BECIL posts operating income of Rs. 219.87 cr for 9M FY20
MUMBAI: Broadcast Engineering Consultants India Limited (BECIL) has posted a total operating income of Rs. 219.87 crore for 9M FY20 (1st April to 31st December).
During FY19, BECIL registered a growth of 34% in total operating income which increased from Rs. 241.78 crore in FY18 to Rs. 324.87 crore for FY19 on account of significant growth in manpower placement services.
Considering the trading operations as the major contributor to the overall revenues, the profitability margin is inherently low. The PBILDT margins however improved in FY19 at 3.43% vis-à-vis 0.04% in FY18 as the contribution from domestic business increased which has higher margins.
Further, BECIL reported a PAT of Rs. 0.05 crore in FY19 against a PAT loss in FY18, however, it still continued to be low on account of high-interest expenses which further increased to Rs. 7.67 crore in FY19 from Rs. 4.08 crore in FY18 due to increased working capital borrowings.
BECIL derives its revenues from the sales of equipment either through tender or direct marketing efforts. Hence, the ability of the company to sustain its business depends on successful bidding for the tenders. However, BECIL being one of the integrated players in the industry is insulated from competition to some extent owing to its premier position long industry experience.
It faces competition from small players in some of their segments such as transmitter, cable, antenna etc. in the broadcasting segment. However, over the years, BECIL has established itself as an integrated player in the industry.
For the execution of its projects and stretched collection period (due to government clients), BECIL resorts to short term borrowings. Further, BECIL has no long term debt obligations as on date. Out of the total debt of Rs. 69.03 crore as on March 31, 2019; Rs. 55.62 crore is in the form of overdraft facility, Rs. 7.48 crore is a loan against fixed deposit and Rs.5.93 crore is LC Acceptances.
CARE Ratings has reaffirmed BECIL’s long-term bank facilities totaling Rs 70 crore with CARE BB rating. The short-term bank facilities have been reduced from Rs 275 crore. It has also assigned CARE A4 ratings to the short-term bank facilities of Rs 210 crore.
The reaffirmation in the ratings assigned to the bank facilities of Broadcast Engineering Consultants India Limited (BECIL) continues to remain constrained by its moderate financial risk profile, low profitability margins owing to substantial contribution from trading operations, tender driven nature of the business activities and competition from small equipment players.
The ratings, however, derive strength from 100% government of India ownership, diversified clientele in niche segment and moderate order book position. Going forward, the ability of the company to timely execute its existing contracts and efficient management of its working capital aided by timely realizations of its outstanding debtors shall remain the key rating sensitivities.
The outlook of the company continues to remain ‘Negative’ on account of significantly stretched collection period of the company which stood at 308 days in FY19 (refers to period from April 01 to March 31) resulting in moderation in the capital structure on account of increased working capital borrowings.
The outlook may be revised back to ‘Stable’ if the company is able to achieve envisaged growth for FY20 along with a timely realisation of its outstanding debtors resulting in the efficient management of its working capital borrowings and improved capital structure.
BECIL’s unexecuted order book stood at Rs. 305.73 crore as on 17th February 2020, which translates into 0.94 times of revenues for FY19 ensuring revenue visibility in the medium term. Out of the total contracts to be executed, the top five contracts account for 71.29% of the total order book which consists of control and surveillance projects from government organisation.
Established in March 1995, Broadcast Engineering Consultants India Limited (BECIL) is a Central Public Sector Enterprise of Government of India under the Ministry of Information and Broadcasting. BECIL is ISO 9001:2015, ISO 27001:2013 and ISO/IEC 20000:2012 certified and has been accorded a status of ‘Mini Ratna’.
BECIL is engaged in providing project consultancy services and turnkey solutions consist of radio and television broadcast engineering and providing services like building design and construction related to broadcasting, human resource planning, and supply of specialised communication, monitoring, security and surveillance systems. BECIL also undertakes supply of specialised communication, monitoring, security and surveillance systems to defense, police and para-military departments.