| Western Carriers India Limited | ||||||
| Ratings reaffirmed at 'CRISIL A-/Positive/CRISIL A2+' | ||||||
| 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 reaffirmed its ratings on the bank facilities of Western Carriers India Limited (WCIL) at ‘CRISIL A-/Positive/CRISIL A2+’.
The ratings continue to reflect the extensive experience of the promoter in the transport and logistics business, established market position, adequate infrastructure, healthy scale of operations, reputed clientele, and comfortable financial risk profile. These strengths are partially offset by large working capital requirement and susceptibility to economic downturns. |
Key Rating Drivers & Detailed Description Strengths:
The promoter has close to four decades of experience in the transport and logistics industry; his strong understanding of market dynamics and healthy relations with customers and suppliers helped the company to establish a strong market position and set up adequate infrastructure and network, with over 70 branches and multiple warehouses (rented and own). Though the vehicles are hired, the company has the necessary equipment to facilitate transport handling at many points across the country.
The company has established relationships with multiple blue-chip customers such as Hindustan Unilever Ltd ('CRISIL AAA/Stable'), Vedanta Ltd ('CRISIL AA-/CRISIL A1+/Watch Developing'), Tata Steel Ltd, and Hindalco Industries Ltd (‘CRISIL A1+’). This has sustained healthy scale, as reflected in revenue of around Rs 1,750 crore and Rs 1,633 crore for fiscals 2024 and 2023, respectively.
Networth was estimated to be strong at around Rs 350 crore as on March 31, 2024, against debt of around Rs 260 crore; which was likely to have led to a healthy gearing of around 0.7 time. Debt protection metrics remained robust, as reflected in net cash accrual to adjusted debt and interest coverage ratios of around 35% and around 6 times, respectively, for fiscal 2024.
Weaknesses:
Gross current assets were 92 days as on March 31, 2023, and are likely to deteriorate further to beyond 100 days as on March 31, 2024, due to stretched receivables. This is likely to continue to constrain operating flexibility over the medium term.
Business risk profile remains exposed to economic downturns, though this risk is mitigated by a diverse customer base across different sectors. Nevertheless, a subdued economic scenario can adversely affect scale and working capital cycle. Moreover, the domestic road freight transport industry is highly fragmented because of low entry barrier. Although the company is one of the market leaders in the FTL (full truckload) segment, its share in the domestic road freight transport industry is less than 1%. Competition has intensified in recent times with the entry of new-age start-ups, which are leveraging their advanced technological capabilities to garner market share. |
Liquidity: Strong Expected annual cash accrual of around Rs 90 crore should amply cover yearly obligation of Rs 20-25 crore, over the medium term. Bank limit utilisation was around 89.27% for the 12 months through December 2023. Improvement in average bank limit utilisation, driven by an efficiently managed working capital cycle, will remain monitorable. |
Outlook: Positive The company will continue to benefit from the extensive experience of its promoter and established relationships with reputed clients. Sustaining current revenue and operating margin, while maintaining financial risk profile, will remain monitorable over the medium term. |
Rating Sensitivity factors Upward factors
Downward factors
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About the Company Incorporated in 2011 and promoted by Mr Rajendra Sethia, WCIL provides multimodal logistic (road, rail, water, custom house agency, storage, and warehousing) services across India. The promoter and his son, Mr Kanishka Sethia, manage operations.
WCIL took over a proprietorship firm, Western Carriers, in June 2013. The firm was set up in 1976 by Mr Rajendra Sethia. |
Key Financial Indicators
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Status of non cooperation with previous CRA: WCIL has not cooperated with Credit Analysis & Research Ltd, which classified it as non-cooperative vide release dated March 16, 2021. The reason provided by the CRA is non-furnishing of information for monitoring of ratings. |
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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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||
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Criteria Details
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