| Univastu India Limited | ||||||
| 'Crisil BB+/Stable/Crisil A4+' assigned to Bank Debt | ||||||
| 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 assigned its ‘Crisil BB+/Stable/Crisil A4+’ ratings to the bank facilities of Univastu India Limited (UIL; part of the Univastu group).
The ratings reflect the extensive experience of the promoter in the construction industry, modest revenue and healthy order book; above average financial and debt profile. These strengths are partially offset by susceptibility to risks inherent in tender-based business and large working capital requirement. |
Analytical approach Crisil Ratings has combined the business and financial risk profiles of UIL and its subsidiaries, Univastu HVAC India Pvt Ltd, Univastu Charitable Trust and Univastu Boots Infra LLP as all the entities operate in the same industry and have operational and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key rating drivers and detailed description Strengths: Extensive experience of the promoters: The promoter Mr. Pradeep Khandagale (chairman and managing director) has considerable expertise in infrastructure project construction and has been overseeing business development, tendering, implementation and monitoring of projects. He has experience of around 2 decades and understanding of the market dynamics enabling him to establish relationships with suppliers and customers. He is supported by team of professionals looking after various verticals and supporting operations.
Improving yet modest revenue supported by healthy order book providing revenue visibility: Group revenue remains modest at Rs.119 crore for 9M-FY 25 but has steadily improved from Rs.59 crore in fiscal-22 to Rs.120 crore in fiscal-24. The group has unexecuted orders worth ~Rs 223 crore as on December 31, 2024, to be executed over a period of 12-18 months. Group also has more than Rs 400 crore of order pipeline (LOA awaited) supporting revenue visibility over medium term. The order book will support the scalability over the medium term. Any untowardness in orders may impact the business risk profile.
Above average financial and debt risk profile: At the group level, capital structure has been above average owing to limited reliance on external debt, yielding estimated gearing and total outside liabilities to adjusted net worth ratio of below 0.4 times and below 0.9 times as on March 31, 2025, improving from 0.60 time and 1.55 times as on March 31, 2024. Debt protection metrics were comfortable as reflected in estimated interest coverage and net cash accrual to total debt ratios estimated of above 4 times and 0.4 time (4.06 times and 0.33 time in fiscal 24), respectively, during fiscal 2025. Financial and debt profiles are expected to continue at similar levels over the medium term supported by moderately healthy net worth of Rs.54 crore as of March 31, 2024 which is further expected to improve with accretion to reserves.
Weaknesses: Susceptibility to risks inherent in tender-based business: Revenue and profitability entirely depend on the ability to win tenders. Owing to intense competition, group has to bid aggressively to get contracts, which restricts the operating margin. Also, given the cyclicality inherent in the construction industry, the ability to maintain profitability through operating efficiency becomes critical.
Large working capital requirement: Gross current assets were sizeable in the range of 313-566 days over the three fiscals through 2024 and lead by high receivables and inventory ranging from 73-173 days and 278-433 days, respectively during same period. GCA days are estimated to be at levels at around 300 days going forward due to higher receivable consisting of retention money owing to higher defect liability period of 2-5 years. Inventory remains high as revenue booking is on milestone basis leading to higher WIP and unbilled revenue. However, management is taking measures to control same. Further, with large orders in hand, working capital requirement is expected to increase over the medium term. Hence, working capital management remains a key monitorable. |
Liquidity: Adequate Bank limit utilisation was high at 98.6% for the 12 months through January 2025. Cash accrual is expected at Rs 15-25 crore per fiscal against term debt obligation of around Rs.1 crore over the medium term provided no debt-funded capital expenditure is planned. Current ratio was healthy at 1.45 times on March 31, 2024 and is expected to continue comfortably above unity. |
Outlook: Stable Crisil Ratings believes the Univastu group will continue to benefit from the extensive experience of the promoter and its established relationships with clients. |
Rating sensitivity factors Upward factors
Downward factors
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About the group UIL was incorporated in 2009 as Unique Vastushilp and Projects Pvt Ltd and was reconstituted as a public limited company in 2017 with its current name. UIL, along with its subsidiaries, undertakes civil construction works, such as construction of metro stations, hospitals, indoor sports complexes, water supply and drainage projects, road projects and minor irrigation projects in Maharashtra, Goa, Haryana and Uttar Pradesh. The company is listed on the National Stock Exchange (NSE SME) and is managed by Mr Pradeep Khandagale. |
Key financial indicators
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Status of non-cooperation with previous CRA UIL has not cooperated with Brickwork Ratings India Private Ltd, which has classified the company as non-cooperative through a release dated Dec 12, 2023 on account of non-furnishing of information for monitoring of ratings. |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| 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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