| SN Enviro - Tech Private Limited | ||||||
| 'CRISIL BB+/Stable/CRISIL A4+ ' assigned to Bank Debt | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has assigned its 'CRISIL BB+/Stable/CRISIL A4+’ ratings to the bank facilities of SN Enviro - Tech Private Limited (SNETPL).
The ratings reflect the extensive experience of the promoters of SNETPL and the established position of the company in the water and sewage treatment projects segment, its healthy order pipeline and the above-average financial risk profile. These strengths are partially offset by susceptibility to risks arising from the tender-based nature of business and working capital-intensive operations. |
Analytical Approach Unsecured loans have been treated as debt as these are extended by the promoters and related parties for need-based support. |
Key Rating Drivers & Detailed Description Strengths:
The decade-long experience of the promoters in the civil construction business, their understanding of local market dynamics and healthy relationships with suppliers and customers has helped the company withstand industry cycles. Also, the operations are geographically diversified across Assam, West Bengal, Uttar Pradesh, Rajasthan and Uttarakhand with largely stable scale. The extensive experience of the promoters and the established position of the company will support the business.
Gearing was healthy at 0.52 time and total outside liabilities to tangible networth ratio moderate at 1.34 times, as on March 31, 2021. Interest coverage and net cash accrual to total debt ratios were moderate at 2.41 times and 0.16 time, respectively, for fiscal 2021. Financial risk profile is expected to remain stable over the medium term.
SNETPL executes orders from municipal bodies, water supply and sewage boards and other government agencies. The company also undertakes operations and maintenance work for its projects. Orders worth Rs 459 crore as of August 2021 provide adequate medium-term revenue visibility. However, the timely execution of these orders and its impact on revenue remains critical.
Weaknesses:
Scale of operations is moderate revenue of Rs 70.20 crore in fiscal 2021 as it is largely dependent upon the successful bidding for tenders and availability of site for project execution. Scale is expected to remain moderate over the medium term.
Gross current assets (GCAs) were sizeable at 314 days as on March 31, 2021, driven by large-fixed deposits kept as margin money to avail of bank guarantee facility. Debtors stood at 308 days, versus 368 days, a year earlier. Credit of 358 days from suppliers, and mobilisation advances from customers ease the pressure on working capital management.
Revenue and profitability entirely depend on the ability of the company to win tenders, with intense competition, necessitating aggressive bidding and thus, constraining the operating margin. Further, availability of site for project execution too remains crucial. Also, given the cyclicality inherent in the construction industry, ability to maintain profitability through operating efficiency becomes critical. |
Liquidity: Adequate Net cash accrual, expected at Rs 4-5.5.0 crore per annum over the medium term, will sufficiently cover yearly debt obligation of Rs 0.4-0.7 crore and the surplus will support liquidity. Utilisation of bank limit of Rs 4.5 crore remained high at around 96%, on average, over the 9 months through September 2021. Current ratio was healthy at 1.48 times as on March 31, 2021. |
Outlook: Stable The company will continue to benefit from the extensive experience of its promoters. |
Rating Sensitivity factors Upward factors
Downward factors
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About the Company Incorporated in 2005, SNETPL is promoted by the late Mr Samarendra Nath Nandy, and is currently managed by his son, Mr Abhishek Nandy, Ms Sonali Nandy and a team of professionals. The Delhi-based company undertakes engineering, procurement and construction of water and sewage treatment plants, and industrial effluents treatment plants. |
Key Financial Indicators
*Provisional |
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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* - 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 02-Dec-2021 in line with the lender-wise facility details as on 02-Dec-2021 received from the rated entity.
Criteria Details
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