Press Release

Crab And Taur Engineers Private Limited

August 16, 2022
Ratings
Amount
Facilities/Instruments Rating1 Rating Action
(₹ crore)
Reaffirmed at CARE BB-; Stable
Long Term Bank Facilities - -
(Double B Minus; Outlook: Stable) and Withdrawn
Reaffirmed at CARE A4
Short Term Bank Facilities - -
(A Four) and Withdrawn
0.00
Total Bank Facilities
(₹ Only)
Details of instruments/facilities in Annexure-1.

Detailed rationale and key rating drivers

CARE has withdrawn the outstanding ratings assigned to the bank facilities of Crab and Taur Engineers Private Limited (CTEPL)
with immediate effect. The above action has been taken at the request of CTEPL and ‘No Objection Certificate’ received from
the bank that have extended the facility rated by CARE.

Rating sensitivities
Detailed description of the key rating drivers
Key rating weaknesses
Small scale of operations with fluctuating revenues and moderate profit margins
CTEPL witnessed sharp improvement in revenue during FY22 on account of increase in demand for the product post Covid-19.
Total operating income stood at Rs.15.16 crore in FY22 as against Rs. 9.73 in FY21. The limited value-added nature of business
has kept the margins of the company within moderate range during last three years ended FY21 with PBILDT and PAT margin
between 2.53-5.92% and 0.99-2.68% respectively. The PBILDT margin deteriorated in FY22 marginally from 5.86% in FY21 to
4.17% in FY22 owing to increase in price of traded goods. PAT margin declined from 2.68% in FY21 to 1.30% in FY22 owing to
high interest cost.

Moderate debt coverage indicators

Interest coverage ratio and Total debt to gross cash accrual has declined to 1.44x and 8.75x in FY22 as compared to 9.73x and
1.67x respectively in FY21 due to higher utilization of working capital limit as on balance sheet date and low profitability during
the same period.

Highly fragmented and competitive nature of the industry

The Indian Pumps and Valves industry’s structure is characterized by a high level of market fragmentation with the presence of
few large players — both Indian and multinational companies (MNCs) — and many SME players. Some domestic SMEs have
entered foreign markets such as Egypt, the US, West Asia, Greece, and Italy, while MNCs have either entered into joint
ventures or made direct investments in the Indian market. Being in the trading and assembly of the pumps/valves, CTEPL has a
low bargaining power vis-à-vis their clients and principal supplier.

Concentrated revenue streams with exposure to slowdown in end user industries

The work undertaken by CTEPL is project based and pertains to the assembly of pumps and valves for a specific purpose. The
company also undertakes turnkey execution of projects as per client’s specifications. The demand for the company’s product
depends on the new capex undertaken by various end user industries.

Key Rating Strengths

Long and established track record of the company with experienced promoters
The promoter and managing director of CTEPL, Mr. Yogesh Joshi (B.E Mechanical) has extensive experience of over two
decades in the trading and assembly of Pumps and Valves. The promoter has presence in the industry through two group
entities viz. Crab & Taur Pte Limited, Singapore (established in 2012; engaged in similar business line) and Crab & Taur
(operations have been shifted to CTEPL). Further, functional heads have adequate expertise in their respective fields. Extensive
experience of the promoters has helped the firm to carry out it’s operations smoothly.

Comfortable capital structure

The capital structure declined but remained comfortable marked by debt equity and overall gearing ratios both at 0.00x and
0.65x, respectively, as on March 31, 2022(Provisional) as compared to 0.00x and 0.15x, respectively, as on March 31, 2021 on
account higher utilization of working capital loan as on balance sheet date.

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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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Long standing association with Principal and established clientele

CTEPL signs a three-year dealership agreement with Flowserve and CTEPL has been a dealer of Flowserve for 20 years (since
its inception as a proprietary concern). Over its long track record of operations, the company has maintained good relations
with established client base reflecting repeat orders from existing customers.

Liquidity: Stretched
Liquidity is stretched marked by tightly matched accruals to cover its interest obligations for the year FY22. Company has cash
and bank balances Rs.1.71 crore as on March 31, 2022 vis-à-vis Rs.2.00 crore as on March 31, 2021. Further, the current ratio
and quick ratio stood moderate at 1.11x and 0.84x respectively as on March 31, 2022 (vis-à-vis 1.34 times and 0.99 times
respectively as on March 31, 2021). The cash flow from operations was negative in FY22 (vis-à-vis positive at Rs.3.78 crore in
FY21).

Analytical approach: Standalone

Applicable criteria
Policy on Withdrawal of ratings
Criteria on assigning Outlook to Credit Rating
Criteria for Short Term Instruments
CARE’s default recognition policy
Financial ratios - Non Financial Sector
Rating Methodology – Wholesale Companies
Liquidity Analysis of Non-Financial Sector Entities

About the company

Crab & Taur Engineers Private Limited (CTEPL) was established in November 1997 but commenced operations in August 2013,
after having taken over operations of Crab & Taur (proprietorship concern). CTEPL is promoted by Mr. Yogesh Joshi. The
company is primarily involved in the assembly and trading of the range of products manufactured by Flowserve. The product
profile comprises of Pumps and Valves that find utility in diversified end user industries such as oil & gas industry, water utility,
chemical, power, food processing, auto, pharmaceuticals, steel, engineering etc. CTEPL also offers installation and after sales
services for products as per the client requirement.

Brief Financials (₹ crore) FY21 (A) FY22 (Prov.) Q1FY23(Prov.)

Total operating income 9.73 15.16 NA

PBILDT 0.57 0.63 NA
PAT 0.26 0.20 NA
Overall gearing (times) 0.15 0.65 NA
Interest coverage (times) 9.73 1.44 NA
A: Audited; NA: Not Available; Prov.: Provisional

Status of non-cooperation with previous CRA: Not Applicable

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

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Annexure-1: Details of instruments/facilities

Size of the
Name of the Date of Coupon Maturity Rating Assigned along with
ISIN Issue
Instrument Issuance Rate Date Rating Outlook
(₹ crore)

Fund-based - LT-Cash
- - - 0.00 Withdrawn
Credit

Non-fund-based - ST-Bank
- - - 0.00 Withdrawn
Guarantee

Non-fund-based - ST-
- - - 0.00 Withdrawn
Letter of credit

Annexure-2: Rating history for the last three years

Current Ratings Rating History
Name of the Date(s) Date(s) Date(s) Date(s)
Sr.
Instrument/Bank Amount and and and and
No.
Facilities Type Outstanding Rating Rating(s) Rating(s) Rating(s) Rating(s)
(₹ crore) assigned in assigned in assigned in assigned in
2022-2023 2021-2022 2020-2021 2019-2020
1)CARE BB-; 1)CARE BB-; 1)CARE BB-;
Fund-based - LT-
1 LT - - - Stable Stable Stable
Cash Credit
(05-Oct-21) (20-Nov-20) (11-Nov-19)
Non-fund-based - 1)CARE A4 1)CARE A4 1)CARE A4
2 ST - - -
ST-Bank Guarantee (05-Oct-21) (20-Nov-20) (11-Nov-19)
Non-fund-based - 1)CARE A4 1)CARE A4 1)CARE A4
3 ST - - -
ST-Letter of credit (05-Oct-21) (20-Nov-20) (11-Nov-19)
*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-Cash Credit Simple

2 Non-fund-based - ST-Bank Guarantee Simple

3 Non-fund-based - ST-Letter of credit Simple

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 care@careedge.in for any
clarifications.

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 Press Release

Contact us
Media contact
Name: Mradul Mishra
Phone: +91-22-6754 3596
E-mail: mradul.mishra@careedge.in

Analyst contact
Name: Ruchi Sanghavi
Phone: 9820921375
E-mail: ruchi.shroff@careedge.in

Relationship contact
Name: Aakash Jain
Phone: +91-20-4000 9090
E-mail: aakash.jain@careedge.in

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.

4 CARE Ratings Ltd.