August 05, 2014 Mumbai
M/s. P. Venkateswara Rao
Update as on August 05, 2014
This update is provided in continuation of the rating rational below.
The key rating sensitivity factors for the rating include:
Improvement in operating profitability
Working capital management
Extent of capital expenditure (capex) and its funding mix
Withdrawals by partners
CRISIL keeps all its outstanding ratings under continuous surveillance. Accordingly, it seeks regular updates from companies on the business and financial performance. CRISIL also identifies information availability risk as a key credit factor in the rating assessment as outlined in its criteria ‘Information Availability Risk in Credit Ratings’. CRISIL is awaiting adequate information from M/s. P. Venkateswara Rao (PVR) and will provide updates on relevant developments from time to time.
About the Company
PVR was established in 1984 as a proprietary concern by Mr. P. Venkateswara Rao; it was reconstituted as a partnership concern in 1989, with Mr. P. Venkateswara Rao and his family members as its partners. PVR is engaged in construction of roads, roads over bridges, road under bridges, canals, and other allied civil construction activity.
Please note: This update should not be contruted as a rating reaffirmation.
August 17, 2012 www.crisil.com1
August 17, 2012 Mumbai
M/s. P. Venkateswara Rao
'CRISIL BB/Stable/CRISIL A4+' assigned to bank facility(ies)
Total Bank Loan Facilities Rated Rs.230Million
Long-Term Rating CRISIL BB/Stable (Assigned)
Short-Term Rating CRISIL A4+ (Assigned)
(Refer to Annexure 1 for details on facilities)
CRISIL has assigned its ‘CRISIL BB/Stable/CRISIL A4+’ ratings to the bank facilities of M/s. P.
Venkateswara Rao (PVR).
The ratings reflect the benefits that PVR derives from its established market position, marked by a healthy order book, and its promoters’ extensive experience in the civil construction industry. The ratings also reflect the firm’s above-average financial risk profile, marked by a comfortable gearing and average debt protection metrics albeit constrained by a small net worth. These rating strengths are partially offset by PVR’s small scale, and working-capital-intensive nature, of operations, and exposure to intense competition in the civil construction industry.
Outlook: Stable
CRISIL believes that PVR will continue to benefit over the medium term from its healthy order book and its experienced management. The outlook may be revised to ‘Positive’ if the firm diversifies its revenue profile and improves its profitability, while it maintains its capital structure and revenue growth. Conversely, the outlook may be revised to ‘Negative’ in case PVR reports deterioration in its financial risk profile, most likely because of reduced revenues and margins or a large debt-funded capital expenditure, or in case the firm faces delays in its project execution or in receipt of bills from various principal contractors or in case of significant withdrawal by partners.
About the Firm
PVR was established in 1984 as a proprietary concern by Mr. P. Venkateswara Rao; it was reconstituted as a partnership concern in 1989, with Mr. P. Venkateswara Rao and his family members as its partners. PVR is engaged in construction of roads, roads over bridges, road under bridges, canals, and other allied civil construction activity.
PVR, on a provisional basis, reported a profit after tax (PAT) of Rs.16.2 million on net sales of Rs.258.6 million for 2011-12 (refers to financial year, April 1 to March 31), as against a PAT of Rs.16.2 million on net sales of Rs.336.7 million for 2010-11.
CRISIL Complexity Levels are assigned to various types of financial instruments. The CRISIL Complexity Levels are available on www.crisil.com/complexity-levels. Investors are advised to refer to the CRISIL Complexity Levels for instruments that they desire to invest in. Investors may also call the CRISIL Helpline at +91 22 3342 3047 / + 91 22 3342 3064 with queries on specific instruments.
August 17, 2012 www.crisil.com2
Annexure 1 - Details of various bank facilities
Note:
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About CRISIL Limited
CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.
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Last updated: April 30, 2012
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Current facilities Previous facilities
Facility Amount
(Rs. Million) Rating Facility Amount
(Rs. Million) Rating Proposed
Overdraft Facility 35 CRISIL
BB/Stable -- 0 --
Proposed Letter of Credit & Bank
Guarantee
90 CRISIL A4+ -- 0 --
Letter of credit &
Bank Guarantee 60 CRISIL A4+ -- 0 --
Overdraft Facility 45 CRISIL
BB/Stable -- 0 --
Total 230 -- Total 0 --
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