Original T emplate123

Rating Update
April 29, 2022 | Mumbai

P. Chandra Reddy and Co.

Update as on April 29, 2022

This update is provided in continuation of the rating rational below.

The key rating sensitivity factors for the rating include:

Upward factors

▪ A significant increase in the scale of operations while maintaining operating profitability at around
8%
▪ Improvement in liquidity

Downward factors

▪ A decrease in operating profitability to below 7%

▪ A stretch in the working capital cycle

CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing monitoring and
review. Accordingly, CRISIL Ratings seeks regular updates from companies on the business and financial
performance. CRISIL Ratings is, however, awaiting adequate information from P. Chandra Reddy and
Co. (PCR) which will enable us to carry out the rating review. CRISIL Ratings will continue provide
updates on relevant developments from time to time on this credit.

CRISIL Ratings also identifies information availability risk as a key credit factor in the rating assessment
as outlined in its criteria ‘Information Availability Risk in Credit Ratings’.

About the Company

Established in 2002 as a proprietorship firm, PCR was reconstituted as a partnership firm in 2005.
Operations are managed by Mr Chandra Reddy and his son, Mr Suresh Reddy. The firm undertakes
electrical contract works, such as installation of transmission towers, electrical lines, and cables in Andhra
Pradesh. It is based in Tirupati, Andhra Pradesh.
About CRISIL Ratings Limited (A subsidiary of CRISIL Limited)

CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical
rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments,
such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible
bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed
securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale
corporates and financial institutions. We have also instituted several innovations in India in the rating business,
including rating municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).

CRISIL Ratings Limited ("CRISIL Ratings") is a wholly-owned subsidiary of CRISIL Limited ("CRISIL"). CRISIL
Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India
("SEBI").

For more information, visit www.crisilratings.com

About CRISIL Limited

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are
India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks
and leading corporations.

CRISIL is majority owned by S&P Global Inc., a leading provider of transparent and independent ratings,
benchmarks, analytics and data to the capital and commodity markets worldwide

For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

CRISIL PRIVACY NOTICE

CRISIL respects your privacy. We may use your contact information, such as your name, address, and email id to fulfil your request and
service your account and to provide you with additional information from CRISIL.For further information on CRISIL’s privacy policy please
visit www.crisil.com.
DISCLAIMER

This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale (each a "Report") that is provided by CRISIL
Ratings Limited (hereinafter referred to as "CRISIL Ratings") . For the avoidance of doubt, the term "Report" includes the information, ratings and
other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of
services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL Ratings providing or intending to
provide any services in jurisdictions where CRISIL Ratings does not have the necessary licenses and/or registration to carry out its business
activities referred to above. Access or use of this Report does not create a client relationship between CRISIL Ratings and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report
we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not
intended to and does not constitute an investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any
investment in any securities, instruments, facilities or solicitation of any kind or otherwise enter into any deal or transaction with the entity to which
the Report pertains. The Report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation
(including the laws and regulations applicable in the US).

Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to
purchase, hold, or sell any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are
subject to change without notice, and are only current as of the stated date of their issue. CRISIL Ratings assumes no obligation to update its
opinions following publication in any form or format although CRISIL Ratings may disseminate its opinions and analysis. Rating by CRISIL
Ratings contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors
and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their
own professional advice before acting on the Report in any way. CRISIL Ratings or its associates may have other commercial transactions with
the company/entity.

Neither CRISIL Ratings nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively,
"CRISIL Ratings Parties") guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Ratings Party shall have any liability
for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report.
EACH CRISIL RATINGS' PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any
CRISIL Ratings Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential
damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with
any use of any part of the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the
instruments, facilities, securities or from obligors. CRISIL Rating's public ratings and analysis as are required to be disclosed under the
regulations of the Securities and Exchange Board of India (and other applicable regulations, if any) are made available on its web sites,
www.crisil.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee - more details
about ratings by CRISIL Ratings are available here: www.crisilratings.com.

CRISIL Ratings and its affiliates do not act as a fiduciary. While CRISIL Ratings has obtained information from sources it believes to be reliable,
CRISIL Ratings does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and /
or relies in its Reports. CRISIL Ratings has established policies and procedures to maintain the confidentiality of certain non-public information
received in connection with each analytical process. CRISIL Ratings has in place a ratings code of conduct and policies for analytical firewalls
and for managing conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public web site, www.crisil.com. For
latest rating information on any instrument of any company rated by CRISIL Ratings you may contact CRISIL RATING DESK at
CRISILratingdesk@crisil.com, or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL Ratings.

All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings Limited is a wholly owned subsidiary of CRISIL Limited.

CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1,
2011 to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating
symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on CRISIL Ratings' use of 'PP-MLD'
please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link:
www.crisil.com/ratings/credit-rating-scale.html
 Rating Rationale
April 27, 2021 | Mumbai

P. Chandra Reddy and Co.

Ratings reaffirmed at 'CRISIL BB / Stable / CRISIL A4+ '

Rating Action
Total Bank Loan Facilities Rated Rs.105 Crore
Long Term Rating CRISIL BB/Stable (Reaffirmed)
Short Term Rating CRISIL A4+ (Reaffirmed)
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale
CRISIL Ratings has reaffirmed its 'CRISIL BB/Stable/CRISIL A4+' ratings on the bank facilities of P. Chandra Reddy and Co.
(PCR).

The ratings continue to reflect the extensive experience of the partners in the electrical industry, a healthy order book, and a
comfortable financial risk profile. These strengths are partially offset by working capital-intensive operations, high customer
concentration in revenue and exposure to risks related to fragmentation and intense competition in the civil construction
industry.
Key Rating Drivers & Detailed Description
Strengths:
Extensive industry experience of the partners:
The promoters have been in the electrical contracting industry for the past two decades. Successful implementation of
projects with no significant time and cost overruns has enabled the firm to establish a healthy relationship with key
customers. Benefit from the partners’ extensive experience should continue.

Healthy order book:

Orders of Rs. 230 crore as on March 31, 2021, are to be executed over the next 12-18 months, providing revenue visibility
over the medium term.

Comfortable financial risk profile:

The networth is moderate, the capital structure comfortable, and debt protection metrics adequate.

The networth was Rs 34.7 crore as on March 31, 2020, and with moderate accretion to reserves, it is estimated at around
Rs 37 crore as on March 31, 2021. The gearing and total outside liabilities to tangible networth ratio expected to be at 0.41
time and 0.87 time, respectively, as on March 31, 2021. With no major debt-funded capital expenditure expected, the capital
structure should remain comfortable. Debt protection metrics expected to be adequate, with interest coverage and net cash
accrual to total debt ratios at 1.95 times and 22% times, respectively, for fiscal 2021.

Weaknesses:
Working-capital-intensive operations:
Gross current assets are estimated at around 170 days as on March 31, 2021. That’s mainly on account of high receivables,
estimated at around 130 days, which include retention money. The firm procures raw materials against cash or 60-90 days
letters of credit. Hence, the bank limit utilisation has been high. Operations ae likely to remain working capital intensive over
the medium term.
Customer concentration in revenue:
Most of the revenue (65-70%) is derived from government tendering authorities such as TSTranco. This exposes the firm to
customer concentration risk. However, it has bid for tenders for orders in north India, which may reduce concentration risk
gradually.

Exposure to risks related to fragmentation and intense competition in the civil construction industry:
As almost all the revenue is derived from tender based orders, it is dependent on successfully bidding for tenders in the
fragmented and intensely competitive civil construction industry.
Liquidity: Stretched
Due to working capital-intensive operations, bank limit utilisation remains high with average utilization of 95% during the 12
months through February 2021. Cash accrual is expected at Rs 5.5-6.0 crore, against repayment obligation of Rs 1.2-1.5
crore, per fiscal in fiscals 2022 and 2023. The current ratio was healthy at 1.76 times as on March 31, 2020 and expected to
remain at similar level over the medium term.
Outlook Stable
The firm should continue to benefit from the extensive industry experience of the partners and established track record.
Rating Sensitivity factors
Upward factors
A significant increase in the scale of operations while maintaining operating profitability at around 8%
Improvement in liquidity

Downward factors
A decrease in operating profitability to below 7%
A stretch in the working capital cycle
About the Company
Established in 2002 as a proprietorship firm, PCR was reconstituted as a partnership firm in 2005. Operations are managed
by Mr Chandra Reddy and his son, Mr Suresh Reddy. The firm undertakes electrical contract works, such as installation of
transmission towers, electrical lines, and cables in Andhra Pradesh. It is based in Tirupati, Andhra Pradesh.
Key Financial Indicators
As on / for the period ended March 31 2020 2019
Operating income Rs crore 106.3 164.4
Reported profit after tax (PAT) Rs crore 3.7 5.95
PAT margin % 3.6 3.6
Adjusted debt/adjusted networth Times 0.50 0.87
Interest coverage Times 2.03 2.79

Any other information: Not applicable

Note on complexity levels of the rated instrument:

CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available
on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they
consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name of instrument Date of Coupon Maturity Issue size Complexity Rating assigned
allotment rate date (Rs. cr.) levels with outlook
NA Secured overdraft facility NA NA NA 7.50 NA CRISIL BB/Stable
NA Bank Guarantee NA NA NA 80.00 NA CRISIL A4+
NA Inland/Import NA NA NA 17.50 NA CRISIL A4+
Letter of Credit

Annexure - Rating History for last 3 Years

Start of
Current 2021 (History) 2020 2019 2018
2018
Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount
Fund Based LT 7.5 CRISIL -- 31-01-20 CRISIL 18-09-19 CRISIL BB 29-06-18 CRISIL CRISIL
Facilities BB/Stable BB/Stable /Stable(Issuer BB/Stable BB/Stable
 Not
Cooperating)*
CRISIL
-- -- -- -- 29-03-18 CRISIL BB-/Stable
BB/Stable / CRISIL
A4+
Non-Fund CRISIL CRISIL CRISIL A4+ CRISIL CRISIL
Based ST 97.5 A4+ -- 31-01-20 A4+ 18-09-19 (Issuer Not 29-06-18 A4+ A4+
Facilities Cooperating)*

-- -- -- -- 29-03-18 CRISIL CRISIL

A4+ BB-/Stable
All amounts are in Rs.Cr.
* - Issuer did not cooperate; based on best-available information

Annexure - Details of various bank facilities

Current facilities Previous facilities
Amount Amount
Facility Rating Facility Rating
(Rs.Crore) (Rs.Crore)
Bank Guarantee 80 CRISIL A4+ Bank Guarantee 80 CRISIL A4+
Inland/Import Letter of Inland/Import Letter of
17.5 CRISIL A4+ 17.5 CRISIL A4+
Credit Credit
Secured Overdraft CRISIL Secured Overdraft CRISIL
7.5 7.5
Facility BB/Stable Facility BB/Stable
Total 105 - Total 105 -

Criteria Details

Links to related criteria

CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition

Media Relations Analytical Contacts Customer Service Helpdesk

Saman Khan Dinesh Jain Timings: 10.00 am to 7.00 pm
Media Relations Director Toll free Number:1800 267 1301
CRISIL Limited CRISIL Ratings Limited
D: +91 22 3342 3895 D:+91 44 6656 3115 For a copy of Rationales / Rating Reports:
B: +91 22 3342 3000 Dinesh.Jain@crisil.com CRISILratingdesk@crisil.com
saman.khan@crisil.com
Rajaraman Seetharaman For Analytical queries:
Naireen Ahmed Associate Director ratingsinvestordesk@crisil.com
Media Relations CRISIL Ratings Limited
CRISIL Limited B:+91 40 4032 8200
D: +91 22 3342 1818 Rajaraman.Seetharaman@crisil.com
B: +91 22 3342 3000
naireen.ahmed@crisil.com
Suresh Gundaboyana
Senior Rating Analyst
CRISIL Ratings Limited
B:+91 40 4032 8200
Suresh.Gundaboyana@crisil.com
Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may be
used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL Ratings. However, CRISIL Ratings alone has
the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc.

About CRISIL Ratings Limited

CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and
innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans,
certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual
bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured
debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted
several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and
infrastructure investment trusts (InvITs).

CRISIL Ratings Limited ("CRISIL Ratings") is a wholly-owned subsidiary of CRISIL Limited ("CRISIL"). CRISIL Ratings Limited is
registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").

For more information, visit www.crisil.com/ratings

About CRISIL Limited

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading
ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.

CRISIL is majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics
and data to the capital and commodity markets worldwide

For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

CRISIL PRIVACY NOTICE

CRISIL respects your privacy. We may use your contact information, such as your name, address, and email id to fulfil your request and service your
account and to provide you with additional information from CRISIL.For further information on CRISIL’s privacy policy please visit www.crisil.com.

DISCLAIMER

This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale (each a "Report") that is provided by CRISIL Ratings Limited
(hereinafter referred to as "CRISIL Ratings") . For the avoidance of doubt, the term "Report" includes the information, ratings and other content forming part of the
Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of services. Without limiting the generality of the foregoing,
nothing in the Report is to be construed as CRISIL Ratings providing or intending to provide any services in jurisdictions where CRISIL Ratings does not have the
necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this Report does not create a client relationship between
CRISIL Ratings and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken
into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an
investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of
any kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any
investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell
any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only
current as of the stated date of their issue. CRISIL Ratings assumes no obligation to update its opinions following publication in any form or format although CRISIL
Ratings may disseminate its opinions and analysis. Rating by CRISIL Ratings contained in the Report is not a substitute for the skill, judgment and experience of the
user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own
judgment and take their own professional advice before acting on the Report in any way. CRISIL Ratings or its associates may have other commercial transactions
with the company/entity.

Neither CRISIL Ratings nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, "CRISIL Ratings
Parties") guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Ratings Party shall have any liability for any errors, omissions, or
interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report. EACH CRISIL RATINGS' PARTY DISCLAIMS ANY
AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Ratings Party be liable to any party for any direct, indirect, incidental, exemplary,
compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and
opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities,
securities or from obligors. CRISIL Rating's public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of
India (and other applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional
information may be available for subscription at a fee - more details about ratings by CRISIL Ratings are available here: www.crisilratings.com.
CRISIL Ratings and its affiliates do not act as a fiduciary. While CRISIL Ratings has obtained information from sources it believes to be reliable, CRISIL Ratings does
not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL Ratings
has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL
Ratings has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to:
http://www.crisil.com/ratings/highlightedpolicy.html

Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public web site, www.crisil.com. For latest rating
information on any instrument of any company rated by CRISIL Ratings you may contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (0091) 1800
267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL Ratings.

All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings Limited is a wholly owned subsidiary of CRISIL Limited.

CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011 to comply with
the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be
construed as a change in the rating of the subject instrument. For details on CRISIL Ratiings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt
Instruments and Structured Finance Instruments at the following link: www.crisil.com/ratings/credit-rating-scale.html