| Conviction Hr Private Limited | ||
| 'CCR B+/Stable' assigned to Corporate Credit Rating | ||
| Rating Action | ||
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| 1 crore = 10 million | ||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has assigned its ‘CCR B+/Stable’ corporate credit rating to Conviction Hr Private Limited (CHPL; part of the Conviction group).
The rating reflects the group’s modest scale of operations, customer concentration in revenue profile and exposure to intense competition. These weaknesses are partially offset by its extensive industry experience of the promoters and long-Term associations with its customers. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of CHPL, Conviction, Conviction Global Limited (U.K.), Conviction Global LLC - FZ (U.A.E.). All the companies, collectively referred to as the Conviction group, operate in similar businesses, have a common management team, and have significant operational linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Weakness: Modest scale of operations: Revenues were Rs 14.72 crore for fiscal 2022. The group’s business profile is constrained by its scale of operations in the intensely human resource & employment services industry. Although the group’s revenue is expected to increase with new locations and greater team strength, modest scale will continue to limit operating flexibility.
Exposure to intense competition: The manpower staffing industry is intensely competitive, marked by the presence of a large number of unorganized as well as organized players in the domestic market. As a result, there is intense competition among the large players and the large number of unorganized players that have regional presence and offer the same services at lower cost. This results in pricing pressure for organized players, which have to incur high overheads to maintain quality of services and staff. Also, the business being largely service oriented, involves engagement of manpower, and most players in this industry face the risk of high attrition rates, driven by the intense competition among players to poach the trained manpower.
Strengths Extensive industry experience of the promoters: The promoters have an experience of over 15 years in human resource & employment services industry. This has given them an understanding of the dynamics of the market and enabled them to establish relationships with suppliers and customers.
Long Term associations with its customers: The group is having long term association with its key customers like TCS, Concentrix, JP Morgan Chase and Yes Bank, among others. The company is associated with them for around 3-5 years and works across industry verticals catering to requirements of leading companies like BFSI, IT, BPO and ITeS and other sectors. |
Liquidity: Stretched Cash accruals are expected to be over Rs 3 Crore against term debt obligations of Rs 0.30 – Rs 1.00 Crore over the medium term. The group has access to fund-based limits of Rs 0.70 crore which is utilized at 34% for the past 13 months ended April 2022. In addition, it will be act as cushion to the liquidity of the company. Current ratio is expected to moderate 1.41 time on March 31st, 2022. |
Outlook: Stable CRISIL Ratings believe the Conviction Group will continue to benefit from the extensive experience of its promoters, and established relationships with clients. |
Rating Sensitivity Factors Upward factors
Downward factors
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About the Group It is engaged in providing human resource solutions such as temporary staffing, permanent recruitments, consultancy and management services, payroll process outsourcing, training and assessments. The company has headquartered in Mumbai and various branch offices located in Pune, Ahmedabad & Bengaluru. Also established a global footprint in Dubai and London. Conviction group is promoted by Mr. Rajesh Mudhliar. |
Key Financial Indicators (Consolidated)
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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 - 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. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
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