| Brace Port Logistics Limited | ||||||
| Ratings upgraded to 'Crisil BBB+/Stable/Crisil A2' | ||||||
| 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 upgraded its ratings on the bank facilities of Brace Port Logistics Limited (BPLL; Formerly known as Brace port Logistics Private Limited; part of the Skyways group) to ‘Crisil BBB+/Stable/Crisil A2’ from ‘Crisil BBB/Stable/Crisil A3+’.
The upgrade reflects improvement in the credit risk profile of the parent, Skyways Air Services Pvt Ltd (SASPL; flagship company of the Skyways group; rated ‘Crisil A/Stable’).
The upgrade also factors in BPLL’s sustained improvement in revenue estimated at Rs 75-80 crore in fiscal 2025 (Rs 55 crore in fiscal 2024) driven by both improved realisation and volumetric growth as evident with revenue of Rs. 49.55 crores in H1fiscal 2025 (April-Sept.). Furthermore, revenue is further expected to improve by 15-20% supported by addition of new customers and addition of retail customer leading to improvement in operating efficiency. Moreover, operating efficiency was also better driven by stable operating margin to 9.8% till September 2024. The operating margin is expected to remain range-bound at 9.8-10%, with prudent working capital management and comfortable return on capital employed.
The upgrade also factors in the robust financial risk profile of BPLL, with efficient working capital management. Absence of sizeable debt-funded capital expenditure (capex) and expected accretion to reserves shall continue to aid the financial risk profile over the medium term. Liquidity was comfortable, backed by healthy net cash accrual vis-à-vis maturing debt and cushion in bank lines.
The ratings reflect BPLL's operational synergies and support from its parent, SASPL, as well as above-average financial risk profile. These strengths are partially offset by modest scale of operations, susceptibility to economic cycles and exposure to intense competition. |
Analytical Approach The ratings factor in strong support from the parent, Skyways Air Services Pvt Ltd (SASPL). This is because BPLPL is a subsidiary of SASPL and essentially the Skyways group’s diversification into different segments of logistics business (air and ocean logistics for BPLPL), leading to significant operational and financial linkages and Modest scale of operations. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Adequate Bank limit utilisation was low at 8.2%% on average for the 12 months ended October 31, 2024. Cash accrual is expected to be Rs 6-7 crore which will be sufficient against term debt obligation of Rs 0.1-0.2 crore over the medium term, and the surplus will cushion liquidity. The current ratio was healthy at 1.85 times as on March 31, 2024. |
Outlook: Stable Crisil Ratings believes BPLL, being part of the Skyways group, will continue to benefit from the extensive experience of its promoters and their established relationships with clients. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company Incorporated in November 2020, the company is engaged in the business of air and ocean freight forwarding. SASPL has 51.09% shareholding in the company.
Incorporated in 1984, SASPL is engaged in providing international and domestic freight forwarding and logistics services. It offers services which include sea freight, air freight services, domestic surface distribution door delivery, customs clearance services, import and export services, inland transportation services, warehousing and distribution, and consolidation services, among other services. The company’s head office is in Delhi and it has branches and representative offices across India. The SASPL has presence in international locations also through its subsidiaries in Germany, Vietnam, Bangladesh, Hong Kong, UAE, Cambodia, Thailand, UK and USA. It is promoted and owned by Mr S.L Sharma, Mr Yashpal Sharma and Mr Tarun Sharma. The Skyways group provides logistics services in all modes of transport: air, ocean and road as well as couriers for both domestic and international markets. However, the largest proportion of the group’s revenues are contributed by air logistics. |
Key Financial Indicators
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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 - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||
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Criteria Details
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