Corporates

Construction

GVR Infra Projects Limited

Update
Ratings
Long-Term Issuer Rating
Long-Term Debt Facilities
Short-Term Debt Facilities

IND BBB+
IND BBB+
IND A2

Outlook
Long-Term Issuer Rating

Key Rating Drivers

Strong Order Book: The ratings of GVR Infra Projects Limited (GVR) reflect its strong order
book position of INR45.55bn as of December 2012 (3.67x FY12 revenue), providing revenue
visibility for the next two-three years.

Stable

Moderate Credit Metrics: The ratings also reflect the company's strong profitability with
EBITDA margin of 13.5% in FY12 (FY11: 12.7%) and moderate credit metrics with net adjusted
financial leverage of 3.32x in FY12 (FY11: 3.51x) and interest cover of 2.54x (3.10x).

Financial Data
GVR Infra Projects Limited
31 Mar
12

31 Mar
11

Revenues (INRm)
12,425.7 10,855.8
Operating EBITDA
1,676.2 1,380.9
(INRm)
Gross interest expense
658.8
445.3
(INRm)
Operating EBITDA/ Gross
2.54
3.10
Interest Expense (x)
Total adjusted debt
5,903.8 5,766.8
(INRm)
Cash & Equivalents
340.0
914.5
(INRm)
Total adjusted debt/
3.52
4.18
Operating EBITDA (x)
Total adjusted net debt/
3.32
3.51
Operating EBITDA (x)

Substantial Equity Requirements: The ratings are, however, constrained by GVRs

expanding portfolio of build-operate-transfer (BOT) projects, which will require equity
investments of about INR2.5bn from GVR during FY13-FY15. This may be funded partly
through debt, leading to higher leverage. GVR will also be required to fund any cost or time
overruns which may arise in such projects. However, India Ratings draws comfort from GVRs
track record of having completed their operational BOT projects on time.

What Could Trigger a Rating Action

Lower Leverage: A positive rating action would result from a sustained fall in net adjusted
debt/EBITDA to below 2.5x.
Higher Leverage: A sustained increase in net adjusted debt/EBITDA to above 4x would result
in a negative rating action.

Liquidity and Debt Structure

High Working Capital Usage: The companys usage of its fund-based working capital limits
(cash credit) of INR4.45bn has been high, reflective of the higher working capital requirements.
Moderate Outstanding Debt: At FYE12, the company had balance sheet debt of
INR5,025.9m (FYE11: INR4,611.8m), comprising working-capital loans of INR3,943.7m
(INR3,282m) and equipment loans of INR1,082.2m (INR1,079.8m). The company has also
provided corporate guarantees for the debt of its subsidiaries with outstanding amount of
INR877.9m (INR1,145m).
Negative Cash Flow: The companys funds flow from operations (FFO) has been positive
since FY06, but due to high working-capital requirements cash flow from operations (CFO) was
negative during the same period.
Provisional Financials: As per provisional unaudited financials for H1FY13, the company
reported revenue of INR5,816.5m, operating EBITDA of INR700.7m and net profit of
INR213.2m.
Analysts
Vinay Betala
+91 44 4340 1719
vinay.betala@indiaratings.co.in
Pavan Kumar
+91 44 4340 1724
pavan.kumar@indiaratings.co.in

www.indiaratings.co.in

4 February 2013

Corporates
Annex 1
Figure 1

Financial Summary
(INRm)
Summary income statement
Gross revenue (+)
Revenue growth (%)
Operating EBITDA
Operating EBITDA margin (%)
Operating EBITDAR
Operating EBITDAR margin (%)
Operating EBIT
Operating EBIT margin (%)
Gross interest expense
Pretax income
Net income

FY12

FY11

FY10

FY09

12,425.7
14.5
1,676.2
13.5
1,676.2
13.5
1,537.1
12.4
658.8
962.1
662.5

10,855.8
35.7
1,380.9
12.7
1,380.9
12.7
1,294.2
11.9
445.3
921.9
651.5

8,001.7
28.8
1,052.4
13.2
1,052.4
13.2
999.2
12.5
350.3
686.2
470.6

6,213.8
47.3
673.2
10.8
673.2
10.8
644.5
10.4
220.4
450.0
295.3

340.0
2,609.5
1,987.6
4,243.7
3,621.8
5,025.9
3,943.7
1,082.2
0.0
5,903.8

914.5
1,528.9
2,481.9
2,812.1
3,765.1
4,611.8
3,282.0
1,079.8
250.0
5,766.8

669.7
1,141.0
1,453.4
1,760.7
2,073.1
2,969.1
2,124.6
589.5
255.0
3,115.1

167.0
1,168.1
580.3
1,734.0
1,146.2
1,390.7
1,181.3
202.3
7.1
1,390.7

Summary cash flow statement

Operating EBITDA
Cash interest
Cash tax
Non-controlling interest
Other items before FFO
Funds flow from operations
Change in working capital
Cash flow from operations
Total non-operating/non-recurring cash flow
Capital expenditures
Common dividends
Free cash flow
Free cash flow margin (%)
Net acquisitions & divestitures
Other cash flow items
Cash flow from investing
Net debt proceeds
Net equity proceeds
Cash flow from financing
Total change in cash

1,676.2
-658.8
-303.5
0.0
-29.6
795.3
-1,759.4
-964.1
-712.4
-756.4
0.0
-2,432.9
-19.6
0.0
20.2
-736.2
414.1
1,500.0
1,838.2
-574.5

1,380.9
-445.3
-374.1
0.0
37.8
668.4
-678.6
-10.2
-432.7
-1,022.6
0.0
-1,465.5
-13.5
0.0
0.0
-1,022.6
1,642.7
80.0
1,710.3
244.8

1,052.4
-350.3
-238.8
0.0
-21.0
517.5
-591.2
-73.7
-156.0
-823.4
0.0
-1,053.1
-13.2
0.0
0.0
-823.4
1,578.4
0.0
1,555.8
502.7

673.2
-220.4
-163.6
0.0
-38.3
315.2
-533.4
-218.2
-12.8
-152.0
0.0
-383.0
-6.2
0.0
0.0
-152.0
724.3
6.5
550.0
167.0

Coverage ratios
FFO interest coverage
FFO fixed charge coverage
Op. EBITDAR/gross interest expense + rents
Op. EBITDAR/net interest expense + rents
Operating EBITDA/gross interest expense

2.21
2.21
2.54
3.06
2.54

2.50
2.50
3.10
3.67
3.10

2.48
2.48
3.00
3.83
3.00

2.43
2.43
3.05
4.31
3.05

Leverage ratios
Total adjusted debt/operating EBITDAR
Total adjusted net debt/operating EBITDAR
Total debt with equity credit/operating EBITDA
FFO adjusted leverage
FFO adjusted net leverage

3.52
3.32
3.00
3.46
3.49

4.18
3.51
3.34
4.14
3.54

2.96
2.32
2.82
3.42
2.90

2.07
1.82
2.07
2.60
2.60

Summary balance sheet

Cash & equivalents
Working capital
Accounts receivable
Inventory
Accounts payable
Total debt with equity credit
Short-term debt
Long-term senior secured debt
Other debt
Total adjusted debt with equity credit

Source: India Ratings, GVR

Related Criteria
Corporate Rating Methodology
(September 2012)

GVR Infra Projects Limited

February 2013

Corporates
Annex 2
Figure 2

Bank-Wise Rated Facilities

Facility rated
Fund-based working capital limits
State Bank of India
IDBI Bank
Vijaya Bank
Punjab National Bank
Axis Bank
ICICI Bank
Total
Non-fund based limits
State Bank of India
IDBI Bank
Vijaya Bank
Punjab National Bank
Axis Bank
ICICI Bank
Total

Rating

Amount rated (INRm)

IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2

2,000.0
500.0
500.0
800.0
200.0
250.0
4,250.0

IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2
IND BBB+/IND A2

5,000.0
2,800.0
1,500.0
3,250.0
500.0
1,250.0
14,300.0

Source: India Ratings, GVR

GVR Infra Projects Limited

February 2013

Corporates

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GVR Infra Projects Limited

February 2013