CRISIL reaffirms rating of Navkar Corporation Limited

CRISIL Ratings has reaffirmed its 'CRISIL A/Positive' rating and to the bank facilities of Navkar Corporation Limited (NCL). CRISIL Ratings has also assigned its 'CRISIL A1' rating to the short term bank facilities.

The rating reflects the expected improvement in NCL's business risk profile increasing scale and diversifying revenues while gradual expansion in operating profitability. Revenues have grown year-on-year at a CAGR of 17% over the past four years through fiscal 2021 and is expected to reach close to Rs.900 crore in FY22. Improving capacity utilisation, healthy demand and strong growth in private freight terminal (PFT) domestic operations will continue to drive the topline growth over the medium term. While integrated PFTs at CFS (Panvel, Maharashtra) and ICD Tumb (Valsad, Gujarat) are allowing NCL to offer cost effective and end to end services to customers, it is further leveraging the existing railway infrastructure for growing its domestic transportation business which is expected to have a positive bearing on its overall operating profitability.

CRISIL Ratings had assigned its 'CRISIL A/Positive' rating to the bank facilities of NCL on April 07, 2022.

NCL is further expanding its capacity with the ongoing capex for inland container depot (ICD) at Manaba, Near Morbi, Gujarat that will offer connectivity with the ports of Mundhra and Pipavav on the west coast. The ICD in Manaba will also have a PFT, and the project is estimated to operationalize by mid fiscal 2024. In addition, NCL is also investing in acquisition of four additional trains to support its increasing scale.

The ratings reflect NCL's established market position backed by extensive industry experience of the promoters and integrated service offerings, strong market presence at the JNPT port and strategically located facilities, healthy relationship with shipping lines and expanding customer base in ICD and domestic operations. The ratings also factor in the company's efficient working capital cycle and established infrastructure with three container freight stations (CFS) and one ICD (both set up with railway terminals). Furthermore, controlled debt levels with limited dependence on external debt for working capital despite expected debt funded capex should continue to support its strong financial risk profile. These rating strengths are partially offset by exposure to intense competition in CFS operations, low capacity utilization levels and susceptibility of revenue and profitability to global cargo movements.

Shares of Navkar Corporation Limited was last trading in BSE at Rs. 40.65 as compared to the previous close of Rs. 37.15. The total number of shares traded during the day was 1138188 in over 3070 trades.

The stock hit an intraday high of Rs. 42.60 and intraday low of 37.05. The net turnover during the day was Rs. 43556556.00.

Source : Equity Bulls

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NavkarCorporation INE278M01019 RatingUpdate Reaffirmed