The ratings continue to reflect the extensive experience of the promoters in the shipping industry along with the established track record, sound operating efficiency and healthy financial risk profile of KMEW.

These strengths are partially offset by modest scale of operations, susceptibility to risks related to the tender-based nature of business and timely execution of orders and dependence on the shipping and maritime industry.

The rating agency stated that factors like sizeable and sustainable increase in revenue and profitability, led by continuous work orders, leading to cash accrual above Rs 50 crore; and an improvement in the working capital cycle leading to improved liquidity profile could lead to a ratings upgrade.

However, the company could face a rating downgrade if there is a decline in revenue or profitability, resulting in cash accrual below Rs 20 crore; and large, debt-funded capital expenditure or substantial stretch in the working capital cycle leads to deterioration in the liquidity profile.

Knowledge Marine & Engineering Works is engaged in providing dredging services, owning and operating marine craft, and repairing, maintaining and refitting marine crafts and marine infrastructure. Its head office is in Mumbai and operations are spread across major ports in the country through branch offices in Kolkata, Vishakapatnam, Kandla, Vadinar and Sittwe, Myanmar.

The scrip rose 0.20% to currently trade at Rs 1699.10 on the BSE.