Yogesh Chaudhary

Brickwork Ratings revises the Long term and Short term ratings for the Bank Loan Facilities of Rs. 40.00 Crs. of Yogesh Chaudhary

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (15 Jul 2021)	Present
Fund Based	10.07	10.00	Long Term	BWR BB-/Stable Downgrade/ISSUER NOT COOPERATING*	BWR D Downgrade
Non Fund Based	30.00	30.00	Short Term	BWR A4 Downgrade/ISSUER NOT COOPERATING*	BWR D Downgrade
Non Fund Based	(5.00)	(5.00)	Short Term	BWR A4 Downgrade/ISSUER NOT COOPERATING*	BWR D Downgrade
Grand Total	40.07	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

BWR has downgraded the long term and short term rating to “BWR D” for the bank loan facilities of Yogesh Chaudhary (YC) ['the firm'].

The rating draws strength from extensive experience of promoters, moderate financial risk profile and moderate order book position. However, the rating is constrained by overdrawal in the overdraft limit and delay in the servicing of the term loan, intense competition in the industry, project execution risk, working capital intensive nature of operations, risk of capital withdrawal and geographical concentration risk.

KEY RATING DRIVERS

Credit Strengths:

Extensive Experience of Promoters :
The partners of the firm, Mr. Yogesh Chaudhary and Mrs. Sunita Devi have a long experience more than 25 years and 15 years respectively in the civil construction industry which has helped them develop healthy relationships with many reputed principal suppliers. Further, the firm is registered as an 'AA-class' contractor and has developed the required technical and project management capabilities to execute mid-sized to large-sized projects.
Moderate Financial Risk Profile :
The firm has moderate financial risk profile with total operating income of Rs. 18.47 crs. in FY20 (Aud.). which declined from Rs. 36.67 crs. in FY19 (Aud.). However, the total operating income increased to Rs. 19.42 cr. in FY21 (Provisional). The firm has achieved revenue of Rs. 5.56 crs. till Aug- 2021. The operating profit margin of the firm has improved on a year-on-year basis in FY20 (Aud.) to 20.43% from 9.92% in FY19 (Aud.). The net profit margin of the firm declined marginally to 1.61% in FY20 (Aud.) from 4.62% in FY19 (Aud.). The firm generated a PAT of Rs. 0.30 cr. in FY20 (Aud.) which declined from Rs. 1.69 cr. in FY19 (Aud.). The tangible networth of the firm declined to Rs. 5.65 crs. in FY20 (Aud.) from Rs. 7.27 crs. in FY19 (Aud.). The tangible networth (analyzed) stood at Rs. 7.40 cr. as on March 31, 2020 (Aud.) which deteriorated from Rs. 9.56 cr. as on March 31, 2019 (Aud.). The Total Debt/TNW ratio stood at 3.51 times in FY20 (Aud.) which deteriorated from 1.85 times in FY19 (Aud.). The Interest Service Coverage Ratio of the firm declined to 1.18 times from 2.24 times in FY 19 (Aud.). The Debt Service Coverage Ratio deteriorated to 0.99 times in FY20 (Aud.) from 1.58 times in FY19 (Aud.).
Modest order book position :
The order book position stood at Rs. 55.63 cr. as on Oct 20, 2021. The revenue which is expected to be booked till March-2022 from orders executed in FY22 is Rs. 14.02 cr. in addition to Rs. 5.56 cr. already booked till Aug-2021 thereby providing revenue visibility in the medium term.

Credit Risks:

Overdrawal in the overdraft limit and delay in the servicing of term loan :
The overdraft limit has remained overdrawn for more than 30 days in May-2021, Aug- 2021 and Sep-2021. There is delay in the servicing of the repayment obligations for term loans for the period Mar-2021 to Sep-2021.
Intense competition in the industry, Project Execution Risk and Working capital intensive nature of operations :
The construction industry is highly fragmented in nature with the presence of large numbers of unorganized players and few large organized players which coupled with tender nature of business poses huge competition and puts pressure on profitability margins. The entity is exposed to risk of delay in project execution, and consequent delay in realization of proceeds. Further, the operations of the firm are working capital intensive on account of various security deposits and retention money required by government departments, coupled with delays in getting funds from the government.
Risk of capital withdrawal and Geographical concentration risk :
Given the partnership nature of the Yogesh Chaudhary’s constitution, there is an inherent risk of the possibility of withdrawal of partner’s current capital for any personal contingency that could adversely impact the capital structure of the firm. The firm is exposed to geographical concentration risk as the firm operates only in Rajasthan

RATING SENSITIVITIES

Going forward, the ability of the firm to improve its revenues and financial risk profile would remain the key rating sensitivities.

Positive: BWR may revise the ratings upward if there is a demonstrated track record of three months for overall debt servicing .

Negative: BWR may reaffirm the rating if there are overdrawals in overdraft limit for more than 30 days .

LIQUIDITY INDICATORS - Poor

The firm has cash and bank balances of Rs. 0.31 cr. as on March 31, 2020 (Aud.). The current ratio of the firm stood at 1.52 times in FY20 (Aud.). The firm has long term borrowing of 9.77 cr. which includes term loans of Rs. 5.56 cr., vehicle loans of Rs. 0.72 and unsecured loans from relatives and friends of directors of Rs.3.49 cr. against which the CPLTD stood at Rs. 0.18 cr. and cash surplus stood at Rs 0.89 as on March 31, 2020 (Aud.). The overdraft cash credit limit sanctioned to the firm remained fully utilized for last six month period ended Oct-2021. Further, the overdraft limit has remained overdrawn for more than 30 days in May-2021, Aug- 2021 and Sep-2021. The firm has Interest service coverage ratio of 1.18 times and debt service coverage ratio of 0.99 times in FY20 (Aud.).

ABOUT THE ENTITY

Bharatpur (Rajasthan) based, Yogesh Choudhary(YC) is a partnership firm established as a sole proprietorship in 1996 and was converted to partnership firm in 2010. The firm is controlled and managed by the partners - Mr Yogesh Choudhary and Mrs Sunita Devi having equal profit sharing. YC is engaged in road construction and is registered as “AA” class approved contractor (highest in the scale of AA to E) indicating eligibility to bid for contracts of any amount. YC undertakes projects for road construction for Public Works Department (PWD) and Rajasthan State Road Development and Construction Corporation (RSRDC) and it has executed projects in the area of Alwar, Bayana, Hindaun etc.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 19-20 (Audited)	FY 18-19 (Audited)
Operating Revenue	Rs.Crs.	18.47	36.67
EBITDA	Rs.Crs.	3.77	3.64
PAT	Rs.Crs.	0.30	1.69
Tangible Net Worth	Rs.Crs.	5.65	7.27
Total Debt/Tangible Net Worth	Times	3.51	1.85
Current Ratio	Times	1.52	1.42

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

CARE C (Stable)/ CARE A4 under "Issuer Not Cooperating" category dated 18 Jun 2021.

IND BB-/ A4+ under "Issuer Not Cooperating" category dated 04 Dec 2017.

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

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	10.00	BWR D (Downgrade)	15Jul2021	BWR BB-Stable (Downgrade/ISSUER NOT COOPERATING*)	13Apr2020	BWR BBStable (Downgrade)	15Feb2019	BWR BB+Stable (Upgrade)	NA	NA
Non Fund Based	ST	30.00	BWR D (Downgrade)	15Jul2021	BWR A4 (Downgrade/ISSUER NOT COOPERATING*)	13Apr2020	BWR A4+ (Reaffirmation)	15Feb2019	BWR A4+ (Upgrade)	NA	NA
NFB SubLimit	ST	(5.00)	BWR D (Downgrade)	15Jul2021	BWR A4 (Downgrade/ISSUER NOT COOPERATING*)	13Apr2020	BWR A4+ (Reaffirmation)	15Feb2019	BWR A4+ (Upgrade)	NA	NA
Grand Total		40.00	(Rupees Forty 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
Adhiraj Singh Ratings Analyst adhiraj.s@brickworkratings.com	V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Yogesh Chaudhary

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	Punjab National Bank	Term Loan - Out-standing	_	_	0.00
2	Punjab National Bank	Over Draft - Sanctioned	10.00	_	10.00
3	Punjab National Bank	Bank Guarantee - Sanctioned	_	30.00	30.00
	Sub-Limit (Finance Guarantee (sub-limit of BG)) - Sanctioned		(5.00)
Total			10.00	30.00	40.00
TOTAL (Rupees Forty Crores Only)

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