RATING RATIONALE
27Dec2021

Capital Electech Pvt Ltd

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 125 Crs. of Capital Electech Pvt Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(04 Dec 2020)
Present
Fund Based 1.50 1.50 Long Term BWR BBB- (Stable)
Reaffirmed
BWR BBB - /Stable
Reaffirmation
Non Fund Based 123.50 123.50 Long Term BWR BBB- (Stable)
Reaffirmed
BWR BBB - /Stable
Reaffirmation
Grand Total 125.00 125.00 (Rupees One Hundred 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

Reaffirmation in the ratings of Capital Electech Pvt Ltd. (CEPL or the company) factors in its good revenue visibility, comfortable gearing and debt coverage metrics besides adequate liquidity to meet working capital needs and debt repayment obligations in the medium term. While revenue of the company declined during FY20 and FY21, primarily owing to covid led disruptions resulting in delays in work completion/ site inspections/ billing, the same is expected to grow along the projected lines during FY22 and FY23 on the strength of a healthy work order book position upto March 2024. Long term debt obligations of the company are significantly low and the company has been generating adequate cash accruals to meet the borrowing expenses and debt obligations. The company does not propose any fresh debt and overall working capital utilization is expected to remain fairly low during FY22 and FY23 on the strength of sufficient liquidity available with the company to meet its working capital needs. Accordingly, BWR expects the company’s overall financial risk profile to remain medium risk during FY22 and FY23.

Outlook: Stable

BWR believes the Capital Electech Pvt Ltd.’s business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term.

 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied its rating methodology on a standalone basis as detailed in the Rating Criteria detailed below.

RATING SENSITIVITIES

Upward: Substantial improvement in scale of operations, operating margins and receivables holding period would support upward rating action.

Downward: Decline in revenues, operating margins, and cash conversion cycle particularly receivables holding period in the company would attract downward rating action.

 

LIQUIDITY INDICATORS - Adequate

Liquidity in the company is adequate as indicated by NWC, average utilisation of working capital and cash accruals versus debt obligations. NWC of the company is Rs.79.53 crs as on 31 March 2021 (prov.) and average utilisation of fund based working capital facilities is less than 5% during six months period ending Nov 2021 and average utilisation of non fund based working capital facilities is approx. 37% for 12 months ending Nov 2021. During FY21, the company has generated cash accruals of Rs.7.33 crs against debt obligations of Rs.3.33 crs. Going forward, the company is expected to generate adequate cash accruals during FY22 and FY23 to support borrowing expenses and debt obligations and NWC of the company is expected to improve further.

 

ABOUT THE ENTITY

Capital Electech Private Limited., established in August 2005 with its registered office at D-1/1, Rajapuri Uttam Nagar, New Delhi, is in the business of upgrading existing power substations and transmission lines, and setting up new power stations, generator sets and transmission lines on turnkey basis for the central and state government entities, and public and private sector organizations. Vikas Sharma and Sachin Sharma are the promoters and directors in the company.

 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Provisional)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 100.80 153.44
EBITDA Rs.Crs. 12.33 36.21
PAT Rs.Crs. 7.00 25.49
Tangible Net Worth Rs.Crs. 82.45 75.46
Total Debt/Tangible Net Worth Times 0.18 0.21
Current Ratio Times 2.47 1.65
KEY COVENANTS OF THE FACILITY RATED

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

 


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NIL

ANY OTHER INFORMATION

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 LT 1.50
BWR BBB-/Stable
(Reaffirmation)
04Dec2020
BWR BBB- (Stable)
(Reaffirmed)
06Nov2019
BWR BBB- (Stable)
(Reaffirmed)
26Jun2018
BWR BBB- (Stable)
(Upgrade)
Non Fund Based LT 123.50
BWR BBB-/Stable
(Reaffirmation)
04Dec2020
BWR BBB- (Stable)
(Reaffirmed)
06Nov2019
BWR BBB- (Stable)
(Reaffirmed)
NA
NA
Non Fund Based ST NA
NA
NA
NA
NA
NA
26Jun2018
BWR A3
(Upgrade)
Grand Total 125.00 (Rupees One Hundred Twenty Five Crores Only)
Rating Advisory, as on 03Dec2021
Press Release, as on 03Dec2021
Advisory issued for delay in rating review.

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

Saurabh Agarwal

Assistant Manager - Ratings Board : +91 11 2341 2232 saurabh.a@brickworkratings.com

Ashwini Mital

Director - Ratings Board : +91 172 5032 295 / 6 ashwinimital@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Capital Electech 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 HDFC Bank Bank GuaranteeSanctioned 16.50 _ 16.50
2 HDFC Bank OverdraftSanctioned 0.50 _ 0.50
3 Punjab National Bank Cash CreditSanctioned 1.00 _ 1.00
4 Punjab National Bank Bank GuaranteeSanctioned 55.00 _ 55.00
5 Un tied portion Bank GuaranteeProposed 52.00 _ 52.00
Total 125.00 0.00 125.00
TOTAL (Rupees One Hundred Twenty Five Crores Only)
ANNEXURE-II
INSTRUMENT DETAILS

InstrumentIssue DateAmount (Rs.Crs)Coupon Rate (%)Maturity DateISIN Particulars
N.A 0

ANNEXURE-III
List of entities consolidated

Name of Entity% OwnershipExtent of consolidationRationale for consolidation
NIL

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