RAC

India Ratings Assigns Vishal Infraglobal ‘IND BB-’; Outlook

Stable
Ind-Ra-Kolkata- 19 May 2017: India Ratings and Research (Ind-Ra) has assigned Vishal Infraglobal Private
Limited (VIGPL) a Long-Term Issuer Rating of ‘IND BB-’. The Outlook is Stable. The instrument-wise rating
actions are as follows.

Date of Coupon Size of Issue Rating

Instrument Type Maturity Date Rating/Outlook
Issuance Rate (million) Action
Fund-based limit - - - INR190 IND BB-/Stable Assigned
Non-fund-based
- - - INR390 IND A4+ Assigned
limit

KEY RATING DRIVERS:

The ratings reflect VIGPL’s moderate scale of operations and credit metrics. As per FY17 provisional financial,
VIGPL’s revenue declined to INR 303million (FY16: INR885 million) due to operational delays in execution of
work orders. However the credit metric remained moderate with slight detoriation on account of decline in the
topline. During FY17, its interest coverage of 1.5x (1.8x) and net leverage 5.7x (4.8x). Its operating EBITDA
margins improved to 21.6% in FY17 from 9.2% on account of decline in the raw material expenses and direct
expenses.

Ratings factors, moderate liquidity position as reflected in 98.2% of fund based utilization during 12 months
ended April’17.

The ratings are also supported by the directors’ more than a decade long experience in the construction business.
Moreover, the ratings also consider the company’s moderate unexecuted order book of INR1,097 million as of
March 2017 (3.6x of FY17 revenue) to be executed by March 2019.

RATING SENSITIVITIES:

Negative: Decline in profitability leading to deterioration in the overall credit metrics would be negative for the
ratings.

Positive: An improvement in the scale of operation and overall credit metrics will be positive for the ratings

RATING CRITERIA

‘Corporate Rating Methodology’, dated 4 January 2017, is available at www.indiaratings.co.in.

COMPANY PROFILE:

VIPL was originally established as a proprietorship concern by Mr. Virsangbhai F Chaudhary in 1990. The firm
was reconstituted as partnership firm in 2007 and subsequently as a private limited company in 2012. The
company undertakes construction of roads and bridges and is recognised as an AA class contractor by the
Government of Gujarat for the execution of road projects. The company is based out in Gujarat and executes the
contracts in that region along with few contracts in Madhya Pradesh.
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FINANCIAL SUMMARY

Vishal Infraglobal Private Limited (INR million) FY16 FY15 FY14 FY13

Summary Income Statement

Gross revenue (+) 885 1,713 1,363 616
Revenue growth (%) -48 26 121 0
Operating EBITDA (before income from associates)
81 167 137 41
Operating EBITDA margin (%) 9 10 10 7
Operating EBITDAR 81 167 137 41
Operating EBITDAR margin (%) 9 10 10 7
Operating EBIT 52 138 120 28
Operating EBIT margin (%) 6 8 9 5
Gross interest expense 45 44 36 13
Pre-tax income 16 104 91 18
Net income 10 68 63 12
Summary Balance Sheet
Cash & equivalents 12 4 59 10
Working capital 74 58 -150 -87
Accounts receivable 52 23 99 26
Inventory 206 204 110 53
Accounts payable 185 170 359 166
Total debt with equity credit 401 323 225 159
Short-term debt 285 263 147 86
Long-term senior secured debt 116 60 77 73
Long-term senior unsecured debt 0 0 0 0
Long-term subordinated debt 0 0 0 0
Other debt 0 0 0 0
Equity credit 0 0 0 0
Total adjusted debt with equity credit 401 323 225 159
Summary Cash Flow Statement
Operating EBITDA 81 167 137 41
Cash interest -45 -44 -36 -13
Cash tax -6 -36 -28 0
Non-controlling Interest 0 0 0 0
Other items before FFO 0 0 0 -41
Funds flow from operations 39 98 80 0
Change in working capital -94 -243 -40 0
Cash flow from operations -55 -145 40 0
Total non-operating/non-recurring cash flow 0 0 0 0
Capital expenditures -2 -31 -62 0
Common dividends 0 0 0 0
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Free cash flow -57 -176 -22 0

Free cash flow margin (%) -6 -10 -2 0
Net acquisitions & divestitures 0 0 0 0
Other cash flow items -1 0 1 0
Cash flow from investing -3 -31 -61 0
Net debt proceeds 78 0 0 0
Net equity proceeds -12 23 4 0
Cash flow from financing 66 23 4 0
Total change in cash 8 -154 -17 0
Coverage Ratios (x)
FFO interest coverage 1.7 3.0 3.0 0.0
FFO fixed charge coverage 1.7 3.0 3.0 0.0
Operating EBITDAR/gross interest expense + rents 1.8 3.8 3.8 3.1
Operating EBITDAR/net interest expense + rents 2.2 5.0 4.7 0.0
Operating EBITDA/gross interest expense 1.8 3.8 3.8 3.1
Leverage Ratios (x)
Total adjusted debt/operating EBITDAR 4.9 1.9 1.6 3.9
Total adjusted net debt/operating EBITDAR 4.8 1.9 1.2 3.7
Total debt with equity credit/operating EBITDA 4.9 1.9 1.6 3.9
FFO adjusted leverage 5.3 2.5 2.1 0.0
FFO adjusted net leverage 5.2 2.4 1.5 0.0
Source: VIGPL, Ind-Ra

COMPLEXITY LEVELS OF THE INSTRUMENTS

Bank facilities are instruments with low complexity levels, where the relationship between inherent risk factors
and intrinsic return characteristics is straightforward.

For more information, visit https://www.indiaratings.co.in/complexity-indicators.

Contacts:
Primary Analyst
Vivek Kumar Choudhary
Analyst
+91 33 4030 2518
India Ratings and Research Pvt Ltd
Room No. 1201, 12th Floor
Om Towers 32, Chowringhee Road
Kolkata 700071

Secondary Analyst
Pratibha Singh
Analyst
+91 33 4030 2506

Committee Chairperson
Prakash Choraria
Associate Director
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+91 33 4030 2500

Media Relations: Mihir Mukherjee, Mumbai, Tel: +91 22 4035 6121, Email:
mihir.mukherjee@indiaratings.co.in

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf
of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell,
make or hold any investment, loan or security or to undertake any investment strategy with respect to any
investment, loan or security or any issuer.

About India Ratings and Research: India Ratings and Research (Ind-Ra) is India's most respected credit
rating agency committed to providing India's credit markets accurate, timely and prospective credit opinions.
Built on a foundation of independent thinking, rigorous analytics, and an open and balanced approach towards
credit research, Ind-Ra has grown rapidly during the past decade, gaining significant market presence in India's
fixed income market.

Ind-Ra currently maintains coverage of corporate issuers, financial institutions (including banks and insurance
companies), finance and leasing companies, managed funds, urban local bodies, structured finance and project
finance companies.

Headquartered in Mumbai, Ind-Ra has six branch offices located in Ahmedabad, Bengaluru, Chennai, Delhi,
Hyderabad and Kolkata. Ind-Ra is recognised by the Securities and Exchange Board of India, the Reserve Bank
of India and National Housing Bank.

India Ratings is a 100% owned subsidiary of the Fitch Group.

For more information, visit www.indiaratings.co.in.

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