| Kings Infra Ventures Limited | ||||||
| Ratings upgraded to 'CRISIL BB-/Stable/CRISIL A4+' | ||||||
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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 and non convertible debentures of Kings Infra Ventures Limited (KIVL) to ‘CRISIL BB-/Stable/CRISIL A4+’ from ‘CRISIL B+/Stable/CRISIL A4’.
The upgrade reflects sustained improvement in credit profile of the company. Revenue has increased 54 percent in fiscal 2023 to Rs.60.84 crore and reported revenue of Rs.65 crore till Q3 of Fiscal 2024. The healthy growth in revenue is driven by increased volume. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBIDTA) have improved from 13.4 percent in Fiscal 2022 to 17.5 percent in Fiscal 2023 and reported EBIDTA of 16.2 percent till Q3 of fiscal 2024 due to better absorption of fixed cost on account of improved scale of operations. Improvement in operating performance has resulted in increase in NCA to over Rs.7.5 crore per annum and same has resulted in improved cushion between NCA and RO. Also, enhancement in working capital limits has resulted in improved utilisation of bank lines leading to improved liquidity profile.
The rating reflects extensive industry experience of the promoters and moderate financial profile. These strengths are partially offset by small scale of operations exposed to intense competition and working capital intensive operations. |
Key Rating Drivers & Detailed Description Strengths: Extensive industry experience of the promoters: The promoters have experience of over four decades in aquaculture farming. This has given them an understanding of the dynamics of the market and enabled them to establish relationships with suppliers and customers. Since 2017, the company diversified its business activity into sea food processing.
Moderate financial profile: Financial risk profile is moderate marked by healthy capital structure and comfortable debt protection metrics. Capital structure is healthy marked by gearing and Total Outside Liabilities/Tangible Networth (TOL/TNW) of 0.81 time and 0.98 time, respectively, as on 31st march 2023 and estimated to remain around less than 1 time, as on 31st March 2024. Debt protection metrics is comfortable marked by interest coverage ratio (ICR) of 4.4 times and Net cash accruals to adjusted debt (NCAAD) of 0.21 time in fiscal 2023 and estimated at over 4 times and 0.2 time, respectively, for fiscal 2024.
Weakness: Small scale of operations exposed to intense competition: Despite its long track record, KIVL’s scale of operations remained moderate marked by the operating revenue of Rs. 60.8 crore in fiscal 2023 and Rs.65 crore up to Q3 of Fiscal 2024. High fragmentation in the aquaculture and seafood industry continue to constrain the scalability. However, the company's recent foray into retail business coupled with healthy demand for seafood products in the domestic and export markets is expected to scale up its business, going forward.
Working capital intensive operations: The nature of the business requires significant investment in working capital, marked by high levels of inventory holding. This mainly includes stock of shrimps and other seafood in various life stages. Gross current assets were at 248-289 days over the three fiscals ended March 31, 2023 and estimated to remain around 200 to 250 days as on 31st march 2024, reflecting the working capital intensity of operations. |
Liquidity: Stretched Liquidity is marked by moderately high bank limit utilization and adequate cushion between net cash accruals against debt obligation. Average month end utilisation of cash credit limit is around 93 percent for the last 12 months through January 2024. NCA expected in the range of Rs.7.5 to 9 crore per annum over the medium term will be sufficient for repayment obligation of Rs.5 to 7 crore. The current ratio is healthy at 1.74 times on March 31, 2023 and expected to remain at healthy levels over the medium term. |
Outlook: Stable CRISIL Ratings believe KIVL will continue to benefit from the extensive experience of its promoters and its established track record. |
Rating Sensitivity factors Upward factors
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About the Company KIVL was incorporated in 1987, it is located in Tuticorin, Tamil Nadu The company is engaged aquaculture farming, seafood processing, international trade of marine products, aquaculture consultancy, food related infrastructure development and domestic marketing and supply of retail packed marine products.
KIVL is listed on Bombay Stock Exchange Ltd. KIVL is promoted by Shaji Baby John (Chairman and Managing Director) and Baby John Shaji (Director). |
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)
*Yet to be issued |
| 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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