RATING RATIONALE

05Dec2025

Essen Infratech LLP

Brickwork Ratings assigns the rating for the Bank Loan Facilities of Rs. 55.00 Crs. of Essen Infratech LLP

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	35.00	Long Term	BWR BB + /Stable Assignment
Non Fund Based	20.00	Long Term	BWR BB + /Stable Assignment
Grand Total	55.00	(Rupees Fifty Five Crores 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 (BWR) has assigned the long-term rating of BWR BB+/Stable for Rs. 55.00 Crs. of bank loan facilities of Essen Infratech LLP (Essen or the firm).

The rating assignment has factored in the experience of the promoters in the construction industry, operational track record and demonstrated execution capabilities of the promoters, revenue visibility through orders in hand, promoters’ resourcefulness to support business operations of the firm, and stable outlook of the civil construction sector. However, the rating is constrained by geographical concentration risk, customer concentration risk, execution risk, and risks attributable to the cyclicality of the real estate sector and competition with incumbents.

BWR notes that the firm started its business in FY23 and has a limited track record of operations. However, the firm is part of the Navanaami Group and is expected to benefit from the experience and track record of the Group's promoters in real estate and civil construction. The firm has an unexecuted order book value of ~Rs. 555 Crs. as of 30 Sep 2025, to be executed over the next two fiscals. The firm's operations are backed by backward integration through a fleet of vehicles and equipment, which reduces the operational expenses to a certain extent. The firm is expected to go for enhancement of its working capital sanction limit on a need-basis as per the flow of new orders.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. Brickwork Ratings believes that the business risk profile of the firm will be maintained over the medium term. The outlook may be revised to 'Positive' if a sustained increase in scale of operations and higher than envisaged improvement in profitability result in an improved financial risk profile. The outlook may be revised to 'Negative' in case of the firm's inability to increase revenue and profitability on a sustained basis, delay in project execution, and recovery of receivables putting pressure on liquidity, thus weakening the financial risk profile of the firm.

KEY RATING DRIVERS

Credit Strengths:

Experience of the promoters :
The firm is part of Hyderabad based Navanaami Group which is promoted by Mr. Gadde Venkat Naveen. He has an extensive experience of almost three decades in the real estate sector. The Group has a track record of successful completion of eight projects with ~1.5 million sq. ft built-up area in Hyderabad and Bengaluru. The promoters also have a proven track record of supporting the firm's operations through unsecured loans on a need-basis. They are supported by a team of qualified professionals in the acquisition, planning and execution of projects.
Order book position providing adequate revenue visibility :
The firm's total order book value as of 30 Sep 2025 was ~Rs. 753 Crs., with the unexecuted portion at ~Rs. 555 Crs. to be executed over the next two fiscals. The order book position provides the firm's revenue visibility in the near to medium term. The majority (~55%) of the unexecuted orders are from the Navanaami Group's entities - Navanaami Projects Private Limited and Navanaami Ventures LLP. Around ~82% of unexecuted orders are from Hyderabad, which has been the Group's primary area of operations. Balance of orders is from Bengaluru.
Moderate financial risk profile :
The firm's financial risk profile is marked by revenue growth over past three fiscals, steady profitability over past three fiscals, comfortable debt coverage metrics and current ratio, and adequate liquidity. In FY25, the firm reported revenue of Rs. 106.69 Crs. (FY24: Rs. 24.94 Crs.), EBITDA of Rs. 9.70 Crs. (FY24: Rs. 4.11 Crs.), and PAT of Rs. 4.43 Crs. (FY24: Rs. 1.49 Crs.). Total debt outstanding on 31 Mar 2025 was at Rs. 59.15 Crs., but ~Rs. 46 Crs. of that was interest-free unsecured loans (USLs) from the promoters and other related entities. Tangible net worth increased from Rs. 1.92 Crs. on 31 Mar 2024 to Rs. 13.85 Crs. on 31 Mar 2025 due to infusion of Rs. 7.50 Crs. in Partners' Capital and accretion of retained earnings in FY25. Overall gearing on 31 Mar 2025 was at 4.27 times but considering ~Rs. 46 Crs. of USLs as quasi-equity, the adjusted gearing was at 0.22 time. Interest service coverage ratio (ISCR) and debt service coverage ratio (DSCR) were at 12.99 times and 3.72 times, respectively, on 31 Mar 2025. Current ratio was comfortable at 3.83 times as of 31 Mar 2025. BWR notes that low base effect is one of reasons for the growth rate of key financial indicators in the past 3 fiscals. Sustainability of the key financial indicators at the current levels would be monitorable.

Credit Risks:

Geographical and customer concentration, and project execution risk :
As of 30 Sep 2025, ~55% of unexecuted orders by value are from the two Group entities. This concentration exposes the firm's cash flow to any adverse developments in the Group. Although the firm itself was established to primarily execute the various portions of the real estate projects of the Group, the firm has bagged orders from entities outside the Group. It reports higher profitability from orders outside the Group. Around 82% of the unexecuted orders by value are located in Hyderabad, the place of incorporation of the Group itself. Although this exposes the firm to regulatory, environmental, socio-economic and political, and demand-supply risks associated with the region, the established presence of the Group in the region and the promoters' experience mitigate this risk to certain extent. The firm is also exposed to the potential for delays, time/cost overruns, or failure to meet objectives due to issues arising during the implementation phase of a project. However, this risk is partly mitigated due to the presence of cost escalation and Force Majeure clauses in its contracts.
Risks inherent in tender-based business, and competition :
Currently, the firm's operations are at modest scale. Majority of orders are from the Group itself, obtained primarily through bidding and negotiations. The firm has plans to expand its operations by registering itself as a civil contractor, which will make it eligible to compete for government contracts and those from established private entities with low counterparty credit risk. However, it will also expose the firm to competition with other big and small incumbents. The firm will also get exposed to the vagaries of a tender-based business, with growth being aligned to the ability to bid for tenders successfully.
Risk associated with real estate industry :
All the current orders of the firm are from residential and commercial real estate projects being executed by the Navanaami Group and others. This makes the firm's operations and cash flow vulnerable to the state of real estate market. The real estate market is cyclical and seasonal in nature. It is aligned to overall economic growth cycle of the country. Moreover, the execution of projects gets impacted by the weather-related disturbances. Real estate market demand-supply dynamics is impacted by policy interest rate by RBI, timely financial closure of the projects, raw material prices, availability of labour force, and sector-specific and environmental regulations.

ANALYTICAL APPROACH - Standalone

BWR has principally relied upon the standalone audited financials up to FY25, other clarification / information provided by the firm, and publicly available information. For arriving at its rating, BWR has applied its rating methodology as detailed in the Rating Criteria.

RATING SENSITIVITIES

Upward:

Timely completion of the orders in hand without any time and cost overrun
Sustained improvement in the scale of operations and profitability
Geographical and client-wise diversification of operations
Specific credit metrics that could lead to an upgrade include TOL/TNW lower than 1.50 times on a sustained basis

Downward:

Delays in the execution of ongoing orders, a reduction in fresh order inflows or a stretch in the receivables cycle of the firm
Specific credit metrics that could lead to a downgrade include TOL/TNW higher than 2.50 times on a sustained basis

LIQUIDITY INDICATORS - Adequate

The firm's liquidity position is adequate, characterized by net cash accruals of Rs. 6.66 Crs. in FY25 compared to repayment obligations of Rs. 1.86 Crs. and low finance cost adequately covered by EBITDA in FY25. The firm is expected to generate adequate net cash accruals in FY26 and FY27 to cover repayment obligations of Rs. 5.14 Crs. and Rs. 4.85 Crs., respectively. Cash & cash equivalents on 31 Mar 2025 were at Rs. 9.80 Crs. The firm has been sanctioned a Cash Credit facility of Rs. 35 Crs. in July 2025, with average utilisation of ~60%. The unused lines of credit provide the firm cushion for immediate liquidity requirements. Current ratio on 31 Mar 2025 was comfortable at 3.83 times. The firm gets support from the promoters in the form of unsecured loans. Any incremental capex will be need-based and funded primarily through additional bank loans. The firm may enhance existing working capital sanctioned limits based on growth in the order book position.

ABOUT THE ENTITY

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

Essen Infratech LLP (Essen or the firm) is a limited liability partnership incorporated in Hyderabad on 03 Jun 2019 under the provisions of the LLP Act, 2008, as Navanaami Infratech LLP. Its name was changed to Essen Infratech LLP on 29 Aug 2022. The firm is engaged in the business of real estate development, construction activities, builders, contractors and all types of related activities. The unexecuted order book value of the company as of 30 Sep 2025 is ~Rs. 555 Crs., to be completed over the next two fiscals.

Mr. Gadde Venkat Naveen and Mrs. Gadde Sushma Sri are the designated partners, and Mr. Srinivasa Rao Muttineni and Mrs. Bala Nageswari Yenigalla are, other two partners of the firm.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited - Annual)	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)
Operating Revenue	Rs.Crs.	4.94	24.94	106.69
EBITDA	Rs.Crs.	0.66	4.11	9.70
PAT	Rs.Crs.	0.42	1.49	4.43
Tangible Net Worth	Rs.Crs.	0.43	1.92	13.85
Total Debt / Tangible Net Worth	Times	22.04	31.96	4.27
Current Ratio	Times	6.15	10.66	3.83

KEY COVENANTS OF THE FACILITY RATED

Existing unsecured loans (USL) of Rs. 28.00 Crs. and equity of Rs. 10.00 Crs. must be maintained by 31 Mar 2026.
The firm shall endeavour to infuse fresh equity or convert the existing unsecured loans to equity to ensure the following:
- Order Book / Adj. TNW <=10.00x
- (TOL + NFB) / Adj. TNW <= 3.00x
- Order Book / Net Sales between 2.50x to 3.00x
No further withdrawal of USL will be permitted, and the company must provide an undertaking that the USL will not be withdrawn without prior approval of the Bank.
ROI of the USL should not exceed the rate of interest being charged by the existing lenders.

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	35.00	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	LT	20.00	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		55.00	(Rupees Fifty Five Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Swarn Saurabh Assistant Manager - Ratings swarn.s@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Essen Infratech LLP

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	State Bank Of India (SBI)	Cash Credit - Sanctioned	35.00	_	35.00	Simple##
2	State Bank Of India (SBI)	Bank Guarantee - Sanctioned	20.00	_	20.00	Simple##
Total			55.00	0.00	55.00
TOTAL (Rupees Fifty Five Crores 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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