The current ratio of the company is at 1.05 times which is further improving to 1.26 times and 1.32 times in FY21(Prov.) and FY22(Proj.) respectively.  BWR believes that the company’s liquidity profile will remain adequate in the short to medium term.

ABOUT THE ENTITY

Sysnet Global Technologies Pvt Ltd (SGTPL) was established in 1999 by a group of qualified & experienced professionals, to provide IT hardware solutions to companies in India. Mr. Sunil Gautam is the major shareholder of the company and is the key promoter. He is supported by other director Mr. Arush Sogani. SGTPL provides system integration and service products like warranty support, AMC, facility management services, up gradation for HP (HP and Compaq), IBM, Acer, Cisco, Epson, 3Com, D-link, Intel, Canon, Samsung, etc. directly or through their strategic partners.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 150.55 150.38
EBITDA Rs.Crs. 5.78 5.84
PAT Rs.Crs. 1.60 1.35
Tangible Net Worth Rs.Crs. 22.29 20.81
Total Debt/Tangible Net Worth Times 0.95 1.04
Current Ratio Times 1.05 1.05
KEY COVENANTS OF THE FACILITY RATED

Nil


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based ST 25.00
BWR A3
(Reaffirmation)
27Jul2020
BWR A3
(Upgrade)
28Apr2019
BWR A3
(Reaffirmation)
NA
NA
NA
NA
NA
NA
24Dec2019
BWR A4+
(Downgrade)
NA
NA
Grand Total 25.00 (Rupees Twenty Five Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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

Arjun Gupta

Ratings Analyst arjun.g@brickworkratings.com

Hari Kishan Yadav

Associate Director - Ratings hari.ky@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Sysnet Global Technologies Pvt. Ltd.
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.)
1 IFCI Limited Domestic Factoring _ 10.00 10.00
2 SBI Global Factors Limited Domestic Factoring _ 15.00 15.00
Total 0.00 25.00 25.00
TOTAL (Rupees Twenty Five Crores Only)
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About Brickwork Ratings

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 11,400 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. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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