Rating Rationale

Topline Infra Projects Pvt Ltd

18 August, 2017

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 96.78 Cr of
Topline Infra Projects Pvt Ltd.

Particulars
Facility Amount
Tenure Rating *
Rated (Rs. Cr)
Previous Present Previous Present
BWR BBB
Fund based BWR BBB
(Pronounced as
Cash credit Long Term (Pronounced as
15.00 15.00 BWR Triple B)
BWR Triple B)
Term loan 4.84 3.78 (Re-affirmed)
Outlook : Stable
Outlook : Stable

BWR A3+
Non-Fund Based BWR A3+
Short Term (Pronounced as
(Pronounced as
BG 38.00 78.00 BWR A Three Plus)
BWR A Three Plus)
(Re-affirmed)

INR Ninety Six Crores and Seventy Eight Lakhs

Total 57.84 96.78
only
^Please refer to BWR website www.brickworkratings.com/ for definition of the ratings

Rating Reaffirmed
Rationale/Description of Key Rating Drivers/Rating sensitivities:

BWR has principally relied upon the audited financial results up to FY16, provisional financials
for FY17, projections for FY18, publicly available information and information/clarifications
provided by the ccompany.

The rating draws strength from the extensive industry experience of the promoters and
management, established track record of the company, improvement in total operating revenue in
FY17 with higher profit margins, low gearing levels and healthy debt protection metrics. These
rating strengths are partially offset by the uncertainty in revenue streams emanating from the
cyclical nature of business, moderate order book position, risks relating to the tender based
operations, high dependence on government contracts and geographical concentration, mainly in
Bihar. Going forward, the ability of the company to achieve the targeted revenue and maintain
profitability margins, improve order book position, effectively execute its work orders in a
timely manner, achieve geographical and customer diversification in its revenue profile shall
remain key rating sensitivities.

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Key Rating Drivers
Rating Strengths:
Long track record of operations and experienced management - Mr. Saurav Kumar Agarwal,
Mr Gaurav Kumar Agarwal and Mrs Usha Devi Agarwal are the directors in the company. Mr.
Saurav has over 10 years of business experience in the civil construction industry and looks after
the day to day operations. TIPPL is into same line of business since 2004 and thus has long track
record of operations.
Established track record and consistently improvement in operating income- Total
operating income of the company increased to Rs 202.11 Cr on provisional basis during FY17 as
against Rs 165.57 Cr in FY16.
Low gearing and strong debt protection indicators - The liquidity position of the company
has remained comfortable. For FY17 (Provisional) interest coverage ratio improved to 12.56x.as
against 5.40x in FY16. The total debt to TNW ratio remains satisfactory at 0.22x as on March
31, 2017 as compared to 0.40x as on March 31, 2016.
Strong profitability indicators – Operating profit margin for FY17 (IProv.) stood at 14.56% as
against 7.79% margin during FY16. PAT margin has also improved in FY17 to 12.66% on
provisional basis as against 3.53% in FY16

Rating Weaknesses
Geographical and customer concentration of order book: The client base of the company is
skewed towards government departments in Bihar with company generating majority of its
income from this institution. Furthermore, unlike many other construction companies, it has
remained focused on the road and building segment and moreover its orders under execution and
the orders at bidding stage are also in the same segment.
High competitive intensity in the government civil construction segment - The construction
industry is highly fragmented in nature with presence of large number of unorganized players
and a few large organized players which coupled with the tender-driven nature of construction
contracts poses huge competition and puts pressure on the profitability margins of the players.
The current orders in hand which are yet to be executed is about Rs 100.70 Cr

Rating Outlook: Stable

BWR believes that Topline Infra Projects Pvt Ltd.’s business risk profile will be maintained
over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the
medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit
show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go
down and profit margins show lower than expected figures.

About the Company:

Incorporated in March 2004 at Kolkata, Topline Infra Projects Pvt Ltd is an engineering,
construction and services. Topline is managed by Mr. Saurav kumar Agarwal and Mr. Gaurav
Kumar Aggarwal and Mrs. Usha Devi Agarwal. Company engaged in infrastructure development
projects and civil works mainly construction of roads, for government agencies such as Bihar

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Public Works Department and Rural Works Department, Bihar. The entire revenue for FY17
came from civil construction work. All the current work order is concentrated in Bihar only.

Company Financial Performance

ABS FY16 FY17 Prov.
Net Sales 165.57 202.11
EBIDTA 12.90 29.43
PAT 5.85 25.59
Tangible Net worth 63.86 92.82
Total Debt : TNW 0.40 0.22
Current Ratio 1.37 2.16

Rating History for the last three years:

Sl.
Facility Current Rating (January 2017) Rating History
No.
Rating Rating
Rating
Amount Assigned in Assigned in
Assigned in
Type (Rs Cr) Rating 2015 2014
2016

2 Cash Credit 15.00 BWR BBB BWR BBB

Long
Outlook: Outlook: NA NA
Term
2 Term Loan 3.78 Stable Stable
Short
3 BG 78.00 BWR A3+ BWR A3+ NA NA
Term
Any other information: NA
Status of non-cooperation with previous CRA: NA

Hyperlink/Reference to applicable Criteria:

 General Criteria
 Approach to Financial Ratios
 Short Term Debt
 Infrastructure Sector

Analytical Contacts Media

media@brickworkratings.com
R.K. Sharma
GM, Ratings Relationship Contact
analyst@brickworkratings.com
bd@brickworkratings.com
Phone: 1-860-425-2742

3 18 Aug, 2017
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Note on complexity levels of the rated instrument:

BWR complexity levels are meant for educating investors. The BWR complexity levels are available
at www.brickworkratings.com/download/ComplexityLevels.pdf Investors queries can be sent to info@brickworkratings.com.

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DISCLAIMER
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,
which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the
precision or completeness of the information obtained. And hence, the information in this report is presented “as is” without any
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