| Aquarius Engineers Private Limited | ||||||
| Rating outlook revised to 'Positive'; Ratings reaffirmed | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has revised its outlook on the long-term bank facilities of Aquarius Engineers Private Limited (AEPL; part of the Aquarius group) to ‘Positive’ from 'Stable' and reaffirmed the ‘CRISIL BB+’ rating, and has reaffirmed its ‘CRISIL A4+’ rating on the short-term bank facility.
The outlook revision factors in the expected improvement in the operating performance of the Aquarius group, driven by moderate revenue growth and sharp increase in operating profitability leading to higher cash accrual. Revenue rose to Rs 215 crore for fiscal 2022 from Rs 130 crore for fiscal 2021 due to strong revival in demand post-pandemic, as reflected in increased dispatches for both concrete batching plants and pumps. Operating margin remained modest at 3.2% for fiscal 2022. Nonetheless, with increase in scale, improvement in the product mix and stabilisation of raw material prices, the operating margin is expected over 4.5% over the medium term.
The group has improved its working capital cycle, which has led to moderate bank limit utilisation and adequate liquidity and cash flow.
The ratings continue to reflect the extensive experience of the promoter of the Aquarius group in the batching plants and concrete pumps business. The ratings also factor in the established market position of the group in the ready-mix concrete (RMC) handling equipment industry and its comfortable capital structure. These strengths are partially offset by large working capital requirement; modest, though improving, operating profitability; and susceptibility to cyclicality in demand from the construction and real estate industries. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of AEPL and Putzmeister India Pvt Ltd (PIPL), as both the companies, together referred to as the Aquarius group, have common promoter, brand and marketing set-up, and significant operational synergies.
Unsecured loan of Rs 4.35 crore provided by the promoter as on March 31, 2022, has been treated as neither debt nor equity.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths :
Weaknesses:
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Liquidity: Adequate Bank limit utilisation was moderate at 75% on average for the 12 months through August 2022. Cash accrual is expected at Rs 6.0-7.0 crore against debt obligation Rs 4-5 crore over the medium term. Current ratio was adequate at 1.28 times and the group had free cash balance of over Rs 3 crore in fixed deposits and liquid investment of over Rs 2.0 crore as on March 31, 2022 |
Outlook: Positive CRISIL Ratings believes the Aquarius group will continue to benefit from its established market position in the domestic RMC handling equipment industry and the operating margin will improve as the group scales up operations and improves its product mix. |
Rating Sensitivity factors Upward factors
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About the Group The Aquarius group manufactures concrete pumps, batching plants and spare parts for RMC handling equipment, and mainly caters to the construction sector. AEPL and PIPL were set up in 1997 and 1998, respectively, and have manufacturing facilities at Pune and Goa, respectively. Products are sold under the Aquarius brand. Mr M S Bhadbhade, managing director and promoter of the group, oversees the operations along with the technical director, Mr A V Dikshit. |
Key Financial Indicators (Consolidated)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | |||
| Facility | Amount (Rs.Crore) | Name of Lender | Rating |
| Cash Credit | 12 | HDFC Bank Limited | CRISIL BB+/Positive |
| Letter of credit & Bank Guarantee | 4 | HDFC Bank Limited | CRISIL A4+ |
| Term Loan | 4.27 | HDFC Bank Limited | CRISIL BB+/Positive |
| Term Loan | 3.1 | HDFC Bank Limited | CRISIL BB+/Positive |
This Annexure has been updated on 27-Feb-23 in line with the lender-wise facility details as on 14-Feb-23 received from the rated entity.
Criteria Details
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