RATING RATIONALE

22Apr2025

Amhara Construction Pvt. Ltd.

Brickwork Rating upgrades the long-term ratings and the short-term ratings for bank loan facilities of Rs. 36.32 Crs. of Amhara Construction Pvt. Ltd. and simultaneously removes the ratings from the ISSUER NOT COOPERATING category.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (12 Apr 2024)	Present
Fund Based	2.00	1.32	Long Term	BWR BB /Stable ISSUER NOT COOPERATING* /Downgrade	BWR BBB - /Stable removal from ISSUER NOT COOPERATING* category/Upgraded
Non Fund Based	38.00	35.00	Short Term	BWR A4 ISSUER NOT COOPERATING* /Downgrade	BWR A3 removal from ISSUER NOT COOPERATING* category/Upgraded
Grand Total	40.00	36.32	(Rupees Thirty Six Crores and Thirty Two lakhs Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure

RATING ACTION / OUTLOOK

Brickwork Ratings has upgraded the ratings for the long term bank loan facilities of Amhara Construction Pvt. Ltd. for an amount of Rs.1.32 Crs to BWR BBB-/Stable and their short term bank loan facilities for an amount of Rs.35.00 Crs to BWR A3 (aggregate rated amount Rs.36.32 crores) and has simultaneously removed the ratings from the Issuer Not Cooperating Category.

The rating upgrade reflects the company's long operational track record and the extensive experience of its directors, a relatively moderate financial risk profile, moderate order book position, adequate liquidity, and positive feedback from lenders. However, the ratings are constrained by exposure to intense competition in the civil construction industry, risks associated with tender-based business, and highly geographical and customer concentration risks.

The outlook has been retained Stable as BWR believes that the business risk profile of the company will be maintained over the medium term. The Stable outlook indicates a low likelihood of a rating change over the medium term.

For assigning the rating, BWR has relied upon the last 3 years of audited financials till FY24, Provisional financials for FY25 and projected financials for FY26 & FY27, and publicly available information and clarification provided by management.

KEY RATING DRIVERS

Credit Strengths:

Extensive experience of the promoter :
Amhara Construction Pvt. Ltd. was incorporated on 16th April 2008. The directors of the Company have more than two decades of business experience in Construction business.
Relatively Moderate Financial Risk Profile :
The company has a relatively moderate financial risk profile, as reflected by a moderate gearing of 1.27 times in FY24 and 0.94 times in FY25 (Prov.). In FY25, the DSCR and ISCR stood at 1.72 times and 2.83, respectively. This indicates that the internal accruals are adequate to service the debt obligation. Operating profit margin stood moderate at 12.84% in FY24 and 12.59% in FY25.
Moderate order book position :
The company had an order book of Rs. 122.64 crore as on March 31, 2025 providing medium-term revenue visibility. The orders are mainly from Executive Engineer New Capital Road Division R.C.D Patna, which is a part of the Bihar Road Construction Department and hence have low counterparty risk.

Credit Risks:

Exposure to intense competition :
The civil construction industry is highly fragmented owing to low entry barriers and minimal technical expertise; the consequent intense competitive pressure may continue to constrain scalability, pricing power and profitability. This risk is partially offset by a long standing relation maintained with the principals.
Risks associated with tender based business :
The Company executes government projects which gives rise to the inherent risks associated with the successful capturing of tenders, timely completion of the project and timely receipt of the payments from government departments.
Highly geographical and customer concentration risks :
The company faces high revenue concentration risks in terms of geography, with its entire revenues being derived from the state of Bihar. The Company also faces high client concentration risk, with a major portion of its revenues being derived from the state and central highways bodies. Nonetheless, as the Group’s clientele comprises entirely of government entities, the counterparty risk is mitigated to an extent.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of ACPL. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the company to improve the scale of operations and profitability, maintain a strong liquidity position, effectively manage working capital, and strengthen the overall credit profile would be the key rating sensitivities.

Positive :

Steady increase in turnover or profitability, leading to increased cash accruals. Growth in operating income to more than Rs. 160.00 Crs, with the operating margin (OPM) rising above 15% and the net margin (NPM) exceeding 13% on a sustained basis
Maintenance of an optimum capital structure, increase in liquidity position, and TNW on a continuous basis.

Negative:

Decline in revenue, a drop in operating profit margin below 11% and net margins below 9% and deterioration of the financial position of the Company, including deterioration in liquidity, leverage, and TNW on a continuous basis would indicate higher leverage risk.
Delayed payments of its debt obligations.

LIQUIDITY INDICATORS - Adequate

The average utilization of the cash credit facility over the past 12 months stood at a moderate 80.80%.
The Debt Service Coverage Ratio (DSCR) remained comfortable at 1.72 times in FY25 (Prov), reflecting the ability to meet debt obligations.
The Interest Service Coverage Ratio (ISCR) remained comfortable at 2.83 times in FY25, indicating stronger interest servicing capacity.
Additionally, the current ratio stood at an adequate 1.99 times, indicating a stable liquidity position.
Total Debt/TNW remained comfortable at 0.94 times, reflecting lower dependence on debt.
Net Cash accruals stood at Rs.13.56 Crs in FY25 against the CPLTD of Rs. 4.32 Crs in FY25 and cash accruals of Rs. 16.76 Crs in FY26 against the CPLTD of Rs. 4.32 Crs in FY26. The company maintained a cash and bank balance of Rs 74.85 Crores in FY25.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Industrials	Construction	Construction	Civil Construction

Amhara Construction Pvt. Ltd. (ACPL) was incorporated on 16th April 2008. Main branch in Patna, Bihar. Mr. Rakesh kumar, Mr. Suraj kumar Sharma, Mr. Raunak kumar and Mr. Rajat Anand are the directors of the Company. ACPL is a ‘Class 1’ contractor engaged in the business of construction and maintenance of the roads for the Government as well as private sector on tender basis. It is registered with various Government Road Construction Departments, namely Executive Engineer New Capital Road Division RCD Patna, Executive Engineer Patna City Road Division, Gulzarbagh, Executive Engineer Jehanabad RCD, NH Division Patna etc. It also has experience to work for reputed private companies, namely Gammon India Engineers Ltd and S.P. Singla Construction Limited.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)	FY 24 - 25 (Provisional)
Operating Revenue	Rs.Crs.	98.80	82.50	120.08
EBITDA	Rs.Crs.	8.22	10.59	15.12
PAT	Rs.Crs.	10.60	8.40	12.48
Tangible Net Worth	Rs.Crs.	58.17	66.55	79.03
Total Debt / Tangible Net Worth	Times	1.31	1.27	0.94
Current Ratio	Times	2.12	1.93	1.99

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for bank loan facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	1.32	BWR BBB-/Stable (removal from ISSUER NOT COOPERATING* category/Upgraded)	12Apr2024	BWR BB Stable (ISSUER NOT COOPERATING* /Downgrade)	13Jan2023	BWR BBB- Stable (Assignment)	NA	NA
Non Fund Based	ST	35.00	BWR A3 (removal from ISSUER NOT COOPERATING* category/Upgraded)	12Apr2024	BWR A4 (ISSUER NOT COOPERATING* /Downgrade)	13Jan2023	BWR A3 (Assignment)	NA	NA
Grand Total		36.32	(Rupees Thirty Six Crores and Thirty Two lakhs Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com	Hari Kishan Yadav Associate Director - Ratings hari.ky@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Amhara Construction Pvt. Ltd.

ANNEXURE-I

Details of Bank Facilities rated by BWR

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Bank of India	Term Loan - Out-standing	0.02	_	0.02	Simple##
2	Bank of India	Bank Guarantee - Sanctioned	_	35.00	35.00	Simple##
3	Bank of India	Bank Guarantee - Proposed	_	_	0.00	Simple##
4	Bank of India	Overdraft - Sanctioned	0.50	_	0.50	Simple##
5	State Bank Of India (SBI)	Overdraft - Sanctioned	0.80	_	0.80	Simple##
Total			1.32	35.00	36.32
TOTAL (Rupees Thirty Six Crores and Thirty Two lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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