| Hild Energy Private Limited | ||||||
| 'CRISIL BBB+/Stable/CRISIL A2' assigned to Bank Debt | ||||||
| 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 assigned its 'CRISIL BBB+/Stable/CRISIL A2' ratings to the bank facilities of Hild Energy Private Limited (HEPL, part of the Hild Group).
The rating reflects the healthy revenue visibility, strong execution capabilities, healthy financial risk profile and strong group support. These strengths are partially offset by its exposure to intense competition, limited track record in the line of business, vulnerability to changes in government regulations/policies and volatility in raw material prices. |
Analytical Approach: For arriving at the ratings, CRISIL Ratings has combined the business and financial risk profiles of HEPL and Hild Projects Private Limited (HPPL) together referred as the Hild group (HG). This is because both the entities operate in the same industry, have common promoters, and have operational and financial linkages.
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: Healthy revenue visibility and strong execution capabilities: With an unexecuted order book of around Rs.1400 crore as of October 2022, which is to be executed over the next 12-15 months, provides healthy revenue visibility over the medium term. HG has been completed their projects in a timely manner and within the stipulated cost. The strong execution capabilities have supported a compound annual revenue growth rate at 51% during the previous three years up to fiscal 2022. CRISIL Ratings believes that HG's execution capabilities will continue to back its ability to grow at a healthy pace over the medium term; expectation of large investments in the solar power segment also augurs well for the company.
Healthy financial risk profile: HG's financial risk profile is healthy marked by strong networth, healthy capital structure and robust debt protection metrics. Net worth of the group is strong at Rs. 142.46 crore as on 31st march 2022 while of the company is debt free. Debt protection metrics is robust marked by interest coverage ratio of Rs.22.40 times and Net cash accruals to adjusted debt ratio of 0.44 times in Fiscal 2022.
Benefits from being part of a strong group: HG belongs to the Eagle group with its flagship entities Eagle Press Private Limited and Madras Security Printers Private Limited which together hold about 98% shares in HEPL. In addition, cash, and bank balance in the group companies to the extent of over Rs.300 crore renders comfort to the liquidity of the company as the same is available to meet any working capital requirement or to fund any cash flow mismatch that may arise.
Weakness: Exposure to intense competition and limited track record in the line of business: The industry is highly competitive, which limits the pricing flexibility and bargaining power of the players. Fragmentation and competition in the solar power EPC segment restrain any pass-through mechanism, leading to a volatile operating margin.
Though the group has reported revenue of Rs.926.71 in Fiscal 2022, the group's limited track record in this line of business is reflected in modest scale of operations at around Rs.100 to 300 crore in the previous three fiscals ending fiscal 2021.Hence, sustenance of revenue and profitability over the medium term will be a key monitorable.
Vulnerability to changes in government regulations/policies and volatility in raw material prices: Hild group's revenue is susceptible to any change in government policies/regulations. Volatility in raw material prices may have significant effect on operating margins |
Liquidity: Adequate Cash accruals are expected to be in the range of Rs.70 to 90 crore per annum over the medium term. Against that, there is no debt obligation. In addition, it will act as cushion to the liquidity of the group. The group has availed overdraft (OD) of around Rs.150 crore against fixed deposit (FD is from group company - Eagle press private Limited). HG had cash and bank balance of around Rs.30.93 crore as on March 31, 2022. Current ratio was moderate at 1.25 times on March 31, 2022. |
Outlook: Stable CRISIL Ratings believe the group will continue to benefit from the extensive experience of its promoter, and established relationships with clients. |
Rating Sensitivity Factors Upward factor
Downward factor
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About the Group Incorporated in 2012, HEPL is engaged in the business of providing turnkey solution for solar projects which include engineering, procurement and purchasing, project management, commissioning, and O& M services thereafter.
Incorporated in 2021, HPPL is 100% subsidiary of HEPL takes over the execution and commission of EPC solar projects
HEPL and HPPL is part of Eagle group which has diversified business interest. |
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 | ||||||||||||||||||||||||
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This Annexure has been updated on 15-Dec-2022 in line with the lender-wise facility details as on 15-Dec-2022 received from the rated entity..
Criteria Details
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