PR Sannverse Railtech 10nov23
PR Sannverse Railtech 10nov23
PR Sannverse Railtech 10nov23
Detailed Rationale:
The revision of the ratings assigned to the bank facilities of Sannverse Railtech Private Limited
continue to derive strength from its experienced promoters in infrastructure sector, healthy
order book, improved financial risk profile & comfortable capital structure and debt protection.
However, the rating strengths are partially offset by exposure to competitive segment and
inherent risk in nature of business & tender-based nature of operations with intense
competition in the industry.
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Key Rating Sensitivities:
Upward Factors:
- Growth in scale of operation with improvement in profit margins leading to
improvement in cash accruals on sustained basis.
- Increase in order book and timely execution of the same
Downward Factors:
- Decline in operating income and profitability.
- Substantial decline in execution of work orders.
- Stretch in the working capital cycle negatively impacting liquidity position.
Healthy Order book - The company has an unexecuted order book position Rs. 1654.21
Crore, thereby, giving medium term revenue visibility. However, the same is concentrated
towards contracts from state government departments.
Improved financial risk profile - The total operating income improved to Rs. 248.95 Cr. in
FY23 from that of Rs. 101.95 Cr. in FY22. Simultaneously, the EBITDA of the company
improved to Rs 24.93 Cr in FY23 from Rs 10.80 Cr in FY22 and the PAT of the company
stands improved to Rs 14.94 Crs in FY23 from Rs 6.44 Crs in FY22. The company has
achieved revenues in tune of Rs 200crs for a period from April 23 to September 23 as informed
by the management of the company.
Comfortable capital structure and debt protection metrics - The capital structure marked
by an overall gearing stood at 0.68 times as on March 31, 2023.The net worth of the company
stood at Rs.26.56 crore in FY 2023 as compared to Rs.11.77 crore in FY 2022. Interest service
coverage ratio (ISCR) is healthy and stood 12.39 times in FY2023 as against 8.48 times in FY
2022. The debt service coverage ratio (DSCR) of the company also stood healthy at 5.05
times in FY2023.
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Key Rating Weaknesses:
Exposure to competitive segment and Inherent risk in nature of business - Intense
rivalry, many participants, and low entry barriers are characteristics of the industry. For
government agencies, the corporation builds roads as part of its operations. Additionally, the
fierce competition in this market may lead to aggressive project bidding, which would affect
the company's profit margins. The primary business risks faced by the corporation in the sector
include economic fragility, regulatory risks in developing markets, delays in government
payments, project execution risk, and variable input costs.
Applicable Criteria:
Criteria of assigning Rating Outlook
Rating Methodology for Infrastructure Companies
Financial Ratios & Interpretation (Non-Financial Sector)
Liquidity – Adequate
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About the Company
Sannverse Railtech Private Limited Erstwhile Known as Millennium Infra & Realty Projects
Private Limited. The name of the company has changed with effect from May 04, 2023 (as per
Certificate of Incorporation). Sannverse Railtech Pvt Ltd. (SRPL) operates in different sectors
including construction of Roadway, Railway, Water Supply, Power, Real estate and
Consultancy. Currently, the company caters to construction solutions to Roads, Buildings, and
Bridges, Dams & Irrigation projects. It executes projects for both Government and private
clients Pan-India. The company has considerable reliance on government contracts for
construction of new roads & repairing of the existing roads for the various state departments.
Financials: Standalone
(Rs. crore)
For the year ended/* 31-03-2022 31-03-2023
As On
Audited Audited
Total Operating Income 101.95 248.95
EBITDA 10.80 24.93
PAT 6.44 14.94
Total Debt 5.08 18.15
Tangible Net-worth 11.77 26.56
Ratios
EBITDA Margin (%) 10.60 10.01
PAT Margin (%) 6.32 5.98
Overall Gearing Ratio (x) 0.43 0.68
*Classification as per Infomerics' standards
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Rating History for last three years:
Sr. Name of Current Ratings Rating History for the past 3 years
No. Instrument/ (Year 2023-24)
Facilities Type Amount Rating Date(s) & Date(s) & Date(s) &
(Rs. Rating(s) Rating(s) Rating(s)
crore) assigned assigned assigned
in 2022-23 in 2021-22 in 2020-21
(Dec 23,
2022)
1. Long Term Long 55.00 IVR IVR BB+/ - -
Fund Based Term BBB- Stable
Bank Facilities /Stable
– Cash Credit
2. Long Term Long 40.00 IVR IVR BB+/ - -
Fund Based Term BBB- Stable
Bank Facilities /Stable
– Proposed
3. Short Term Short 37.50 IVR A3 IVR A4+ - -
Non-Fund Term
Based Facility
- Bank
Guarantee
4. Short Term Short 107.50 IVR A3 IVR A4+ - -
Fund Based Term
Bank Facilities
– Proposed
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Annexure 1: Details of Facilities:
Name of Facility Date of Coupon Maturity Size of Rating
Issuance Rate/ Date Facility Assigned/
IRR (Rs. crore) Outlook
Long Term Fund Based - - - 55.00 IVR BBB-
Bank Facilities – Cash /Stable
Credit
Long Term Fund Based - - - 40.00 IVR BBB-
Bank Facilities – /Stable
Proposed
Short Term Non-Fund - - - 37.50 IVR A3
Based Facility - Bank
Guarantee
Short Term Fund Based - - - 107.50 IVR A3
Bank Facilities –
Proposed
https://www.infomerics.com/admin/prfiles/len-SRPL-nov23.pdf
Applicable
Note on complexity levels of the rated instrument: Infomerics has classified instruments