Press Release

PMI Coaches Private Limited (Revised)

January 05, 2023

Ratings
Facilities/Instruments Amount (₹ crore) Rating1 Rating Action
Reaffirmed at CARE BB; Stable
(i) Long Term Bank Facilities - -
(Double B; Outlook: Stable) and withdrawn
CARE BB; ISSUER NOT Reaffirmed at CARE BB; Stable
COOPERATING* (Double B; Outlook: Stable) and migrated
(ii) Long Term Bank Facilities 4.00
(Double B; ISSUER NOT under ISSUER NOT
COOPERATING*) COOPERATING category
CARE BB; Stable/CARE A4
(iii) Long Term /Short Term Reaffirmed and Placed on Notice of
14.38 (Double B; Outlook: Stable/A
Bank Facilities withdrawal for 90 days
Four)
18.38
Total Bank Facilities (₹ Eighteen Crore and
Thirty eight lacs Only)
Details of instruments/facilities in Annexure-1.
*Issuer did not cooperate; Based on best available information

Detailed rationale and key rating drivers

CARE Ratings Ltd. has reaffirmed and withdrawn the outstanding ratings of ‘CARE BB; Stable’ [Double B; Outlook: Stable]
assigned to the long-term bank facilities from Kotak Mahindra Bank {at facility (i)} except for facility number (iii) of PMI
Coaches Private Limited with immediate effect. The above action has been taken at the request of PMI Coaches Private Limited
and ‘No Objection Certificate’ received from the banks that have extended the facilities rated by CARE Ratings Ltd.

Further, CARE Ratings Ltd. has been seeking information from PMI Coaches Private Limited to monitor the rating [for facility
(ii)] vide e-mail communications/letters dated December 08, 2022; December 09, 2022; December 21, 2022 and December 22,
2022 among others and numerous phone calls. However, despite our repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE Ratings Ltd. has reviewed the
rating on the basis of the best available information which however, in CARE Ratings Ltd.’s opinion is not sufficient to arrive at a
fair rating. Further, PMI Coaches Private Limited has not paid the surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on PMI Coaches Private Limited’s bank facilities will now be denoted as CARE BB; ISSUER NOT
COOPERATING*. Users of this rating (including investors, lenders and the public at large) are hence requested
to exercise caution while using the above rating.

CARE Ratings Ltd. has reaffirmed and placed the outstanding Rating assigned for long term/ short term bank facilities [at facility
(iii)] to PMI Coaches Private Limited on ‘Notice of Withdrawal’ with immediate effect. The aforesaid rating would continue to
remain on ‘Notice of Withdrawal’ for a period of 90 days, after which it would stand withdrawn.

Detailed description of the key rating drivers

At the time of last rating on November 12, 2021 the following were the rating strengths and weaknesses (updated from the
information available from the company):

Key Rating Weaknesses

Weak operational performance: Operational performance of the company remained weak marked by low profitability.
During FY22, the total operating income has grown to Rs. 120.81 Cr. in FY22 (PY Rs. 42.63 Cr) post lifting up of COVID-19
restrictions However, the PBILDT margin of the company stood at similar levels at 5.36% in FY22 Despite decline in the PBILDT
margin, the PAT margin of the company improve from 1.23% in FY21 to 1.69% in FY22 on account of lower interest expenses.
For 8MFY22 (refers to the period from April 01 to November 30), PMI reported total operating income of Rs.100.09 crore.
Concentrated revenue base: The revenue base of the company remained concentrated with top 5 customers contributing
75.74% (PY: 50.06%) of total sales in FY21. Further, the top customer Tata Motors Limited (CARE AA-; Stable/CARE A1+)
alone contributed 45.74% of the total sales in FY21. Further, high dependency on few customers weaken their negotiating
power and their ability to pass on raw material price increase which is evident from low PBILDT margin over the years.
Susceptibility to raw material price fluctuation risk: Raw material cost accounts for around 78%- 85% of total cost of
sales of PMI Coaches, and prices for major raw material such as GP sheets, HR sheets, pipes, etc. are volatile which exposes it

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Complete definition of the ratings assigned are available at www.careedge.in and other CARE Ratings Ltd.’s publications

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to price fluctuation risk. The company cannot fully pass on the volatility in raw material prices to the customer on timely basis
and hence therefore can affect the profit margins of the company.
Cyclical nature of the automotive industry: The automobile industry is highly cyclical in nature and automotive component
suppliers’ sales are directly linked to sales of auto OEMs. Furthermore, the auto-ancillary industry is highly competitive with the
presence of a large number of players in the organized as well as unorganized sector. While the organized segment majorly
caters to the OEM segment, the unorganized segment mainly caters to the replacement market and to tier II and III suppliers.

Key Rating Strengths

Healthy Order book Position: PMI had received an order to manufacture bus bodies of 900 buses for PMI Electro Mobility
Solutions Private Limited (PMIE) (subsidiary of PMI) which is equivalent to around Rs.144.00 crore. Out of this, PMI had already
supplied and raised invoice for 100 buses till August, 2021 with an unexecuted order book of Rs.128.00 crore as on August 31,
2021. The order is expected to be executed by end of FY22 (refers to the period from April 01 to March 31). The approval of
the prototype to supply 700 buses to Uttar Pradesh Government was received by the company in August, 2021.
Experienced promoters with long track record of operations: PMI Coaches Private Limited is promoted by Jain family.
Mr Satish Kumar Jain, Chairman and Managing Director, completed his bachelors and master’s in technology from Delhi College
of Engineering and has more than two decades of experience in manufacturing of Bus Bodies & Coaches. He is assisted by Mr.
Manik Jain, having 8 years of experience in fabrication industry who manages the day-to-day operations of the company.
Further, PMI has a track record of over thirty years with rich experience in body fabrication for hi-tech, luxury, Government,
educational institutions and caravans.
Moderate capital structure: The overall gearing of the company deteriorated to 1.36x (PY: 1.24x) as on March 31, 2022 on
account of infusion of unsecured loans from related parties which stood at Rs.11.02 crore (PY: Rs.6.76 crore) as on March 31,
2022. The debt profile of the company comprises of term loans to the tune of Rs.7.50 crore (33.27% of total debt), working
capital borrowings to the tune of Rs.4.02 crore (17.83% of total debt), and unsecured loans from related parties to the tune of
Rs.711.02 crore (48.80% of total debt) as on March 31, 2022. The unsecured loans are repayable on demand and are availed
at an interest rate of 9% per annum. Debt coverage indicators improved as reflected by PBILDT interest coverage and total
debt/GCA of 3.82x (PY: .162x) and 14.53x (PY: 24.15x) in FY22 respectively on account of growth in scale of operations.
Moderate operating cycle: The working capital cycle of the company shortened to 9 days (PY: 30 days) in FY22 primarily on
account of decrease in collection and inventory days to 44 days (PY: 176 days) and 103 days (PY: 208 days) respectively.

Liquidity: Adequate: The liquidity profile of PMI is adequate as reflected by average utilization of working capital borrowings
of around 80% for the trailing 12 months ended September, 2021. Further, the company is scheduled to repay Rs.1.47 crore in
FY23. The current ratio of the company remained below unity on account of higher proportion of GST payable and advances
from customers.

Analytical approach: Standalone

Applicable criteria
Policy in respect of Non-cooperation by issuer
Policy on default recognition
Financial Ratios – Nonfinancial Sector
Liquidity Analysis of Non-financial sector entities
Rating Outlook and Credit Watch
Short Term Instruments
Manufacturing Companies
Policy on Withdrawal of Ratings

About the company

PMI Coaches Private Limited is into the business of manufacturing coaches and body fabrication of buses and commercial
vehicles with installed production capacity of 300 units/ month. PMI Coaches has a track record with over thirty years with rich
experience in body fabrication for hi-tech, luxury, Government, educational institutions and caravans complying with the
statutory safety and regulatory norms. The company has a manufacturing plant in Dharuhera, Haryana spread over an area of
3,25,000 sq. ft., producing about 4,200 bus bodies per year and has been declared Category A manufacturing unit by
International Centre for Automotive Testing, Manesar
Brief Financials (₹ crore) March 31, 2021 (A) March 31, 2022 (A) 8MFY23 (UA)
Total operating income 42.63 120.81 100.09
PBILDT 2.44 6.48 NA
PAT 0.53 2.04 NA
Overall gearing (times) 1.24 1.36 NA
Interest coverage (times) 1.62 3.83 NA

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A: Audited UA: Unaudited; NA: Not Applicable

Status of non-cooperation with previous CRA: Brickwork vide P.R. dated December 02, 2022.
Any other information: Not Applicable
Rating history for the last three years: Please refer Annexure-2

Covenants of the rated instruments/facilities: Detailed explanation of covenants of the rated instruments/facilities is
given in Annexure-3

Complexity level of various instruments rated for this company: Annexure-4

Annexure-1: Details of instruments/facilities

Coupon Size of the
Name of the Date of Maturity Rating Assigned along
ISIN Rate Issue
Instrument Issuance Date with Rating Outlook
(%) (₹ crore)
Fund-based - LT-Bank Overdraft - - - 0.00 Withdrawn
Fund-based - LT-Cash Credit - - - 0.00 Withdrawn
Fund-based - LT-Term Loan - - Sep 2024 0.00 Withdrawn
CARE BB; Stable; ISSUER
Fund-based - LT-Term Loan - - Aug 2028 4.00
NOT COOPERATING*
Non-fund-based- LT/ST- Bank
- - - 14.38 CARE BB; Stable/CAREA4
Guarantees

Annexure-2: Rating history for the last three years

Current Ratings Rating History
Date(s) Date(s) Date(s) Date(s)
Name of the and and and and
Sr. Amount
Instrument/Bank Rating(s) Rating(s) Rating(s) Rating(s)
No. Type Outstanding Rating
Facilities assigned assigned assigned assigned
(₹ crore)
in 2022- in 2021- in 2020- in 2019-
2023 2022 2021 2020
CARE BB; 1)CARE 1)CARE
Fund-based - LT- Stable; ISSUER BB; Stable BB; Stable
1 LT 4.00 - -
Term Loan NOT (12-Nov- (28-Aug-
COOPERATING* 21) 20)
1)CARE 1)CARE
Fund-based - LT- BB; Stable BB; Stable
2 LT - - - -
Bank Overdraft (12-Nov- (28-Aug-
21) 20)
1)CARE 1)CARE
Fund-based - LT- BB; Stable BB; Stable
3 LT - - - -
Cash Credit (12-Nov- (28-Aug-
21) 20)
1)CARE 1)CARE
Fund-based - LT- BB; Stable BB; Stable
4 LT - - - -
Term Loan (12-Nov- (28-Aug-
21) 20)
1)CARE 1)CARE
Non-fund-based - BB; Stable BB; Stable
CARE BB; Stable
5 LT/ ST-Bank LT/ST* 14.38 - / CARE A4 / CARE A4 -
/ CARE A4
Guarantee (12-Nov- (28-Aug-
21) 20)
*Long term/Short term.

Annexure-3: Detailed explanation of the covenants of the rated instruments/facilities- Not Applicable

Annexure-4: Complexity level of various instruments rated for this company

Sr. No. Name of Instrument Complexity Level
1 Fund-based – LT-Bank Overdraft Simple
2 Fund-based – LT-Cash Credit Simple
3 Fund-based - LT-Term Loan Simple
4 Fund-based - LT-Term Loan Simple
5 Non-fund-based – LT/ST-Bank Guarantee Simple

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Annexure-5: Bank lender details for this company

To view the lender wise details of bank facilities please click here

Note on complexity levels of the rated instruments: CARE Ratings has classified instruments rated by it on the basis of
complexity. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any
clarifications.

Contact us
Media contact
Name: Mradul Mishra
Phone: +91-22-6754 3596
E-mail: [email protected]

Analyst contact
Name: Sachin Mathur
Phone: +91-11-4533 3206
E-mail: [email protected]

Relationship contact
Name: Swati Agrawal
Phone: +91-11-4533 3200
E-mail: [email protected]

About us:
Established in 1993, CARE Ratings is one of the leading credit rating agencies in India. Registered under the Securities and
Exchange Board of India, it has been acknowledged as an External Credit Assessment Institution by the RBI. With an equitable
position in the Indian capital market, CARE Ratings provides a wide array of credit rating services that help corporates raise
capital and enable investors to make informed decisions. With an established track record of rating companies over almost
three decades, CARE Ratings follows a robust and transparent rating process that leverages its domain and analytical expertise,
backed by the methodologies congruent with the international best practices. CARE Ratings has played a pivotal role in
developing bank debt and capital market instruments, including commercial papers, corporate bonds and debentures, and
structured credit.

Disclaimer:
The ratings issued by CARE Ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not recommendations to
sanction, renew, disburse, or recall the concerned bank facilities or to buy, sell, or hold any security. These ratings do not convey suitability or price for the investor.
The agency does not constitute an audit on the rated entity. CARE Ratings has based its ratings/outlook based on information obtained from reliable and credible
sources. CARE Ratings does not, however, guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions
and the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE Ratings have paid a credit rating fee,
based on the amount and type of bank facilities/instruments. CARE Ratings or its subsidiaries/associates may also be involved with other commercial transactions
with the entity. In case of partnership/proprietary concerns, the rating/outlook assigned by CARE Ratings is, inter-alia, based on the capital deployed by the
partners/proprietors and the current financial strength of the firm. The ratings/outlook may change in case of withdrawal of capital, or the unsecured loans brought
in by the partners/proprietors in addition to the financial performance and other relevant factors. CARE Ratings is not responsible for any errors and states that it
has no financial liability whatsoever to the users of the ratings of CARE Ratings. The ratings of CARE Ratings do not factor in any rating-related trigger clauses as
per the terms of the facilities/instruments, which may involve acceleration of payments in case of rating downgrades. However, if any such clauses are introduced
and triggered, the ratings may see volatility and sharp downgrades.

For the detailed Rationale Report and subscription information, please visit www.careedge.in

4 CARE Ratings Ltd.