CRISIL has assigned its ‘BB/Stable’ rating to SSV Engineers Pvt Ltd’s (SSV’s) bank facilities. The rating reflects SSV’s exposure to risks relating to the implementation and stabilisation of its greenfield fabrication plant, the expected deterioration in its financial risk profile on account of its proposed aggressive capital expenditure (capex), its small scale of operations, the customer concentration in its revenues, and its susceptibility to volatility in raw material prices. These rating weaknesses are partially offset by the benefits that SSV derives from its promoters’ industry experience and its established relationships with customers.

CRISIL has treated SSV’s unsecured loans of Rs.25.million outstanding as on March 31, 2009, from the promoters as neither debt nor equity, as the loans are non-interest bearing and the promoters have provided an undertaking for non-withdrawal of the loans.

Outlook: Stable
CRISIL believes that SSV will continue to benefit from its established client relationships in the fabrication business, but will remain exposed to customer concentration risks and project risk, over the medium term. The outlook may be revised to ‘Positive’ if the company receives high equity infusion and completes its greenfield project without any time or cost overrun. Conversely, the outlook may be revised to ‘Negative’ in case of slower ramp-up in revenues, large debt-funding of the proposed expansion, or time and cost overruns in the project.

About the Company
SSV commenced operations by acquiring two proprietary concerns, SSV Engineers and Steel Wind Energy, owned by Mr. V M Shinde, with effect from April 2008. SSV is engaged in the fabrication of mild steel structurals (such as platform structures for boilers and heavy foundations of windmills), and components (pressure vessel covers), mainly for windmills and pressure vessels. The main processes carried out by SSV are cutting, bending, welding, and finishing. The company has two fabrication units near Pune (Maharashtra).

SSV reported a profit after tax (PAT) of Rs.20.3 million on net sales of Rs.493.2 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of Rs.26.4 million on net sales of Rs.474.1 million for 2007-08.