| Railtech Infraventure Private Limited | ||||||
| Ratings migrated to 'CRISIL BBB+/Stable/CRISIL A2'; Rated amount enhanced | ||||||
| Rating Action | ||||||
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| & *Issuer did not cooperate; based on best-available information^ *Issuer did not cooperate; based on best-available information | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Due to inadequate information, and in line with Securities and Exchange Board of India guidelines, CRISIL Ratings had migrated its ratings on the bank facilities of Railtech Infraventure Private Limited (RIPL) to ‘CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating'. However, the company’s management has started sharing the information necessary for a comprehensive review of the rating. Consequently, CRISIL Ratings is migrating the ratings to ‘CRISIL BBB+/Stable/CRISIL A2’.
The rating reflects the strong liquidity and improving financial risk profile of RIPL. Liquidity position remains healthy with cash accrual of around Rs 31 crores during fiscals 2022, against yearly repayment obligation of around Rs 7.0 crores. Bank limit utilization has remained low at around 8% for 13 months till June 2022. Company also has healthy financial risk profile with gearing of around 0.07 times in fiscal 2022 against 0.15 timers in fiscal 2021. Debt protection metrics have also remained healthy with interest cover ratio (ICR) of around 24.7 times and net cash accrual against adjusted debt ratio (NCAAD) of around 3.4 times in fiscal 2022. Operating revenue has improved to around Rs. 134 crores in fiscal 2022, as compared to Rs. 122 crores in fiscal 2021 and is estimated to grow by 8%-10% in the medium term supported by healthy order book in hand of around Rs.260 crores as on 31 March 2022. Operating margins have sustained at around 30.9% in fiscal 2022 and is estimated to remain at 30%-32% in the medium term. Timely execution of orders while sustaining operating profitability remains critical for ratings. However, these strengths are partially offset by moderate scale of operations and working capital intensive nature of operations. Operating revenue has improved to around Rs. 134 crores in fiscal 2022, as compared to Rs. 122 crores in fiscal 2021 and is estimated to grow by 8%-10% in the medium term. Operating margins have sustained at around 30.9% in fiscal 2022 as compared to 34.6% in fiscal 2021 and is estimated to remain at 30%-31% in the medium term. |
Analytical Approach: Standalone CRISIL Ratings had earlier consolidated business and financial risk profiles of RIPL and its three JVs: RIPL-Shriram, RIPL-VKJ, and RIPL-Maco (collectively referred as the RIPL group). However, as projects under these JVs have now been completed and no business or financial linkages are observable with RIPL, CRISIL Rating has revised its approach from consolidated to standalone. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
The group is in a business that demands high technological superiority and automation, which involves considerable capital expenditure (capex) on an ongoing basis. Hence, ramp up in revenue along with continuous debt-funded capex will be critical to sustain a healthy return on capital employed margin. |
Liquidity: Adequate The company is expected to generate cash accrual of Rs 33-38 crores during fiscals 2023 and 2024, against yearly repayment obligation of Rs 3-5 crores. Utilisation of the fund-based limit was low and averaged 8% during the 13 months through June 2022 despite large working capital requirements, which provides financial flexibility. Cash and cash equivalents as on 31 March 2022 remained at around Rs. 24.00 crores. Sustenance of adequate liquidity with improvement in scale of operations will be remain key rating sensitivity factor in medium term. |
Outlook: Stable RIPL’s business risk profile should continue to improve owing to its established market position and healthy financial risk profile. |
Rating Sensitivity Factors Upward factors:
Downward factors:
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About the Company RIPL, incorporated in 2008, undertakes laying and flash butt welding of tracks for Indian Railways. Mr Ajay Kumar Bansal and Mr Amit Bansal manage the business. |
Key Financial Indicators
*Provisional |
Status of non cooperation with previous CRA RIPL has not cooperated Acuite Ratings and Research Limited which has classified it as non-cooperative vide release dated 09-Nov-2021. The reason provided by Acuite Ratings and Research Limited is non-furnishing of information for monitoring of ratings. |
Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' 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)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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This Annexure has been updated on 19-Aug-2022 in line with the lender-wise facility details as on 18-Aug-2022 received from the rated entity.
Criteria Details
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