February 18, 2014
Mumbai
Backbone Enterprises Limited
 
Rated amount enhanced
 
Total Bank Loan Facilities Rated Rs.5475 Million (Enhanced from Rs.4720 Million)
Long Term Rating CRISIL BBB+/Stable (Reaffirmed)
Short Term Rating CRISIL A2 (Reaffirmed)
(Refer to Annexure 1 for Facility-wise details)

CRISIL's ratings on the bank facilities of Backbone Enterprises Ltd (BEL) continue to reflect BEL's promoters' extensive experience in the engineering, procurement and construction (EPC) industry, its established market position, and sizeable order book. The ratings also reflect BEL's adequate financial risk profile, marked by a healthy net worth and comfortable debt protection metrics. These rating strengths are partially offset by BEL's susceptibility to intense competition in the civil construction industry, its working capital intensive operations and geographical concentration in its revenue profile with high dependence on three large projects.

Outlook: Stable

CRISIL believes that BEL will benefit over the medium term from its sizeable order book. It is expected to maintain its adequate financial risk profile. The outlook may be revised to 'Positive' if the company significantly increases its scale of operations without adversely affecting its profitability and working capital management. Conversely, the outlook may be revised to 'Negative' if there are further delays in the implementation of its large projects, or any strain on its financial risk profile due to stretched working capital cycle or any large investments in non-core business.

About the Company

BEL was established in 1991 as a partnership firm named Backbone Enterprise by Mr. Kishore Viramagama, Mr. Bhupendrakumar Panchani, and Mr. Bhovan Rangani in Rajkot (Gujarat). It was reconstituted as a public limited company in July 2002. BEL is primarily engaged in infrastructure development and construction of roads and highways. The company is also into construction of earthwork and dams, and water distribution projects.

For 2012-13 (refers to financial year, April 1 to March 31), BEL reported profit after tax (PAT) of Rs.230 million on net sales of Rs.4.7 billion against a PAT of Rs.200 million on net sales of Rs.3.1 billion for 2011-12.

Annexure 1 - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Million) Rating Facility Amount (Rs.Million) Rating
Bank Guarantee* 2775 CRISIL A2 Bank Guarantee* 2250 CRISIL A2
Bill Discounting 200 CRISIL A2 Bill Discounting 100 CRISIL A2
Cash Credit 750 CRISIL BBB+/Stable Cash Credit 600 CRISIL BBB+/Stable
Letter of Credit^ 250 CRISIL A2 Letter of Credit 250 CRISIL A2
Term Loan 500 CRISIL BBB+/Stable Letter of credit & Bank Guarantee 1000 CRISIL A2
Bank Guarantee** 1000 CRISIL A2 Term Loan 520 CRISIL BBB+/Stable
Total 5475 -- Total 4720 --
* Includes LC Limit of Rs.200 Million;
** Includes LC Limit of Rs.300 Million
^ Letter of Credit of Rs. 250 Million is interchangeable with Bank Guarantee
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Email: sudip.sural@crisil.com

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Email: manoj.damle@crisil.com 		Timings: 10.00 am to 7.00 pm
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Last updated: May, 2013

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February 18, 2014

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