RATING RATIONALE

02Jul2025

GSBA Builders Pvt Ltd

Brickwork Ratings assigns the long term ratings for the Bank Loan Facilities of Rs. 24.50 Crs. of GSBA Builders Pvt Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	5.50	Long Term	BWR BB /Stable Assignment
Non Fund Based	19.00	Long Term	BWR BB /Stable Assignment
Grand Total	24.50	(Rupees Twenty Four Crores and Fifty 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 assigns the long-term rating of BWR BB /Stable for the bank loan facilities of Rs.24.50 Crs of GSBA Builders Pvt Ltd.

BWR has essentially relied upon the audited financial statements of the company upto FY24(A), relevant data to the extent available for 12MFY25(Prov.), projected financials for FY26 and FY27, as well as information/clarifications provided by the company’s management and its bankers, to arrive at the present ratings.

The rating draws strength from the extensive business experience of the Directors, moderate Order Book Position, strong financial risk profile, and satisfactory financials as per the projections made. The ratings also takes into account the successful completion of previous projects on time.

The rating however, is constrained by the High Working Capital requirement, Project execution risk, competition in the industry and tender based nature of the business.

The outlook has been retained as 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.

KEY RATING DRIVERS

Credit Strengths:

Strong Financial Profile :
GSBA booked an operating income of Rs. 96.77 crs in FY24 and slightly improved at Rs.97.56 Crs as per provisional FY25, other profitability and solvency ratios are at healthy position.Current ratio has been consistently maintained at 1.33x levels over the period.Company reported comfortable credit profile over the years as it reported Interest Coverage Ratio of above 1.40x during FYs 22-25, while Total Debt/TNW also remained comfortable at below unity during this period.
YOY increasing TNW :
The TNW of the company has been significantly increasing on a Y-O-Y basis and stood at Rs.23.33 Crs in FY24 as compared to Rs.22.19 Crs in FY23 that's 5.14% growth.As per Prov FY24-25 its at Rs.25.51 Crs which is 9.34% growth in comparison with FY23-24.
Long track record of promoters and experienced management team of the Company :
The GSBA Builders Pvt Ltd was established in 1983 by Mr. Gurdip singh Mahal, who have experience of more than two decades through their association with this entity. They are associated with GSBA since its inception and looks after the overall business of the company. Mr. Pranvat singh Mahal and Ms. Poonam Mahal are also the directors of the company. The long-standing presence in industry through this entity and other associates has enabled the company to establish a relationship with its customers and suppliers in the industry.

Credit Risks:

Project Execution Risk :
The Company remains exposed to the inherent project execution risks associated with the construction industry.
Competition in Industry :
The industry is fragmented, with stiff competition from organized and unorganized players in the vicinity which might impact the revenues and profitability.
Tender Based Nature of Business :
The company operates in a tender based business where revenue generation is dependent on successful bidding and acquisition of tenders. However, the long association of the company with their customers and suppliers, and their presence in the industry for more than 20 years, enables them to bid for high value tenders and secure the orders.

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Positive :

A rating upgrade could be driven by achieving sustained growth in revenues as per the projections, along with consistent improvement in profitability margins, with the operating margin rising above 6.50% on a sustained basis. Successful realization of payments given govt. contracts.

Negative:

A rating downgrade may be triggered by an inability to achieve the projected revenue and profit growth, with the operating margin dropping below 4.75%. An increase in Total Debt/TNW above 1.0x would indicate higher leverage risk.

LIQUIDITY INDICATORS - Adequate

The average utilization of the overdraft facility stood at 98.00% during the periods of January 24 to February 25.
The tangible net worth of the company stood at Rs.23.33 Crs in FY24 & as per provisionals of FY25 at Rs.25.51 Crs.
The Debt Service Coverage Ratio (DSCR) remained comfortable at 1.43 times in FY24, reflecting a strong ability to meet debt obligations.
Additionally, the current ratio stood at an adequate 1.33 times, indicating a stable liquidity position.
In FY24 (Audited), the company maintained a cash and bank balance of ₹5.16 Crores.
Net Cash accruals stood at Rs.1.77 Crs in FY24 & at 2.81 crs in FY25 (Prov) & is projected to be at Rs. 4.94 Crs in FY26 which are sufficient to provide margin for the Bank Guarantee.
The company has no long-term loans at present, which further indicates the adequate liquidity position of the company.

ABOUT THE ENTITY

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

GSBA Builders Private Limited is one of the most reputed and experienced construction companies in North India, with a legacy spanning over nine decades in the field of civil construction.The company is managed by Mr. G.S. Mahal (Grandson of Sardar Gurbaksh Singh) and is having more than 20 years of experience, The company undertakes civil construction work and majorly working with Government organisation like NBCC, Chandigarh Housing Board etc . The portfolio also includes Hotels, Institutional Buildings, Hospitals, Industrial Facilities, Bungalows, Farmhouses, Premium Residential Units (Floors and Villas), Group Housing Projects, Commercial Complexes, Embassies, Government Offices, and Malls.

Over the decades, GSBA has been a trusted partner to business families like G.D. Birla, Somany's, and Goenkas, symbolizing a legacy built on trust, craftsmanship, and timely delivery.

KEY FINANCIAL INDICATORS

Standalone Financial Indicators (in ₹ crore)	Units	FY 22 - 23 ()	FY 23 - 24 ()	FY 24 - 25 ()
Operating Revenue	Rs.Crs.	89.46	96.77	97.56
EBITDA	Rs.Crs.	4.57	4.43	6.26
PAT	Rs.Crs.	0.89	1.14	2.18
Tangible Net Worth	Rs.Crs.	22.19	23.33	25.51
Total Debt / Tangible Net Worth	Times	1.05	0.86	0.77
Current Ratio	Times	1.32	1.33	1.18
* A:Audited UA:Unaudited P:Provisional PROJ:Projected
Note: these are latest available financial results. All ratios as per BWR's calculations; Amount in ₹ crore

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 LAST 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	5.50	BWR BB/Stable (Assignment)	22Jan2024	BWR B Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded and withdrawn)	10Jan2023	BWR B+ Stable (ISSUER NOT COOPERATING* /Downgrade)	24Jan2022	BWR BB- Stable (Reaffirmation)
Non Fund Based	LT	19.00	BWR BB/Stable (Assignment)	22Jan2024	BWR B Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded and withdrawn)	10Jan2023	BWR B+ Stable (ISSUER NOT COOPERATING* /Downgrade)	24Jan2022	BWR BB- Stable (Reaffirmation)
Grand Total		24.50	(Rupees Twenty Four Crores and Fifty lakhs Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Mukul Singh Sahu Ratings Analyst mukulsingh.s@brickworkratings.com	Ravi Rashmi Dhar Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

GSBA Builders 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	Canara Bank	Bank Guarantee - Sanctioned	19.00	_	19.00	Simple##
2	Canara Bank	OCC/ODBD - Sanctioned	5.50	_	5.50	Simple##
Total			24.50	0.00	24.50
TOTAL (Rupees Twenty Four Crores and Fifty 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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