Acuité has downgraded the long-term rating to 'Acuité C' (read as Acuité C) from 'Acuité BBB' (read as Acuité triple B) and the short-term rating to 'Acuité A4' (read as Acuité A four) from 'Acuité A3+' (read as Acuité A three plus) on the Rs. 4349.50 Cr. bank facilities of ITI Limited (ITIL).
Further, Acuité has downgraded the long term rating to 'Acuité D' (read as Acuité D) from 'Acuité BBB' (read as Acuité triple B) on the Rs. 120 Cr. bank facilities of ITIL.
The downgrade reflects ITIL's delays in timely servicing of one of its term loan facilities of Canara Bank of Rs. 120 Cr. There have been delays during the month of October 2023 in servicing the debt obligations of Rs. 10 Cr. as per the intimation received by the company owing to delays in project realization from its clients leading to poor liquidity position. Further, there have been instances of delays in servicing the Interest amount for the Cash Credit facilities as well, however the same have been paid within 30 days.
The poor liquidity is marked by deteriorated operating performance of ITIL reflected in its deteriorated scale of operations, and negative EBITDA margins during FY2023 & H1FY2024. The revenues stood at Rs. 1448 Cr. in FY2023 (~31% lower) against Rs. 2081 Cr in FY2022. The revenues have been suppressed due to delays in getting PoC and technical clearances from the government authorities, along with delay in getting RoW permission from PWD. Further, due to lower turnover, the company could not achieve the required margins to meet its fixed costs turning its EBITDA negative affecting the company's coverage indicators adversely. However, the company has reported improvement in its revenue from operations during Q2FY2024 which stood at Rs. 246.47 Cr. against 157.04 Cr. during Q1FY2024 while Rs. 403.51 Cr. in H1FY2024 against Rs. 363.83 Cr. during corresponding H1FY2023.
The company is expecting realization to the tune of Rs. 80 Cr. from its ASCON Project by December 10th 2023, through which it would pay off all its current outstanding and immediate future obligations. Further, company is expecting net project realizations to the tune of Rs. 540 Cr. by March 2024.
However timely collection of the receivables and regularization of the debt along with timely repayment of the future debt obligations will remain key monitorable.
Shares of ITI Limited was last trading in BSE at Rs. 272.05 as compared to the previous close of Rs. 274.55. The total number of shares traded during the day was 77366 in over 1226 trades.
The stock hit an intraday high of Rs. 276.95 and intraday low of 270.10. The net turnover during the day was Rs. 21214739.00.