CARE Ratings has upgraded its rating on the long-term bank facilities & non-convertible debentures of JMC Projects (India) to 'CARE AA-; Stable' from 'CARE A+; Stable'.
Further, it has upgraded the rating of short-term bank facilities of the company as 'CARE A1+' from 'CARE A1'.
CARE Ratings said that the revision in the ratings assigned to the bank facilities and instruments of JMC Projects (India) (JMC) takes into account sustained growth in total operating income (TOI) for the last three quarters ended June 2021 as compared with previous quarters amidst execution challenges pertaining to COVID-19 pandemic.
Strong order book position largely from reputed clientele and demonstrated execution capability of JMC in civil construction as well as infrastructure projects are expected to aid growth momentum and healthy cash accruals generation.
The ratings also take cognizance of meaningful progress achieved in restructuring of its two operational toll roads and stake sale of one operational toll road. Hence, the ratings factor expected improvement in the debt coverage indicators and liquidity of JMC upon conclusion of the aforementioned initiatives.
The ratings agency further said that the ratings continue to draw strength from its strong parentage, being a subsidiary of Kalpataru Power Transmission. The ratings continue to derive strength from its established presence in diversified areas of construction business and professional management.
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The above rating strengths, however, continue to be tempered on account of moderate profitability, high leverage, working capital intensive nature of its operations and the financial support being extended to its special purpose vehicles (SPVs) operating road projects on account of their subdued performance leading to high exposure to its Build-Operate-Transfer (BOT) based road projects, it added.
JMC Projects (India) has presence in diverse areas of construction including industrial, commercial, institutional and residential buildings, roads and bridges, power plants and railway projects. In addition to infrastructure construction on engineering, procurement and construction (EPC) basis, JMC also took up four road projects on build, operate and transfer (BOT) toll basis, all of which were operational as on 31 March 2021. Kalpataru Power Transmission held 67.75% stake in JMC as on 30 June 2021.
On a consolidated basis, the company reported a net loss of Rs 10.15 crore in Q1 FY22 as against a net loss of Rs 52.21 crore in Q1 FY21. Net sales jumped 132.9% to Rs 1,160.82 crore in Q1 FY22 over Q1 FY21.
The scrip declined 0.67% to end at Rs 103.70 on the BSE on Thursday. The domestic equity bourses remained shut on Friday (10 September 2021) on account of Ganesh Chaturthi.
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