The credit rating agency has also reaffirmed its ‘CRISIL A2' rating on the short-term facility of the company.

CRISIL said that the outlook revision reflects the expectation that the Alphageo group will sustain its improved performance. The operating margin was better than expected at 23.7% in fiscal 2021 (up from 7.2% in fiscal 2020) aided by improved performance in the last two quarters of the fiscal and recognition of performance guarantee receivable of Rs 18.88 crore from a customer based on favourable order received.

This resulted in increase in net cash accrual of Rs 33.7 crore in fiscal 2021 (up from Rs 7.3 crore in fiscal 2020). The performance remained healthy in the first half of fiscal 2022 as indicated by revenue of over Rs 82 crore and operating margin of 25.8%.

The rating action also factors in the group's healthy financial risk profile driven by robust capital structure, healthy debt protection metrics and improved liquidity. However order flow and efficient execution of orders along with timely realisation of receivables will remain key monitorables.

The ratings reflect the extensive experience of the group's promoters and its established position in the onshore seismic survey services industry, and healthy financial risk profile. These strengths are partially offset by seasonality in operations, volatility in cash flow, and susceptibility to risks inherent in tender-driven business and to unfavourable government policies.

Alphageo (India) provides seismic-data acquisition and processing services to oil and gas exploration entities.

The company reported a consolidated net loss of Rs 6.95 crore in the quarter ended September 2021 as against net loss of Rs 9.71 crore during the previous quarter ended September 2020. Sales rose 147.56% to Rs 2.03 crore in Q2 FY22 from Rs 0.82 crore in Q2 FY21.