| Navkar Corporation Limited | ||||||
| Long-term rating continues on 'Watch Developing'; 'CRISIL A2+' assigned to short-term bank debt and placed on 'Watch Developing'; Rated amount enhanced for Bank Debt | ||||||
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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 continued its rating on the long-term bank loan facilities of Navkar Corporation Ltd (NCL) on ‘Rating Watch with Developing Implications’ while assigned its ‘CRISIL A2+' rating to the short term bank facilities and placed it on 'Rating Watch with Developing Implications'.
The ratings were placed on developing watch following the announcement by NCL that its promoters have entered into an agreement with JSW Port Logistics Pvt Ltd (wholly owned subsidiary of JSW Infrastructure Ltd) to sell their entire stake of 70.37% in NCL. CRISIL Ratings understands that the completion of the SPA is subject to receipt of approvals from the relevant authorities CRISIL Ratings will monitor these developments and is in discussion with NCL to better understand the same and will remove the rating from Watch and take a final rating action completion of the transaction. CRISIL Ratings believes there is limited downside risk due to the said agreement.
The rating continues to reflect the established market position of NCL, along with integrated service offerings, strong presence at the Jawaharlal Nehru Port (JNPT) and strategically located facilities, healthy relationships with shipping lines and expanding customer base, and strong financial risk profile. These strengths are partially offset by exposure to intense competition in CFS (container freight station) operations, susceptibility of revenue to cargo movement and change in customs policy, nascent stage of operations at inland container depot (ICD) in Morbi (Gujarat) impacting profitability, and weak return on capital employed (RoCE). |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Strong Bank limit utilisation is low around 31% over the 12 months ended March 2024. Annual Net cash accruals is expected to be Rs 69-93 crore which is sufficient against term debt obligation of Rs 33-37 crore over the medium term. In addition, it will act as cushion to the liquidity of the company. Further, expected inflow of Rs. 50 crore, from sale of ICD, Tumb in fiscal 2025, will support liquidity. Current ratio was healthy at 5.8 times as on March 31, 2023. Company has moderate cash and bank balance of Rs 15 crore as on September 30, 2023. Low gearing and moderate networth support financial flexibility. |
Rating Sensitivity factors Upward factors:
Downward factors:
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About the Company Incorporated in 2008, NCL is a cargo transit service provider through CFS, ICD, Private Railway Freight Terminal (PFT), and multi-modal logistics park. NCL operates three CFSs, Ajivali CFS 1, Ajivali CFS 2 and Somathane CFS, located in Panvel, Maharashtra, near JNPT. The facilities are equipped to handle 5,35,000 twenty feet equivalent units (TEUs) per annum. It also provides other services such as packing, labelling, palletizing, shrink wrapping, strapping, jumbo-bags packing and carting. NCL also has an ICD in Morbi with an aggregate installed capacity of 2,00,000 TEUs per annum and is also facilitated with a PFT. NCL also offers domestic cargo movement through railways under its PFT domestic business.
NCL is promoted by Mr Mehta and family and is listed on the Bombay Stock Exchange and National Stock Exchange. |
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 - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||
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Criteria Details
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