| International Certification Services Private Limited | ||||||
| Ratings reaffirmed at 'CRISIL B / Stable / CRISIL A4 ' | ||||||
| Rating Action | ||||||
| ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its ratings on the bank facilities of International Certification Services Private Limited (ICS) at ‘CRISIL B/Stable/CRISIL A4’
The ratings continue to reflect average financial risk profile and large working capital requirement. These weaknesses are partially offset by extensive industry experience of the promoters.
The lockdown and other measures taken by various central and state governments towards containment of COVID-19 are expected to have moderate impact on the business risk profile of ICS. Company has generated revenues of Rs 15.35 crore till December 2020. Overall revenue for FY 21 is expected to be marginally than of FY 20. However profitability for FY 21 would remain a key monitorable. |
Analytical Approach Unsecured loans of Rs. 0.09 cr as on March 31, 2020 has been treated as debt as these loans are need based in nature. |
Key Rating Drivers & Detailed Description Weaknesses: * Average financial risk profile: Financial risk profile continues to remain average with modest net worth and moderately high total outside liabilities to adjusted net worth ratio of Rs 6.5 crore and 2.6 times respectively as on March 31, 2020. Debt protection metrics are average, owing to modest revenues and subdued profitability. Interest cover and net cash accruals to adjusted debt ratio are estimated at 2.19 times and 0.11 time as on March 31, 2020. Financial risk profile is expected to remain average in the medium term.
* Large working capital requirement: Operations remain working capital intensive with estimated gross current assets of 199 days as on March 31, 2020 on account of debtor cycle of 109 days and sizable security deposits.
Strength: * Extensive industry experience of the promoters: Promoter's extensive experience of over 2 decades in the industry has helped develop its execution capabilities for certification and inspection services to companies across the industries. Further repeat orders from customers has resulted in ICS’s revenue to grow from Rs 14.3 crore in FY 17 to Rs 27.8 crore in FY 20. |
Liquidity-Poor Liquidity is poor with Net Cash Accruals (NCA) expected at Rs 0.7 to 0.9 crore in the medium term, against repayment obligations of Rs 0.7 to 0.8 crore per annum. Company had cash and bank balance of Rs 1.2 crore as on March 31, 2020. Bank limit utilization was 66% for 12 months through Aug 2020. No capex is planned. Liquidity is supported by emergency covid loans of Rs 0.5 crore. |
Outlook Stable CRISIL Ratings believes ICS will continue to benefit from promoters' industry experience and its established customer relationships. |
Rating Sensitivity factors Upward factors
Downward factors • Sharp decline revenues or lower operating margin, leading to much lower than expected cash accruals • Deterioration of financial risk profile; especially interest cover falling below 1 time |
About the Company ICS, incorporated in 1999 by the Kataria family, provides certifications and inspection services to companies across industries. Its operations are managed by Mr Sundar Kataria (managing director), Ms Sheela Kataria (director - finance), Mr Sumeet Kataria (technical director/country manager), Mr Ramakant Prasad (vice-president) and Mr Sudhir Vagal (vice-president). The company's head office is in Mumbai. It has branch offices across the country. |
Key Financial Indicators
*Provisional |
Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
|
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
* - Issuer did not cooperate; based on best-available information
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||
|