Navkar Global Infra

December 31, 2024

Ratings
Sl. Instrument/ Amount Current Ratings Previous Ratings Rating Complexity
No. Facility Action Indicator
(Rs. Crore)

1. Long Term Bank 116.56 IVR BBB-/Stable IVR BBB-/Stable Reaffirmed Simple
Facilities
(IVR Triple B (IVR Triple B
Minus with Stable Minus with Stable
Outlook) Outlook)

2. Short Term Bank 33.44 IVR A3 IVR A3 Reaffirmed Simple

Facilities
(IVR A Three) (IVR A Three)

Total 150.00 (Rupees One Hundred Fifty Crore Only)

Details of Facilities/Instruments are in Annexure 1. Facility wise lender details are at

Annexure 2. Detailed explanation of covenants is at Annexure 3.

Detailed Rationale
Infomerics Ratings has reaffirmed the long-term rating at IVR BBB- with a Stable outlook and
short-term rating at IVR A3 to the bank loan facilities of Navkar Global Infra (NGI).

The rating assigned to NGI continues to derive comfort from experienced partners, improving
scale of operations and healthy order book position, besides comfortable debt protection
metrics. However, these rating strengths remain constrained by partnership constitution of the
firm, order execution risk and presence of the firm in highly competitive industry.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. IVR
believes that the firm’s business & financials risk profile will be maintained over the medium
term. The firm has a healthy order book which provides revenue visibility in the short to
medium term.

IVR has principally relied on the standalone audited financial results of Navkar Global Infra up
to FY24 (refers to period April 1st, 2023, to March 31st, 2024) and three years projected

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financials for FY2025 (refers to period April 1st, 2024, to March 31st, 2025) - FY2027 (refers
to period April 1st, 2026, to March 31st, 2027), along with publicly available information/
clarifications provided by the firm’s management.

Key Rating Sensitivities:

Upward Factors
- Consistent increase in scale of operations as projected and maintaining the profitability
& debt protection metrics at comfortable level.
- Improvement in the capital structure as marked by overall gearing remaining below
2.00x on a sustained basis.
Downward Factors
- Moderation in the scale of operations led by moderation in order book and/or
profitability impacting the liquidity profile of the firm.
- Deterioration in profitability margins and cash accruals of the firm leading to
stretched liquidity.

List of Key Rating Drivers with Detailed Description

Key Rating Strengths

Experienced partners:

Navkar Global Infra currently has three partners viz. Nitin Chandna, Vandana Chandna and
EcoVision Infrastructure Pvt. Ltd and it is also led by Sachin Jain, Anil Sharma, and
Dharmendra Sadh, who collectively manages the overall operations of the business. With over
a decade of experience in trading of construction materials, providing transportation services,
and engagement in construction projects, the partners have built strong relationships with both
customers and suppliers.

Improved scale of operations and good order book position:

The firm’s total operating income (TOI) has increased from Rs. 291.49 crore in FY23 to Rs.
475.76 crore in FY24 on the back of a large number of transportation orders executed for
National Thermal Power Corporation Limited (NTPC Limited) during the year. The firm has
registered gross sales of ~Rs 144 crore till July 2024 and currently it has total unexecuted

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orders of ~Rs 700 crore which provides the revenue visibility in short to medium term. Firm’s
business risk profile continues to be supported by healthy association developed with various
reputed companies like NTPC Limited, Tata Projects Limited etc.

Comfortable debt protection metrics:

The debt protection metrics of the firm is at comfortable level, indicated by comfortable interest
service coverage ratio (ISCR) of 3.90x in FY24 (PY: 3.64x) & debt service coverage ratio
(DSCR) of 1.31x in FY24 (PY: 2.33x). Total debt/EBITDA ratio is moderate at 4.45x in FY24
(PY: 3.37x).

Key Rating Weaknesses

Inherent risk on account of being a partnership firm:

Being a partnership firm, it is exposed to inherent risk of the partner’s capital being withdrawn
at a time of personal exigency, besides risk of dissolution and restricted avenues to raise
capital, which could be one of the deterrent to the firm’s growth.

Orders execution & customer concentration risk:

Given the nature of projects awarded mainly through government entity, the firm is exposed
to inherent risk in terms of delays in execution of certain orders which may arise due to
arranging infrastructure and sanction of working capital limits for the completion of orders,
resulting in a delay in the realization of revenue growth. In addition to that the firm has low
capital base as compared to the size of the order book. Firm is also exposed to customer
concentration risk as ~90% of its revenue is generated from NTPC Limited and Tata Projects
Limited. However, the risk is mitigated to an extent as both the companies are well known and
reputed. Also, firm has established good business relation over the years reflected in regular
orders being received by the firm.

Presence in a competitive industry:

NGI faces direct competition from various organized and unorganized players in the market.
There are a number of small and regional players catering to the same market which has
limited the bargaining power of the firm and has exerted pressure on its margins. Further, the
firm majorly undertakes projects which are awarded through the tender based system. This

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exposes the firm towards risk associated with the tender-based business, which is
characterized by intense competition. The growth of the business depends on its ability to
successfully bid for the tenders and emerge as the lowest bidder. Apart from this, any changes
in the government policy or government spending on projects are likely to affect the revenues
and profits of the firm.

Analytical Approach: Standalone

Applicable Criteria:
Rating Methodology for Trading Companies.
Rating Methodology for Service Sector Companies.
Financial Ratios & Interpretation (Non-Financial Sector).
Criteria on assigning rating outlook
Policy on Default Recognition and Post-Default Curing Period
Complexity Level of Rated Instruments/Facilities

Liquidity – Adequate
The liquidity of the firm remains adequate marked by satisfactory cash accrual of Rs 25.91
crore with current repayment obligations of Rs ~17 crore. Going forward its expected cash
generation is ~Rs 29-33 crore during FY25-27 against the scheduled repayment of ~Rs 9-12
crore. The firm has current ratio of 1.04x and cash & cash equivalent of ~Rs. 0.35 crore as of
November 2024. The average working capital utilisation of the firm remained moderate at
~82% during the past 12 months ended November 2024. Going forward, in case of substantial
increase in scale of operations, enhancement in bank lines remains critical to efficiently
manage liquidity.

About the Company

Navkar Global Infra (NGI) is a partnership firm established on January 29, 2018. The firm is
based in Gurgaon, and it is primarily engaged in providing transportation services, majorly to
NTPC Ltd, all over India and trading of construction materials such as aggregates, dust, sand,
ballast, flyers. The firm is currently managed by EcoVision Infrastructure Private Limited, Mr.
Nitin Chandna and Ms Vandana Chandna sharing profit and losses in the ratio of 99%, 0.50%
& 0.50% respectively. Currently, the firm owns a total of ~82 trucks and based on requirements
it hires from local service operators.

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 Financials (Standalone):
(Rs. crore)
For the year ended/ As on* 31-03-2023 31-03-2024
Audited Audited
Total Operating Income 291.49 475.76
EBITDA 29.62 33.67
PAT 8.16 15.29
Total Debt 99.77 149.73
Tangible Net Worth 22.35 30.49
EBITDA Margin (%) 10.16 7.08
PAT Margin (%) 2.80 3.21
Overall Gearing Ratio (x) 4.46 4.91
Interest Coverage (x) 3.64 3.90
* Classification as per Infomerics’ standards.

Status of non-cooperation with previous CRA: None

Any other information: Nil

Rating History for last three years:
Current Ratings Rating History for the past 3 years
(Year 2024-25)
Name of Date(s) & Date(s) & Date(s) &
Sr.
Instrument/ Amount Rating(s) Rating(s) Rating(s)
No.
Facilities Type outstanding Rating assigned in assigned in assigned
(Rs. Crore) 2023-24 2022-23 in 2021-
2022
Long Term IVR BBB-/
Bank Long IVR BBB-/ Stable
1. 116.56 - -
Facility – Term Stable (October 25,
Fund Based 2023)
Short Term
Bank IVR A3
Short
2. Facility- 33.44 IVR A3 (October 25, - -
Term
Non Fund 2023)
Based

Analytical Contacts:
Name: Vipin Jindal
Tel: (011) 45579024
Email: [email protected]

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About Infomerics:
Infomerics Valuation and Rating Private Ltd (Infomerics) was founded in the year 1986 by a
team of highly experienced finance professionals for research and risk evaluation. Infomerics
commenced its activities as External Credit Assessment Institution after obtaining registration
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Disclaimer: Infomerics ratings are based on information provided by the issuer on an ‘as is where is’ basis.
Infomerics credit ratings are an opinion on the credit risk of the issue / issuer and not a recommendation to buy,
hold or sell securities. Infomerics reserves the right to change or withdraw the credit ratings at any point in time.
Infomerics ratings are opinions on financial statements based on information provided by the management and
information obtained from sources believed by it to be accurate and reliable. The credit quality ratings are not
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any errors or omissions or for the results obtained from the use of such information. Most entities whose bank
facilities/instruments are rated by us have paid a credit rating fee, based on the amount and type of bank
facilities/instruments. In case of partnership/proprietary concerns/Association of Persons (AOPs), the rating
assigned by Infomerics is based on the capital deployed by the partners/proprietor/ AOPs and the financial strength
of the firm at present. The rating may undergo change in case of withdrawal of capital or the unsecured loans
brought in by the partners/proprietor/ AOPs in addition to the financial performance and other relevant factors.

Annexure 1: Instrument/Facility Details

Name of ISIN Date of Coupon Maturity Date Size of Rating
Facility/ Issuance Rate/ Facility Assigned/
/Security IRR (Rs. Outlook
Crore)
- - - January 2025 0.96 IVR BBB-
Term Loan /Stable

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 - - - March 2027 4.59 IVR BBB-
GECL /Stable
- - - July 2025 39.01 IVR BBB-
WCDL /Stable
- - - - 35.00 IVR BBB-
Cash Credit /Stable

Dropline - - - - 37.00 IVR BBB-

Overdraft /Stable
Proposed - - - - 28.44 IVR A3
Bank
Facilities –
Bank
Guarantee
Bank - - - - 5.00 IVR A3
Guarantee

Annexure 2: Facility wise lender details:

https://www.infomerics.com/admin/prfiles/Len-Navkar-Global-31dec24.pdf
Annexure 3: Detailed explanation of covenants of the rated Security/facilities: Not
Applicable
Annexure 4: List of companies considered for consolidated/Combined analysis: Not
applicable

Note on complexity levels of the rated instrument: Infomerics has classified instruments
rated by it on the basis of complexity and a note thereon is available at www.infomerics.com.