Consolidated Construction Consortium Limited (CCCL), a prominent player in the civil construction industry, has received a new credit rating from Infomerics Valuation and Rating Ltd., while simultaneously withdrawing from CARE EDGE ratings. This development marks a significant shift in the company's financial assessment landscape.

New Credit Rating

Infomerics Valuation and Rating Ltd. has assigned the following ratings to CCCL's bank facilities:

Key Rating Factors

The ratings reflect several strengths and challenges faced by CCCL:

Strengths:

• Experienced promoters with a long track record in the civil construction industry
• Satisfactory order book of Rs. 611.15 crores, providing near-term revenue visibility
• Debt-free capital structure post-settlement

Challenges:

• Moderate scale of operations
• Operational losses in recent years
• Revenue concentration risk
• Intense competition in a fragmented industry

Financial Performance

CCCL's financial performance has been mixed:

Settlement and Debt Resolution

CCCL has made significant strides in resolving its debt issues:

• Settled insolvency proceedings under Section 12A of IBC Act, 2016
• Made an upfront payment of Rs. 175 crore to lenders
• Discharged Rs. 80 crore obligation through arbitration receipts
• Paid Rs. 2.5 crore towards its share of future receivables

Outlook

The outlook remains stable, supported by CCCL's comfortable order book and established project execution capabilities. However, the company's ability to improve its operational performance and manage working capital will be crucial for its future financial health.

CARE EDGE Rating Withdrawal

CCCL has withdrawn from CARE EDGE rating due to settlement considerations. The company stated that the earlier CARE EDGE rating did not consider the settlement made by the promoters under Section 12A of the IBC Act, 2016.

As Consolidated Construction Consortium Limited navigates through its financial restructuring and aims for operational improvement, stakeholders will be closely watching its performance in the coming quarters. The new credit rating from Infomerics provides a fresh perspective on the company's financial standing, reflecting both its challenges and potential for recovery.

Consolidated Construction Consortium Limited (CCCL) has reported a significant profit of Rs 4,878.65 crore for the quarter ended September 30, primarily driven by an exceptional gain from the sale of its wholly-owned subsidiary. The company's financial performance for Q2 showcases a remarkable turnaround, largely attributed to strategic divestment.

Key Financial Highlights

• Revenue from Operations: Rs 5,544.27 crore
• Net Profit: Rs 4,878.65 crore
• Exceptional Gain: Rs 9,578.35 crore from subsidiary sale

Subsidiary Sale: A Game-Changing Move

The company completed the sale of its wholly-owned subsidiary, CCCL Infrastructure Limited, to DPF Textiles Pvt Ltd for a total consideration of Rs 22,500 crore. This strategic move resulted in an exceptional gain of Rs 9,578.35 crore, significantly boosting the company's bottom line.

Operational Performance

Despite the substantial profit, it's important to note that the company's core operational performance shows room for improvement. The profit is largely attributed to the one-time gain from the subsidiary sale rather than operational efficiency.

Financial Position

Order Book

CCCL reported a robust order book with work on hand valued at Rs 51,658.47 crore as of September 30, indicating a strong pipeline of future projects.

Auditor's Observations

The company's auditors, ASA & Associates LLP, have raised certain qualifications in their limited review report:

1. Non-receipt of balance confirmations from various parties
2. Insufficient evidence for identification of micro and small enterprises
3. Non-provision of interest on dues to micro and small enterprises
4. Non-estimation of interest and penalties on delayed statutory payments

Management's Response

The company management has acknowledged these issues and stated that they are working on addressing them. They believe that no material adjustments would be required upon receipt of balance confirmations.

Future Outlook

While the substantial profit from the subsidiary sale has strengthened CCCL's financial position, the company's focus will likely shift towards improving its core operational performance and addressing the concerns raised by the auditors. The strong order book suggests potential for future growth, but efficient execution will be crucial for sustained profitability.

Investors and stakeholders should closely monitor the company's operational performance in the coming quarters to assess its ability to generate profits from its core construction and infrastructure services business.

Note: All figures are based on the standalone financial results of Consolidated Construction Consortium Limited for the quarter ended September 30.