The company’s revenue has successively declined to Rs 0.7 billion in financial year 2019 (FY19) from earlier Rs 1.3 billion in FY18 and Rs 6.7 billion in FY17, led by the slow project execution and the absence of new orders
New Delhi: India Ratings and Research (Ind-Ra) has downgraded the credit rating and revised the outlook as negative for NTPC BHEL Power Projects Private Limited (NBPPL), a joint venture company of state-owned NTPC and BHEL.
“The downgrade and the negative outlook reflect NBPPL’s consistently deteriorating operating performance, poor liquidity due to slow project execution and the absence of new orders,” Ind-Ra said. The large outstanding creditors can potentially expose the company to legal cases by operational creditors under National Company Law Tribunal (NCLT), it added.
The company’s revenue has successively declined to Rs 0.7 billion in financial year 2019 (FY19) from earlier Rs 1.3 billion in FY18 and Rs 6.7 billion in FY17, led by the slow project execution and the absence of new orders.
According to India Ratings, the company has not received any new orders in the engineering procurement construction (EPC) segment post 2013 and in the manufacturing operations segment since 2016, which limits the scaling up of operations.
This along with the company’s complete dependence on the low-margin project in Unchahar, Uttar Pradesh with an unexecuted order book of Rs 2.8 billion, has constrained its ratings. According to the company management, the revenue for FY 20 is likely to have been around Rs 0.7 billion to Rs 0.8 billion, Ind-Ra said.
Ind-Ra added there is a limited likelihood for the company to receive new orders and expects no significant turnaround in operations in the near-to-medium term.
Source: energy.economictimes.indiatimes
