Embee Software_r_01112018.pdf - Embee Software Private Limited Summary of rated instruments Instrument Previous Rated Amount Current Rated Amount(Rs

Embee Software_r_01112018.pdf - Embee Software Private...

This preview shows page 1 - 3 out of 7 pages.

1 Embee Software Private Limited November 01, 2018 Summary of rated instruments Instrument* Previous Rated Amount (Rs. crore) Current Rated Amount (Rs. crore) Rating Action Fund-based working capital 19.50 29.50 [ICRA]BBB+ (Stable); upgraded from [ICRA]BBB(Stable) Non-fund based limits 17.00 34.00 [ICRA]BBB+ (Stable)/ [ICRA]A2; upgraded from [ICRA]BBB(Stable)/A3+ Fund based/Non-fund based limits 20.90 15.90 [ICRA]BBB+ (Stable)/ [ICRA]A2; upgraded from [ICRA]BBB(Stable)/A3+ Total 57.40 79.40 *Instrument details are provided in Annexure-1 Rating action ICRA has upgraded the long-term rating to [ICRA]BBB+ (pronounced ICRA triple B plus) from [ICRA]BBB (pronounced ICRA triple B) and the short-term rating to [ICRA]A2 (pronounced ICRA A two) from [ICRA]A3+ (pronounced ICRA A three plus) for the Rs. 29.50-crore 1 (enhanced from Rs. 19.50 crore) fund-based working capital facilities, Rs. 34.00-crore (enhanced from Rs. 17.00 crore) non-fund based bank limits as well as the Rs. 15.90-crore (revised from Rs. 20.90 crore) bank facilities, which can be used as both fund-based and non-fund based limits, of Embee Software Private Limited (Embee) 2 . The outlook on the long-term rating is Stable. Rationale The ratings upgrade primarily takes into account the robust revenue growth (33%) achieved by Embee during FY2018, mainly driven by its increasing penetration in the cloud computing segment for which the company was also recognised by Microsoft Corporation (Microsoft) as its ‘Country Partner’. In addition, higher revenue from the audio -visual and hardware segments also supported t he company’s top -line growth to an extent during FY2018. The ratings continue to draw comfort from Embee’s established operational track record as an information technology (IT) service provider to corporate customers and relationship with globally renowned vendors in the IT space. Microsoft has designated Embee as a licensing solution partner (LSP) for volume licensing of software and has also rendered it the status of a cloud service provider (CSP), reflecting the company’s strategic engagement with Micro soft, which accounted for around 65% of Embee’s turnover in FY2018. Embee also has strategic tie-ups with other premier vendors of IT products such as Hewlett- Packard Company (HP), IBM, SAP, Oracle, Cisco, Adobe, Epson etc. which lend operational strength to the company and enable it to acquire reputed institutional clients, leading to continuous expansion of customer base. Moreover, the company’s annuity contracts with various customers render revenue visibility in the medium to long term. ICRA also notes Embee’s comfortable return on capital employed due to its low fixed capital requirement for the business. 1 100 lakh = 1 crore = 10 million 2 For complete rating scale and definitions, please refer to ICRA's website or other ICRA Rating Publications
Image of page 1

Subscribe to view the full document.

2 The ratings, however, are constrained by the company’s stretched receivables level , which exerts pressure on its liquidity position, and Embee ’s hig h total outside liabilities relative to tangible net worth due to significant dependence on creditors funding. ICRA also notes that the limited pricing flexibility due to competitive nature of the business keeps
Image of page 2
Image of page 3
  • Spring '17

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes