Key Rating Drivers & Detailed Description

Strengths:

• Experienced management and established market position

Mr Venkateshwarlu Jasti is the Managing Director of the company. He holds a dual postgraduate degree in pharmacy with specialisation in industrial pharmacy. He has experience of over three decades in the contract research industry, which has helped the company to associate with 70 global companies. The Suven group has established market position in the contract research and manufacturing services (CRAMS) segment and is among the top five players in India who supply high-end intermediaries to innovators.

• Healthy financial risk profile

The financial risk profile is characterised by strong networth, healthy capital structure and robust debt protection metrics. Networth remains strong at Rs 1,524.94 crore as on March 31, 2022. Due to strong networth and low reliance on external debt, the capital structure remains healthy with gearing and total outside liabilities to tangible networth ratio of 0.06 time and 0.20 time, respectively, as on March 31, 2022. The debt protection metrics remain robust, with interest coverage ratio of 70.34 times and net cash accrual to total debt ratio of 4.10 times in fiscal 2022. The interest coverage ratio was 144 times in the first half of fiscal 2023.

Weakness:

• Working capital-intensive operations:

Operations remain moderately working capital intensive with gross current assets (GCAs) of 178 days as on March 31, 2022.

• Exposure to customer concentration risk:

The top ten customers contribute to a substantial share of the revenue, exposing the company to customer concentration risk.

Key Financial Indicators

Annexure - Details of Instrument(s)

Annexure – List of entities consolidated

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