M K Roy & Bros Projects Private Limited: Instrument Amount Rating Action

M K Roy & Bros Projects Private Limited
Instrument Amount Rating Action

Fund Based Limit – Cash Credit Rs. 5.15 crore [ICRA]B+ assigned
Non-Fund Based Limit – Bank Guarantee Rs. 4.50 crore [ICRA]B+ / [ICRA]A4
assigned
Unallocated Amount Rs. 0.35 crore [ICRA]B+ / [ICRA]A4
assigned
ICRA has assigned a long-term rating of [ICRA]B+ (pronounced ICRA B plus) to the Rs. 5.15 crore1 cash
credit, Rs. 4.50 crore non-fund based bank facility, and Rs. 0.35 crore unallocated limit of M K Roy & Bros
Projects Private Limited (MKRPL / the company) 2. ICRA has also assigned a short-term rating of [ICRA]A4
(pronounced ICRA A four) to the above mentioned non-fund based bank facility and unallocated limit of the
company, which have been rated both on long-term and short-term scales.
The ratings assigned take into account MKRPL’s small scale of current operations vis-a-vis the large
established players in the industry, notwithstanding a significant revenue growth achieved in FY2016, and the
competitive nature of the industry, with the lowest bid (L-1)-based contract awarding system followed by the
customers, which keeps profitability under check. The company’s long receivable cycle and significant amount
of bank guarantee provided to customers reduce its financial flexibility, as reflected by the frequent full
utilisation of the working capital limit. Though the high creditor-funding availed by the company eases MKRPL’s
liquidity to an extent, it results in high TOL/TNW. The company has limited bargaining power against its larger
and stronger customers, and also remains exposed to significant customer concentration risks, with the top
three customers accounting for around 94% of the total revenue clocked during FY2016. ICRA also notes that
the company is in the process of providing funding support to a subsidiary, which is exposed to the project risks
associated with a significant capex planned in the near to medium term. Any significant support extended to its
subsidiary, in turn, is likely to have an adverse bearing on MKRPL’s credit profile.
The ratings, however, factor in the long experience of the promoters in the fabrication and erection of petroleum
product storage facilities, and MKRPL’s established customer base, which includes large public sector
undertakings (PSUs), thereby reducing counterparty risks. ICRA also takes note of the company’s comfortable
order-book position rendering revenue visibility in the near term.
Going forward, the company’s ability to augment its scale of business, while improving profitability and keeping
its receivables under control, would remain key rating sensitivities.
Company Profile
A proprietorship firm in the name of M K Roy & Bros was established by Mr. M. K. Roy in 1983. In 1994, the
entity was converted into a partnership firm and subsequently in 2000, it was converted into a private limited
company and the name changed to M K Roy & Bros Projects Private Limited (MKRPL). The company is
primarily involved in the fabrication and erection of high pressure steel tanks and pipelines used for the storage
and distribution of petroleum products, mainly petrol and diesel.
Recent Results
The company reported a profit before tax of Rs. 2.75 crore (provisional) on an operating income of Rs. 45.59
crore (provisional) during FY2016. In FY2015, the company posted a net profit of Rs. 1.49 crore on an
operating income of Rs. 34.56 crore.
May 2016
1
100 lakh = 1 crore = 10 million
2
For complete rating scale and definitions please refer to ICRA’s website (www.icra.in) or other ICRA Rating
Publications
For further details please contact:
Analyst Contacts:
Mr. Jayanta Roy, (Tel. No. +91-33-22876617 / 22800008)
jayanta@icraindia.com
Relationship Contacts:
Mr. Jayanta Chatterjee (Tel. No. +91 33 7150 1100)
jayantac@icraindia.com
© Copyright, 2016, ICRA Limited. All Rights Reserved

Contents may be used freely with due acknowledgement to ICRA
ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are
subject to a process of surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s
current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the
instrument rated. Please visit our website www.icra.in or contact any ICRA office for the latest information on ICRA ratings
outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and
reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information
provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is
provided ‘as is’ without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or
implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may
have provided services other than rating to the issuer rated. All information contained herein must be construed solely as
statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its
contents.
Registered Office
ICRA Limited
1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi 110001
Tel: +91-11-23357940-50, Fax: +91-11-23357014
Corporate Office
Mr. Vivek Mathur
Mobile: +91 9871221122
Email: vivek@icraindia.com
Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002
Ph: +91-124-4545310 (D), 4545300 / 4545800 (B) Fax; +91- 124-4050424
Mumbai Kolkata
Mr. L. Shivakumar Mr. Jayanta Roy
Mobile: +91 9821086490 Mobile: +91 9903394664
Email: shivakumar@icraindia.com Email: jayanta@icraindia.com
3rd Floor, Electric Mansion A-10 & 11, 3rd Floor, FMC Fortuna
Appasaheb Marathe Marg, Prabhadevi 234/3A, A.J.C. Bose Road
Mumbai—400025, Kolkata—700020
Board : +91-22-61796300; Fax: +91-22-24331390 Tel +91-33-22876617/8839 22800008/22831411,
Fax +91-33-22870728
Chennai Bangalore
Mr. Jayanta Chatterjee Bangalore
Mobile: +91 9845022459 Mr. Jayanta Chatterjee
Email: jayantac@icraindia.com Mobile: +91 9845022459
Email: jayantac@icraindia.com
5th Floor, Karumuttu Centre
634 Anna Salai, Nandanam 'The Millenia'
Chennai—600035 Tower B, Unit No. 1004,10th Floor, Level 2 12-14, 1 & 2,
Tel: +91-44-45964300; Fax: +91-44 24343663 Murphy Road, Bangalore 560 008
Tel: +91-80-43326400; Fax: +91-80-43326409
Ahmedabad Pune
Mr. L. Shivakumar Mr. L. Shivakumar
Mobile: +91 9821086490 Mobile: +91 9821086490
Email: shivakumar@icraindia.com Email: shivakumar@icraindia.com
907 & 908 Sakar -II, Ellisbridge, 5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range
Ahmedabad- 380006 Hills Road, Shivajinagar,Pune-411 020
Tel: +91-79-26585049, 26585494, 26584924; Fax: Tel: + 91-20-25561194-25560196; Fax: +91-20-
+91-79-25569231 25561231
Hyderabad
Mr. Jayanta Chatterjee
Mobile: +91 9845022459
Email: jayantac@icraindia.com
4th Floor, Shobhan, 6-3-927/A&B. Somajiguda, Raj

Bhavan Road, Hyderabad—500083
Tel:- +91-40-40676500

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