Ketan Construction Limited
KETAN CONSTRUCTION LIMITED
Short-term bank loans / facilities Long-term bank loans / facilities PR 3 CARE BBB
Ratings CARE has assigned ‘CARE BBB’ (Triple B) rating to long-term bank facilities and PR3 (PR Three) rating to short-term bank facilities of Ketan Construction Limited (KCL) for an aggregate amount of Rs.174.81 crore, including outstanding working capital demand loan as on May 15, 2009 of Rs.11.81 crore, sanctioned fund based working capital limits of Rs.23.00 crore and sanctioned non fund based working capital limits of Rs.140 crore. Facilities with ‘CARE BBB’ rating are considered to offer moderate safety for timely servicing of debt obligations. Such facilities carry moderate credit risk. Facilities with ‘PR3’ rating would have moderate capacity for timely payment of short-term debt obligations and carry higher credit risk as compared to instruments rated higher. Ratings take into account established track record of KCL in the construction sector with good presence in irrigation segment, presence of price escalation clause in majority of projects in order book which protect margins to a certain extent and good order book position with sector & geographical diversity. Ratings are constrained by delay in execution of some of projects resulting in low efficiency & modest growth in revenue, moderate financial risk profile and fragmented nature of industry with many players competing for infrastructure and urban development projects. Improvement in efficiency and coverage ratios with timely execution of orders are the key rating sensitivity. Maintaining current financial flexibility and growth in income would also be crucial. Background Founded in 1981& incorporated in 1999, KCL is a closely held public limited company promoted by Barad family. Shri Vijay Barad (Chairman& Managing Director) and
Shri Ramesh Barad (Joint Managing Director) have wide experience in the construction industry. Board of directors is also supported by team of experienced
Short-term bank loans / facilities Long-term bank loans / facilities PR 3 CARE BBB
Ratings CARE has assigned ‘CARE BBB’ (Triple B) rating to long-term bank facilities and PR3 (PR Three) rating to short-term bank facilities of Ketan Construction Limited (KCL) for an aggregate amount of Rs.174.81 crore, including outstanding working capital demand loan as on May 15, 2009 of Rs.11.81 crore, sanctioned fund based working capital limits of Rs.23.00 crore and sanctioned non fund based working capital limits of Rs.140 crore. Facilities with ‘CARE BBB’ rating are considered to offer moderate safety for timely servicing of debt obligations. Such facilities carry moderate credit risk. Facilities with ‘PR3’ rating would have moderate capacity for timely payment of short-term debt obligations and carry higher credit risk as compared to instruments rated higher. Ratings take into account established track record of KCL in the construction sector with good presence in irrigation segment, presence of price escalation clause in majority of projects in order book which protect margins to a certain extent and good order book position with sector & geographical diversity. Ratings are constrained by delay in execution of some of projects resulting in low efficiency & modest growth in revenue, moderate financial risk profile and fragmented nature of industry with many players competing for infrastructure and urban development projects. Improvement in efficiency and coverage ratios with timely execution of orders are the key rating sensitivity. Maintaining current financial flexibility and growth in income would also be crucial. Background Founded in 1981& incorporated in 1999, KCL is a closely held public limited company promoted by Barad family. Shri Vijay Barad (Chairman& Managing Director) and
Shri Ramesh Barad (Joint Managing Director) have wide experience in the construction industry. Board of directors is also supported by team of experienced