| Tara Chand Infralogistic Solutions Limited | ||||||
| Rating outlook revised to 'Positive'; Ratings Reaffirmed | ||||||
| Rating Action | ||||||
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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 revised its outlook on the long-term bank facilities of Tara Chand Infralogistic Solutions Limited (TCISL) to ‘Positive' from 'Stable' while reaffirming the rating at 'Crisil BBB-'. The short-term rating has been reaffirmed at ‘Crisil A3’.
The revision in outlook reflects the expected improvement in the company’s credit profile, driven by sustained strengthening of its business as well as liquidity profile. The business risk profile continues to improve on the back of steady growth in scale of operations with revenues of Rs 248 crores in fiscal 2025 and Rs 127 crores generated in first half of fiscal 2026, supported by continued asset addition and healthy monthly yield generation owing to quick deployment of assets and its healthy utilization levels. As a result, operating margins have also improved to above 35% in first half of fiscal 2026 and is expected to sustain above 33% over the medium term which remains monitorable. Furthermore, diversification across end-user industries in equipment rental segment has led to better working capital cycle which likely should remain at similar levels. The rating action also incorporates its comfortable capital structure despite capex, and improved liquidity position with healthy cash accruals, providing comfortable cushion against repayment obligations.
The ratings reflect the extensive experience of the promoters in the transportation and logistics industry, established relationships with key customers, and moderate financial risk profile. These strengths are partially offset by large working capital requirement, intense competition and sizeable capital requirements. |
Analytical Approach While arriving at the ratings Crisil Ratings evaluated the standalone business and financial risk profile of Tara Chand Infra Logistics Solutions Limited. |
Key Rating Drivers - Strengths Established market position backed by the extensive experience of its promoters and established clientele: TCILSL is an established player in the transportation and logistics industry and equipment rental business with relatively new fleet with average fleet age of around 7 years. The promoters’ overall experience of more than three decades, their understanding of market dynamics, and healthy relationships with suppliers and customers should continue to support the business. TCILSL’s key customers include reputed players such as Rashtriya Ispat Nigam Ltd (RINL), Steel Authority of India Ltd (SAIL), Larsen and Toubro Ltd ('Crisil AAA/Stable/Crisil A1+'), Reliance Industries Limited ('Crisil AAA/Stable/Crisil A1+'), JK Cement Limited ('Crisil A1+'), and other large construction companies. This has resulted in steady revenue growth from Rs 173 crores in fiscal 2023, to Rs 248 crores in fiscal 2025. With the company having already achieved around Rs 127 crores in H1 of fiscal 2026, the revenue is expected to sustain on the back of the executable order book in hand which provides revenue visibility and quicker deployment of newly added assets.
Moderate financial risk profile: Financial risk profile of the company is marked with comfortable net worth at Rs 121 crore as on March 31, 2025, which is expected to improve over the medium term backed by steady accretion to reserves and equity infusions. Gearing and total outside liabilities to adjusted net worth (TOLANW) ratio stood at around 0.9 times and 2 times respectively, as on March 31, 2025. Healthy operating margin has kept debt protection metrics comfortable with interest coverage and net cash accrual to adjusted debt ratio at 11 times and 0.6 times, respectively, in fiscal 2025. Despite high capex, which is expected to continue, capital structure should remain comfortable with the healthy accretion to the reserves. |
Key Rating Drivers - Weaknesses Moderate working capital requirement: The operations of the company are working capital intensive with gross current assets (GCAs) of 131 days as on March 31, 2025 (122 days as on March 31, 2024), primarily driven by debtors of 88 days and low inventory. There has been improvement in the overall working capital cycle of the company largely driven by the change in the end-user industry mix mainly in the equipment rental segment. Sustenance of improved working capital cycle, especially debtor collections, remains key rating sensitivity factor.
Intense competition and sizeable capital requirements: The company’s equipment rental business requires continuous sizeable capex to be incurred, leading to high capital requirements. The equipment rental business is sensitive to utilization rates, and its performance is closely linked with investments in end-user industries, such as wind energy, power, oil and gas, infrastructure and Industrials. While the company has diversified revenues from the end user industry, any slowdown in the industries catered to may affect the company's deployment levels, revenue and operating margins. |
Liquidity Adequate Net Cash accruals are expected to remain healthy in the range of Rs. 70-90 crores in fiscal 2026 and fiscal 2027 against term debt repayment obligation of Rs.30-40 crores annually, respectively. Bank limit was utilized around 43% for the past twelve months ended Oct 2025. Unencumbered cash and cash equivalents were around Rs 19 crores as on March 31 2025. Further the company has FD balances of Rs 20 crores as on same date, majority of which is lien marked. Current ratio stood at around 1.59 times as on March 31, 2025. Crisil Ratings expects internal accruals, cash & cash equivalents and unutilized bank lines to be sufficient to meet its repayment obligations as well as incremental working capital requirements. |
Outlook Positive Crisil Ratings believes TCISL will continue to benefit from its improved scale of operations along with strong clientele and comfortable financial risk profile |
Rating sensitivity factors Upward factors
Downward factors
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About the Company TCISL serves India's infrastructural and industrial needs through Warehousing, Transportation, Equipment Rental, and Turnkey Infra-Project Execution. With 35+ years' experience, TCILSL is a top Steel Warehousing & Transport entity, handling 10M+ tons of Steel annually.
The company has a fleet of 392 Machines including Heavy Cranes (up to 900MT), Hydraulic Piling Rigs, Steel Processing, & Concrete Equipment. It has contributed significantly to High-Speed Bullet Train and Metro Line projects across cities like Ahmedabad, Delhi, Mumbai, and more.
The compnay is promoted Mr Vinay Kumar and Mr Ajay Kumar. |
Key Financial Indicators
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Status of non-cooperation with previous CRA: TCILSL has not cooperated with Brickwork Ratings India Private Limited which has classified it as issuer not cooperative vide release dated October 01, 2019. The reason provided by Brickwork Ratings India Private Limited is absence of adequate information from the company. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||
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Criteria Details
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