CRISIL has assigned its bank loan ratings of ‘BBB+/Stable/P2’ to the various bank facilities of Petron Civil Engineering Pvt Ltd (PCEPL). The ratings are constrained by PCEPL’s limited scale of operations, its presence in the highly competitive civil construction business, and its constrained operating cash flows and liquidity. The ratings also factor in the company’s strong revenue visibility and improving operating efficiencies.

Outlook: Stable
CRISIL believes that PCEPL will continue to have a healthy business profile over the medium term backed by a buoyant order book position and operational efficiencies. The outlook may be revised to ‘Positive’ if PCEPL’s new management sustains its growth in performance. Conversely, the outlook may be revised to ‘Negative’ if the company faces large-scale order cancellations and higher-than-expected pressure on operating margins.

About the Company
PCEPL was promoted in 1980 by a group of professionals comprising Mr. M K Nair, Mr. R S Ambekar, Mr. N Sanyal, and Mr. K V Murthy. It is headquartered in Mumbai, with two regional offices at Pune and Kolkata, and an equipment repair base at Panvel, near Mumbai. The company operates as a civil contractor in industrial civil construction. In 2007, PCEPL was taken over by KazStroyService Ltd (KSS), a private company registered in London, which now holds about 97 per cent stake in PCEPL.

For 2007-08 (refers to financial year, April 1 to March 31), PCEPL reported a net profit of Rs.165 million on net sales of Rs.2380 million, as against a net profit of Rs.30 million on net sales of Rs.1710 million in 2006-07.