| Inspira Enterprise India Private Limited | ||||||
| Ratings migrated to 'CRISIL BBB+/Stable/CRISIL A2'; Rated amount enhanced | ||||||
| Rating Action | ||||||
| ||||||
| & * - Issuer did not cooperate; based on best-available information^ * - Issuer did not cooperate; based on best-available information | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of Inspira Enterprise India Private Limited (IEIPL) to ‘CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating’. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL Ratings is migrating the rating on bank facilities of IEIPL to ‘CRISIL BBB+/Stable/CRISIL A2’.
The ratings reflects extensive experience of the company's promoter in the information technology (IT) business, and their established relationships with customers and suppliers. The ratings also factor in IEIPL's healthy financial risk profile marked by healthy net worth and debt protection metrics. These strengths are partially offset by large working capital requirements and exposure to risks inherent in a tender-based business. |
Analytical Approach CRISIL Ratings has considered unsecured loan from promoters outstanding to the tune of Rs 40.56 crore as on March 31, 2021 as debt, as the loans are expected to be paid off in near term. |
Key Rating Drivers & Detailed Description Strengths * Extensive experience of promoters in the information technology (IT) business, and their established relationships with customers and suppliers Over decade-long experience of the promoters in the IT distribution and system integration business and their established relationships with reputed original equipment manufacturers and their distributors, will continue to support the business risk profile. Inspira has a reputed clientele, comprising various banking/financial services entities and central and state government agencies. Inspira’s domain expertise and high level of trust has led to revenues CAGR (compound annual growth rate) of 16% and improvement in operating margin to ~10% from ~6.3% over the 3 years ending fiscal 2021; which is expected to continue over medium term.
* Healthy financial risk profile Net worth has been healthy at ~Rs 211.8 crore as on March 31, 2021, with moderately high total outside liabilities to adjusted net worth (TOLANW) ratio of 1.94 times (improved from 2.76 times a year earlier). Interest coverage and net cash accrual to adjusted debt ratios were also healthy at 10.4 times and 0.88 time, respectively, in fiscal 2021. Financial risk profile should remain healthy over the medium term with bulk of future capital expenditure and investments (if any) to be funded through internal accruals. Financial risk profile is however constrained by sizeable contingent liabilities in form of performance bank guarantees given in normal course of business; however CRISIL Ratings doesn’t expect these liabilities to materialize.
Weaknesses * Large working capital requirement Gross current assets (GCA) at 255 days as on March 31, 2021, could be attributed to stretched receivables of around 217 days. GCA and receivables days were at 247 and 187 days respectively as on March 31, 2020. Working capital requirement is expected to remain at similar levels.
* Exposure to risks inherent in tender-based business The tender-based nature of business continues to restrict revenue visibility; despite order book of around Rs 436 crore. However in order to mitigate this risk company provides services for monitoring cyber security through its command centre; and also by adopting new and upcoming technologies on an ongoing basis. |
Liquidity: Adequate Inspira has adequate liquidity driven by expected cash accruals of more than Rs 60 crore per annum over medium term and unencumbered cash and cash equivalents of Rs 33 crore as on March 31, 2021. The company also has access to total bank lines of Rs 270 crore (including fund based bank limits of Rs 34 crore), highly utilized to the tune of around 90% over the 12 months trailing May, 2021. The company does not have any long term repayment obligation and no major capex plans over fiscal 2022 and 2023. Liquidity is constrained by huge bank guarantee (BG) requirement (o/s BG is Rs 215 crore as on May 2021) which has to be furnished for entire contract value (for some of contract) and that too for period of around 4-5 years. However recent reduction in bank guarantee requirements from 10% to 3% for government orders will support liquidity profile. CRISIL Ratings believes that Inspira’s net cash accruals, cash and cash equivalents and unutilised bank limits will be sufficient to fund its incremental working capital requirements over the medium term. |
Outlook: Stable CRISIL Ratings believes Inspira will continue to benefit from the extensive experience of its promoter, and the track record of completing large value tenders in a timely manner. |
Rating Sensitivity Factors Upward Factors:
Downward Factors:
|
About the Company Inspira was set up in 2008, by Mr Prakash Jain. Headquartered in Mumbai, is leading IT Solution Company with expertise across Cyber Security, Blockchain, Robotics Process Automation, Cloud, Networking, Health-tech and Smart City Solutions. It is OEM partner of the Company includes Fortinet, Mcafee, Juniper Networks, Paloalto Networks, Thales, Symantec, Trend Micro, Array Networks Inc., HP India Ltd, Dell and F5 etc. |
Key Financial Indicators
*Provisional numbers |
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)
&includes sub limit for cash credit of Rs 20 crore
^includes sub limit for cash credit of Rs 3 crore
%includes sub limit for bank guarantee of Rs 50 crore and sub limit for cash credit of Rs 20 crore
|
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
* - Issuer did not cooperate; based on best-available information
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Criteria Details
|