| GPT Infraprojects 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 long term bank facilities GPT Infraprojects Ltd (GPT; part of the GPT group) to ‘Positive’ from ‘Stable’ while reaffirming the rating at ‘CRISIL BBB+’. Short term rating has been reaffirmed at ‘CRISIL A2’.
The revision in outlook reflects GPT’s improved business risk marked by moderate revenue growth rate with CAGR of 9% during the last four fiscals ended FY23, while operating margin remained moderate at more than 11% during the same period. Healthy order book from established principles provides strength to the business risk profile. Streamlined project execution and improvement in bill realization cycle has led to reduction in unbilled revenue amount. The same has led to improved working capital cycle marked by GCA days of around 237 days in FY23 (previously 292 days in FY21). Further, with no major increment in external borrowing, absence of any major debt funded capex plans and reduced working capital cycle, debt protection metrics has also improved marked by interest coverage of more than 2.5 times in FY23 (previously 2.2 times in FY21). Going forward, improvement in working capital cycle and its impact on interest coverage and liquidity will remain key rating sensitivity factor.
The ratings continue to reflect the extensive experience of the promoter in the civil construction business, and the strong project execution capabilities, healthy order pipeline and moderate financial risk profile of the company. These rating strengths are partially offset by working capital intensive operations and the exposure to risks arising from the tender-based nature of business. |
Analytical Approach: For arriving at its ratings, CRISIL Ratings has combined the business and financial risk profiles of GPT and its subsidiaries, GPT Investments Pvt Ltd, GPT Concrete Products South Africa (Pty) Ltd, Jogbani Highway Pvt Ltd and associate, GPT TransNamib Concrete Sleepers (Pty) Limited (together referred to as the GPT group), as these all entities are under a common management and engaged in the same business and have significant 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 & Detailed Description Strengths:
Weaknesses:
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Liquidity: Adequate Average month-end bank limit utilization for the last 12 months ended May 2023 has remained adequate at around 93.6%. Liquidity remains adequate due to reduced working capital cycle and sufficient net cash accruals, expected at more than Rs.55-60 crore per fiscal against term debt obligations of Rs 10-11 crore in the medium term. Moderate cash and cash equivalents (including encumbered as well as unencumbered cash) of more than Rs.25.5 crore as on March 31, 2023 showcases moderate liquidity. Current ratio remains moderate at 1.3 times as on March 31, 2023. |
Outlook: Positive CRISIL Ratings believes GPT will continue to benefit from its established market position in the construction business, over the medium term |
Rating Sensitivity factors Upward factors:
Downward factors:
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About the Company GPTIL is the flagship company of the GPT Group, which undertakes civil infrastructure projects and manufactures concrete sleepers and healthcare. GPTIL has been promoted by Mr Dwarika Prasad Tantia, the chairman and Mr Shree Gopal Tantia, the managing director. Mr Atul Tantia and Mr Vaibhav Tantia (sons of Mr DP Tantia) are the chief financial officer and chief operating officer, respectively. |
Key Financial Indicators
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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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