| Advait Infratech Limited | ||||||
| Rated amount enhanced | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its ‘CRISIL BBB-/Stable/CRISIL A3’ ratings on the bank facilities of Advait Infratech Limited (AIL).
CRISIL Ratings had assigned its ‘CRISIL BBB-/Stable/CRISIL A3’ ratings to the bank facilities of AIL through rating rationale dated July 30, 2022.
The ratings reflect the extensive experience of the promoter in the electrical equipment and engineering, procurement and construction (EPC) business. Financial risk profile is likely to remain strong, with comfortable debt protection metrics. These strengths are partially offset by the moderate scale of operations and working capital intensive operations |
Analytical Approach: Standalone AIL has invested into TG Advait India Pvt Ltd for its 33.5% stake and overall operations of this company are managed by its joint venture (JV) partner. |
Key Rating Drivers & Detailed Description Strengths: Extensive industry experience of the promoter The two-decade-long experience of the promoter in the EPC business, their strong understanding of market dynamics and established relationships with suppliers and customers, will continue to support the business risk profile. CRISIL Ratings believes that these factors will help AIL scale up its revenue profile and build a strong order book.
Healthy financial profile Capital structure remains healthy, aided by lower reliance on external debt. Hence, gearing and total outside liabilities to adjusted networth ratios were low at of 0.15 and 0.71 time, respectively, as on March 31, 2022. Debt protection measures are also comfortable due to leverage and healthy profitability. Interest coverage and net cash accrual to total debt ratios stood at 12.49 times and 1.09 times respectively, for fiscal 2022.
Weakness: Moderate scale of operations AIL offers products and solutions for power transmission, substations and telecommunication infrastructure, and also undertakes EPC work for installation of optical ground wire (OPGW). Diversification in the order book has enhanced the revenue profile, yet it is likely to be moderate. The healthy order pipeline offers revenue visibility over the medium term.
Working capital intensive operations. Gross current assets (GCAs) stood at 181 days for the fiscal ended March 31, 2022. The company needs to extend a long credit period in line with industry standards, however receivables include 10% of the EPC contract amount, which is held as retention money for two years. GCAs may remain high over the medium term. |
Liquidity: Adequate Liquidity is marked by sufficient cash accrual and low bank limit utilisation. Expected cash accrual of Rs 9-12 crore should suffice to cover the term debt of Rs 0.8-2.0 crore over the medium term. Bank limit utilisation was also negligible, averaging around 13.92% for the 12 months ended June 30 ,2022. Current ratio was healthy at 1.86 times as on March 31, 2022.
Low gearing and moderate networth will continue to provide financial cushion to raise additional debt in case of any adverse conditions or downturn in the business. |
Outlook: Stable CRISIL Ratings believes AIL will continue to benefit from the extensive experience of its promoter in the EPC business, and their established relationships with clients. |
Rating Sensitivity Factors Upward factors
Downward factors
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About the Company AIL was incorporated in 2010, by the promoter, Mr Shalin Sheth. The company offers products and solutions for power transmission, power substations and telecommunication infrastructure fields, and also undertakes EPC work for installation of OPGW. It is listed on the Bombay Stock Exchange platform for Small and Medium Enterprises. |
Key Financial Indicators
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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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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||
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This Annexure has been updated on 10-Aug-2022 in line with the lender-wise facility details as on 30-Jul-2022 received from the rated entity.
Criteria Details
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