India Ratings and Research revises rating of AGS Transact Technologies Ltd

India Ratings and Research (Ind-Ra) has revised AGS Transact Technologies Limited's (AGS Transact) Long-Term Issuer Rating to 'IND A' from 'IND A+' while revising the Outlook to "Stable" from "Negative". The reason for the revision is on account of Group's stagnant revenue over the last few years and delay in collection of receivables. The agency has affirmed the short-term debt rating to 'IND A1'.

The downgrade is due to AGS Transact group's stagnant revenue over the last few years, a weaker-than-Ind-Ra-expected operating performance during FY24 and stretch in receivable period with receivables above 180 days accounting for about 27% of the consolidated net receivables (billed plus unbilled). During FY24, the group's revenue declined 12% yoy to INR14.9 billion, leading to a moderation in adjusted EBITDA margins (reported EBITDA plus provision for doubtful debt and commitment fees/revenue) to 23.2% (FY23: 26%). During FY24, the group recognised a provision for doubtful debt and commitment fees of INR1.2 billion and INR0.3 billion, respectively, (FY23: INR0.4 billion and nil, respectively), leading to net loss and thereby reduction of equity.

However, the ratings remain supported by the group's strong market positioning across the payment value chain (automated teller machines (ATMs) management, digital payment solutions and cash management). Additionally, the group's long-term contracts to provide critical services to strong counterparties provide comfort around revenue visibility.

Shares of AGS Transact Technologies Ltd was last trading in BSE at Rs. 80.10 as compared to the previous close of Rs. 81.25. The total number of shares traded during the day was 72181 in over 1040 trades.

The stock hit an intraday high of Rs. 82.90 and intraday low of 79.31. The net turnover during the day was Rs. 5811984.00.

Source : Equity Bulls

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