Rating Rationale
March 27, 2025 | Mumbai
PCI Infraprojects Private Limited
'Crisil BBB/Stable/Crisil A3+' assigned to Bank Debt
 
Rating Action
Total Bank Loan Facilities RatedRs.100 Crore
Long Term RatingCrisil BBB/Stable (Assigned)
Short Term RatingCrisil A3+ (Assigned)
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 assigned its ‘Crisil BBB/Stable/Crisil A3+’ ratings to the bank loan facilities of PCI Infraprojects Pvt Ltd (PIPL).

 

The ratings reflect the company’s established market position, supported by the extensive experience of the promoters in the electric components industry and a comfortable financial risk profile. These strengths are partially offset by the working capital intensive operations of the company and moderate scale of operations.

Analytical Approach

Unsecured loan of Rs 11.43 crore, expected as on March 31, 2025, has been treated as 75% equity and 25% debt as it is expected to remain in the business and is subordinated to external debt.

Key Rating Drivers & Detailed Description

Strengths:

  • Established market position, supported by the extensive experience of the promoters: The decade-long experience of the promoters in the electric components industry, their strong understanding of market dynamics, and healthy relationships with customers and suppliers have helped PIPL build a diversified customer base across geographies and establish its presence in the domestic market. The company manufactures cables and executes engineering, procurement and construction (EPC) contracts for electrification, water supply and the setting up of solar plants. The diversified offerings insulate the company from a downturn in any one segment. Revenue is estimated to grow at compound annual growth rate (CAGR) of 45-50% for the three fiscals through March 2025 driven by healthy execution of EPC orders. A healthy order book of over Rs 1,100 crore as of December 2024 (~Rs 1,000 crore under the EPC segment and ~Rs 100 crore under the cable manufacturing segment) provides healthy revenue visibility over the medium term with revenue expectation of Rs 320-330 crore in fiscal 2025 (Rs 219 crore recorded till December 2024). The business risk profile will continue to be supported by the established market position of the company and sustained improvement in revenue, backed by timely execution of existing and new orders, which will be monitorable.

 

  • Comfortable financial risk profile: The financial risk profile is driven by networth of Rs 59-60 crore in fiscal 2025 which is expected to grow to Rs 90-100 crore in fiscal 2026, backed by steady accretion to reserves. The capital structure is expected to remain comfortable with gearing and total outside liabilities to tangible networth (TOLTNW) ratio expected at 0.9-1.0 time and 2.0-2.2 times, respectively, in fiscal 2025 on account of moderate reliance on external debt. Though the working capital requirement is expected to increase, going forward, with ramp up of operations thereby increasing the interest cost as well, it will be offset by steady operating profitability resulting in comfortable interest coverage ratio expected at 3.5-4.5 times in upcoming fiscals. Furthermore, with no debt-funded capital expenditure (capex) proposed to be undertaken over the medium term for capacity expansion, the financial risk profile is expected to improve further, which will be monitorable.

 

Weaknesses:

  • Working capital-intensive operations: The operations of the company are working capital intensive as reflected in the gross current assets (GCAs) of 170-180 days in the two fiscals through 2024 and expected to remain at similar level in fiscals 2025 and 2026 as well, driven by debtors of 80-90 days and inventory of 50-60 days. Going forward, with ramp up in the scale of operations and major revenue to be contributed by the EPC segment wherein the debtor collection cycle is higher, the working capital requirement is expected to increase. Hence, efficient working capital management and continued moderate reliance on external debt will remain monitorable.

 

  • Moderate scale of operations: The scale has improved over the past few fiscals with revenue growing from Rs 85 crore in fiscal 2022 to Rs 204 crore in fiscal 2024. The revenue is estimated to grow at CAGR of 45-50% for the three fiscals through 2025 reaching Rs 320-330 crore. However, at this level, the scale continues to remain moderate. The company operates in two business segments- manufacturing of cables and the EPC segment. The scalability is constrained by the tender-based nature of operations. Though the existing order book of over Rs 1,100 crore provides healthy revenue visibility over the medium term, timely execution of the EPC contracts and regular receipt of new orders under the manufacturing segment, leading to consistently strong improvement in revenue, will remain monitorable.

Liquidity: Adequate

PIPL is expected to generate net cash accrual of Rs 20-22 crore, over the medium term, against debt obligation of Rs 3-4 crore along with unencumbered cash and cash equivalent of ~Rs 21.0 crore as of January 2025. PIPL also has access to fund-based limits of Rs 55.0 crore, utilised at ~68% on average during the 12 months through January 2025. Crisil Ratings expects internal accrual, cash and cash equivalent and unutilised bank lines to be sufficient to meet the debt obligation as well as incremental working capital requirement.

Outlook: Stable

PIPL will continue to benefit from the extensive experience of its promoters and established relationships with clients.

Rating sensitivity factors

Upward factors:

  • Improvement in scale of operations along with stable operating margin leading to higher-than-expected cash accrual
  • Efficient working capital management leading to better liquidity and financial risk profiles with TOLTNW ratio below 1.7-1.8 times

 

Downward factors:

  • Decline in operating income or operating margin leading to lower-than-expected cash accrual
  • Stretched working capital cycle or any large debt-funded capex adversely affecting the financial risk profile with TOLTNW ratio increasing to over 2.5 times

About the Company

PIPL was incorporated in 2021 as PCI Wires Pvt Ltd and got its present name in October 2023. The company manufactures electrical cables and conductors. Its manufacturing facility is in Jaipur. PIPL is also engaged in design, engineering, erection, testing and commissioning of high-voltage and extra high-voltage sub-stations and transmission lines, high voltage distribution system (HVDS) and feeder separation schemes (FSS).

 

PIPL is owned and managed by Mr Ankit Tayal, Mr Shobhit Sharma, Mr Sumit Tayal and Mr Mohit Sharma.

Key Financial Indicators

Particulars

Unit

2024

2023

Revenue

Rs crore

204.36

132.31

Profit after tax (PAT)

Rs crore

13.17

6.18

PAT margin

%

6.44

4.67

Adjusted debt/adjusted networth

Times

1.36

1.82

Interest coverage

Times

2.65

2.6

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 and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 17.00 NA Crisil BBB/Stable
NA Non-Fund Based Limit NA NA NA 83.00 NA Crisil A3+
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 17.0 Crisil BBB/Stable   --   --   --   -- --
Non-Fund Based Facilities ST 83.0 Crisil A3+   --   --   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 7 Canara Bank Crisil BBB/Stable
Cash Credit 5 HDFC Bank Limited Crisil BBB/Stable
Cash Credit 5 YES Bank Limited Crisil BBB/Stable
Non-Fund Based Limit 49 Canara Bank Crisil A3+
Non-Fund Based Limit 20 HDFC Bank Limited Crisil A3+
Non-Fund Based Limit 14 YES Bank Limited Crisil A3+
Criteria Details
Links to related criteria
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)
Basics of Ratings (including default recognition, assessing information adequacy)

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