RATING RATIONALE
13Aug2025
A.B. Wagh
Brickwork Ratings has assigned the Long-Term Rating and the Short-Term Rating for the bank loan facilities aggregating Rs. 26.43 Crore of A.B. Wagh.
Particulars| Facilities** | Amount(Rs.Crs.) | Tenure | Rating# | |
|---|---|---|---|---|
| Fund Based | 23.78 | Long Term |
BWR BB +
/Stable Assignment |
|
| Non Fund Based | 2.65 | Short Term |
BWR A4 +
Assignment |
|
| (12.00) | ||||
| Grand Total | 26.43 | (Rupees Twenty Six Crores and Forty Three lakhs Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK
Brickwork Ratings has assigned the Long-Term Rating of BWR BB+ with a Stable outlook and the Short-Term Rating of BWR A4+ for the Bank Loan Facilities amounting to Rs. 26.43 Crore of A. B. Wagh
The assigned ratings reflect the company’s experienced management, comfortable financial risk profile and adequate liquidity position. These factors provide revenue visibility and support growth prospects. However, the ratings are constrained by high capital-intensive nature of operations, high competition and inherent risks in infrastructure sector, Geographical concentration risk and risk associated with partnership constitution.
The Stable outlook reflects BWR’s expectation that A.B. Wagh will continue to benefit from its experienced management, established client relationships, and prudent financial practices. The firm is expected to maintain healthy profitability, adequate liquidity, and a comfortable capital structure over the medium term.
KEY RATING DRIVERSCredit Strengths:
-
Experienced Management :
A. B. Wagh is a partnership firm led by a well-experienced management team with a collective experience spanning several decades in the construction sector. The firm's managing partners bring significant domain expertise—Mr. Arjun Wagh with over 50 years, Mr. Ajay Wagh with 15 years, Mr. Vijay Wagh with 20 years, and Ms. Jyoti Wagh with 13 years of experience. Their hands-on involvement and deep understanding of the industry contribute to effective project execution and client trust. Owing to this robust leadership, the management risk for the firm is considered to be low.
-
Comfortable Financial Risk :
The company’s financial risk profile is moderate. Revenue remained flat at INR 89.07cr in FY25 (FY24 : 89.34cr). Although EBITDA margins improved marginally to 9.42% in FY25 (FY24: 7.75%) owing to favourable project mix. However, TOL/ TNW and gearing has increased to 1.66x in FY25 ( FY24: 1.51x) and 1.08 ( FY24: 0.43) as a result of higher borrowing for equipment indicating moderation in its credit profile despite flat scale of operations. The company’s net worth improved to Rs. 19.02 Crores in FY25 (FY24: Rs. 17.92 Crore) Further, its expected to excel at Rs. 24.61 Crore in FY26 (Projections) approximately. The current ratio has improved to 1.28x in FY25 from 1.02x in FY24. The debt service and interest cover of the company stood at 4.47x & 4.96x and 4.16x & 5.00x in FY25 (provisional) & FY24, respectively, which indicate the company’s adequacy to meet its debt obligations.
-
Working Capital Intensive Operations with Tender Based Revenue Model :
The firm’s conversion cycle is expected to lengthen from -9 days in FY24 to 27 days in FY25, 85 days in FY26, and 105 days in FY27, largely due to an increase in receivable days from 47 days in FY24 to 88 days in FY27 on account of delays in certain State Government payments and revenue remains heavily dependent on securing government tenders, exposing the firm to risks arising from variability in order inflows, intense competitive bidding, payment delays, and procedural clearance requirements.
-
High Geographical Concentration and Competitive Industry :
The firm’s operations are concentrated in Dhule and Nashik districts of Maharashtra, which exposes it to region-specific risks such as administrative delays, local policy changes, and climatic disruptions. Additionally, the highly competitive and fragmented nature of the infrastructure sector exerts pricing pressure and exposes the firm to execution delays and raw material price volatility.
-
Risks Associated with Partnership Constitution :
Being a partnership firm, A.B. Wagh is exposed to the risk of capital withdrawals by partners, which could adversely affect its net worth and capital structure. Moreover, the firm does not have the same governance framework or funding access as a corporate entity, making it more reliant on the personal financial strength and commitment of the partners. In case of disputes or withdrawal of capital for personal use, the firm’s ability to meet its operational and debt obligations could be impacted.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below.
RATING SENSITIVITIES
Positive Factors:
- Sustained improvement in scale and profitability, with operating income consistently above Rs. 100 Cr and operating margins maintained above 9%.
- Strengthening of capital structure and liquidity, reflected by Total Debt/TNW below 0.75x and Current Ratio above 1.5x on a sustained basis.
Negative Factors:
- Decline in revenue or profitability, with TOI falling below Rs. 85 Cr or operating margins dropping below 7% on a consistent basis.
- Deterioration in capital structure or liquidity, indicated by Total Debt/TNW exceeding 1.2x or Current Ratio falling below 1.0x.
The firm’s liquidity remains adequate, cash and bank balances of Rs. 4.54 Crs for FY25 (Prov), inclusive of Rs. 0.62 Crores approximately FDRs against the bank guarantee. The anticipated net cash accruals are Rs. 7.33 Crores Rs. 7.82 Crores for FY26-FY27 against the current debt maturity of Rs. 1 Crs. The average utilization of Fund based working capital is around 80% of drawing power and 100 % Non fund based limit for the past 12 months ending on 24th July 2025. The firm enjoys the conversion of cash credit limit to bank guarantee to the extent of Rs. 12 Crores, which provides the capabilities to bid for new work orders. The current ratio is 1.28x for FY25 (Prov.) (FY24: 1.02x). Given the work orders in hand and expanding operations,the working capital requirement will be substantial and promoters financial support will remain a key monitorable.
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Industrials | Construction | Construction | Civil Construction |
M/s A.B. Wagh is a construction firm founded by Mr. Arjun Bhatu Wagh in 2008, who began his journey as a labourer and rose to become a successful government contractor through sheer determination and hard work. The partnership firm has grown under the leadership of his sons, Mr. Vijay Wagh (B.E. Civil) and Mr. Ajay Wagh (B.E. Comp), who brought in technical expertise and a modern technological approach. M/s A.B. Wagh specializes in infrastructure development, including the upgradation and construction of roads, bridges, highways, and flyovers, playing a role in India’s growing infrastructure push. The partnership firm also has a strong presence in building works such as low-cost housing, residential and commercial complexes, hospitals, amusement parks, and industrial sheds. Known for its commitment to quality, ergonomic design, and structural strength, A.B. Wagh continues to deliver projects that balance functionality, durability, and aesthetics.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 22 - 23 (Audited) |
FY 23 - 24 (Audited) |
FY 24 - 25 (Provisional) |
|---|---|---|---|---|
| Operating Revenue | Rs.Crs. | 61.34 | 89.34 | 89.07 |
| EBITDA | Rs.Crs. | 4.92 | 6.92 | 8.39 |
| PAT | Rs.Crs. | 3.44 | 5.19 | 5.17 |
| Tangible Net Worth | Rs.Crs. | 15.26 | 17.92 | 19.02 |
| Total Debt / Tangible Net Worth | Times | 0.30 | 0.43 | 1.08 |
| Current Ratio | Times | 1.30 | 1.02 | 1.28 |
The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
Not Applicable
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 | 23.78 |
BWR BB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Non Fund Based | ST | 2.65 |
BWR A4+
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (12.00) |
BWR A4+
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 26.43 | (Rupees Twenty Six Crores and Forty Three lakhs Only) | |||||||
- General Criteria
- Approach to Financial Ratios
- Short Term Debt
- Infrastructure Sector
- Engineering Procurement and Construction
| Analytical Contacts | |
|---|---|
|
Smit Mahesh Nagariya Ratings Analyst smit.mn@brickworkratings.com |
Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | Customer Support | CustSupport@brickwrokratings.com |
| 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 | HDFC Bank | Term LoanOut-standing | 3.58 | _ | 3.58 | Simple## |
| 2 | Union Bank of India | Working Capital Term LoanOut-standing | 0.20 | _ | 0.20 | Simple## |
| 3 | Union Bank of India | Cash CreditSanctioned | 20.00 | _ | 20.00 | Simple## |
| 4 | Union Bank of India | Bank GuaranteeSanctioned | _ | 2.65 | 2.65 | Simple## |
| Sub-Limit (Bank Guarantee) Sanctioned | (12.00) | |||||
| Total | 23.78 | 2.65 | 26.43 | |||
| TOTAL (Rupees Twenty Six Crores and Forty Three 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.
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
|---|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| Nil | Nil | Nil | Nil |
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