ICRA Nepal assigns A3+ to short term loans of MAW Earth Movers; Find the details
Thu, Feb 13, 2020 11:27 AM on Credit Rating, Latest,
ICRA Nepal has assigned a short-term rating of [ICRANP] A3+ (pronounced ICRA NP A three plus) to the short-term loans (including non-fund based limits) of MAW Earth Movers Private Limited (MEPL).
Credit strengths
- Fair track record of operations and strong market presence
- Improving sales mix
- Comfortable financial profile
- Financial flexibility as part of M.A.W. Group
Credit challenges
- Cyclicality in demand led to huge decline in equipment sales in FY2019
- Intense competition and high dependence on a few models
- High working capital intensity
- Tighter bank financing could impact cash flow streams
About the company
Incorporated in 2008, MAW Earth Movers Private Limited (MEPL) is the sole authorised dealer for the JCB brand construction equipment in Nepal. The company is promoted by M.A.W. Enterprises with 65% stake and Mr. Vishnu Kumar Agarwal (Chairman for the Group as well as the company) with a 35% stake. The company is a part of the M.A.W. Group which has an extensive experience in the automobile sector (>50 years) including dealerships of two-wheelers, commercial vehicles, construction equipment, private cars. The Group also has stake in other diverse spheres such as hire purchase financing. MEPL has presence across the country through a network of 12 branches and 16 authorised retail outlets (AROs).
Key financial indicators
|
|
FY2016 (Audited) |
FY2017 (Audited) |
FY2018 (Audited) |
FY2019 (Provisional) |
|---|---|---|---|---|
|
Operating income (OI; NPR million) |
4,423 |
8,206 |
10,565 |
7,316 |
|
OPBDITA/OI (%) |
7.1% |
7.0% |
7.8% |
9.0% |
|
Total debt/Tangible net worth (TNW; times) |
3.50 |
3.31 |
3.70 |
1.16 |
|
Total outside liabilities/TNW (times) |
4.97 |
4.08 |
4.76 |
2.15 |
|
Total debt/OPBDITA (times) |
2.85 |
3.22 |
3.55 |
1.55 |
|
Interest coverage (times) |
6.57 |
4.77 |
3.52 |
3.06 |
|
DSCR (times) |
4.94 |
3.60 |
2.83 |
2.53 |
|
Net working capital/OI (%) |
25% |
27% |
32% |
24% |
Source: Company data
Instrument details
|
Instrument |
Limit (Amount in NPR Million) |
Rating Action |
|---|---|---|
|
Non-fund based facilities; Short term |
|
|
|
Letter of credit - LC |
2,250 |
[ICRANP] A3+ |
|
LC (within funded limits) |
(430) |
[ICRANP] A3+ |
|
Bank guarantee – BG |
50 |
[ICRANP] A3+ |
|
BG (within funded/non-funded limits) |
(70) |
[ICRANP] A3+ |
|
Total non-fund based (A) |
2,300 |
|
|
Fund-based facilities; Short term |
|
|
|
Overdraft |
70 |
[ICRANP] A3+ |
|
Import loans/ Trust receipt (TR) loans |
1,130 |
[ICRANP] A3+ |
|
Import loans/ TR loans (within funded/non-funded limits) |
(1,850) |
[ICRANP] A3+ |
|
Instrument |
Limit (Amount in NPR Million) |
Rating Action |
|
Short-term loans |
500 |
[ICRANP] A3+ |
|
Short-term loans (within funded/non-funded limits) |
(1,230) |
[ICRANP] A3+ |
|
Total fund-based (B) |
1,700 |
|
|
|
|
|
|
Grand total (A+B) |
4,000 |
|
Source: ICRA Ratings Nepal (https://www.icranepal.com/)
