KDH INFRA ENGINEERING PRIVATE LIMITED

Brickwork Ratings has assigned a long-term rating for the bank loan facilities of Rs. 113.78 Crs. of KDH INFRA ENGINEERING PRIVATE LIMITED

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	58.78	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	55.00	Long Term	BWR BBB - /Stable Assignment
Grand Total	113.78	(Rupees One Hundred Thirteen Crores and Seventy Eight 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
*** The facility's maturity profile extending beyond 12 months necessitates the assignment of a Long-Term Rating, as short-term scales are reserved for instruments with tenors of one year or less RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) has assigned a Long-Term Rating of BWR BBB- (Stable) for the Bank Loan Facilities of Rs. 113.78 Crores of KDH Infra Engineering Private Limited (KDH Infra or ‘the Company’).

The rating assignment reflects the extensive experience of the promoter group (led by Mr. K. Dodda Hanumanthappa) in the irrigation EPC segment and their established track record. The rating is fundamentally supported by a robust unexecuted order book of Rs. 1,023 Cr (as of Jan 2026), which provides strong revenue visibility for the medium term. Furthermore, the presence of Rs. 60.13 Cr in non-interest-bearing promoter unsecured loans provides a significant buffer to the capital structure. The rating is, however, constrained by the high working-capital intensity inherent in state-sponsored irrigation projects, evidenced by elevated receivable days and high utilisation of non-fund-based limits. The rating further factors in the geographic and counterparty concentration, as the company remains exposed to the budgetary allocations and payment cycles of Karnataka state irrigation bodies.

The stable outlook reflects expectations that the company will continue to benefit from its experienced promoter, established relationships with Karnataka irrigation departments, and a healthy unexecuted order book, which together provide medium-term revenue visibility

KEY RATING DRIVERS

Credit Strengths:

• Experienced promoter and established industry relationships :

  The company benefits from the extensive experience of its promoter, Mr. K. Dodda Hanumanthappa, who has over two decades of experience in the irrigation EPC segment. The promoter group has historically executed projects aggregating to over Rs. 1,600 Cr, supporting execution capability. Longstanding relationships with Karnataka irrigation bodies such as Karnataka Neeravari Nigam Limited, Visvesvaraya Jala Nigam Limited, and Krishna Bhagya Jala Nigam Limited provide repeat business visibility and counterparty comfort

• Healthy order book supporting revenue visibility :

  The company has a strong unexecuted order book of around Rs. 1,023 Cr along with bids under process of approximately Rs. 852 Crore as on January 31, 2026. The current pipeline, including L1 positions, provides adequate medium-term revenue visibility, subject to timely execution and order conversion

• Moderate operating profitability in the first full year of operations :

  In FY2025, the company reported total operating income of Rs. 179.99 Cr with OPBDIT of Rs. 16.78 Cr, translating into an operating margin of 9.32%. Profit after tax stood at Rs. 11.06 Cr, reflecting a net margin of 6.14%. Profitability is considered moderate for an EPC contractor and is supported by the company’s selective bidding strategy and focus on irrigation projects with relatively better margins. Sustenance of margins at current levels while scaling up operations will remain a key monitorable

• Flexible capital structure supported by promoter funding and corporate migration :

  The capital structure is supported by around Rs. 60.13 crore of non-interest-bearing promoter unsecured loans and minimal term debt, providing financial flexibility. Further, migration to the private limited structure in FY2025 enhances eligibility for larger tenders, improves institutional credibility, and is expected to support scalability as the entire execution pipeline shifts to the company from FY2026 onwards.

Credit Risks:

• Moderate liquidity with negative operating cash flows and a leveraged reported position :

  The company reported a negative operating cash flow of Rs. 114.93 Cr in FY2025. Reported Total Debt to Tangible Net Worth remains high at 6.37 times due to modest net worth. The reported tangible net worth of Rs. 0.20 crore remained modest due to the company’s recent incorporation, resulting in an elevated Total Debt/TNW of 6.37x. On an analysed basis, tangible net worth improved to Rs. 0.80 crore, moderating leverage to 0.84x.Sustained improvement in cash flows and net worth accretion going forward

• Working capital-intensive operations with stretched cycle :

  The EPC business remains inherently working capital-intensive due to milestone billing, the absence of mobilisation advances, and retention deductions. In FY2025, Receivable days of 139 and inventory days of 68 remain elevated, though partly offset by elongated payable days of 371. Although working capital limits are highly utilised, promoters ability to infuse capital provides comfort. BWR notes that the promoter has a lien marked Fd worth 100 crores for a BG worth. Further, the BG limits are enhanced and would enable them to release this margin money, which would enable liquidity support if required

• Exposure to government counterparties and payment delays :

  The company derives the majority of its revenue from state irrigation departments, exposing it to risks of delayed payment releases linked to budgetary allocations and administrative processes. Execution pace may be affected by such delays, despite relatively strong counterparty credit profiles.

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Positive Sensitivities 

Strengthening of financial risk profile, with Total Debt/TNW and TOL/TNW below 1.50x, while maintaining the current rate of growth and margins profile

Negative Sensitivities 

Weakening of operating performance, evidenced in degrowth of revenue and profitablity or any further elongation in the working capital cycle or an increase in TOL TNW above 5.00X.

LIQUIDITY INDICATORS - Adequate

The liquidity profile of KDH Infra remains adequate, supported by healthy cash accruals. The company maintained cash and bank balances of Rs. 0.05 crore as on March 31, 2025. Average working capital utilisation stood at about 93.34% during the 12 months ended January 2026. Enhancement of the banking facilities, as well as the promoter's ability to infuse funds, is likely to support liquidity. The company has projected to infuse 60.13 Crore as unsecured debt, and its ability to increase this is supported by the 100 cr FD against which the company has used a BG of 51.00 Crore.

Net cash accruals of Rs. 11.17 crore in FY2025 are sufficient to cover modest scheduled debt repayments of approximately Rs. 0.60 crore in FY2026. Liquidity is further supported by unsecured loans of around Rs. 60.13 crore from directors and an adequate current ratio of 6.60 times in FY2025, providing reasonable near-term financial flexibility.

Nevertheless, in view of the company’s expanding scale of operations, sizeable executable order book, and continued reliance on bank guarantees and security deposits typical of EPC contractors, sustained working capital discipline and timely enhancement of banking limits will remain key liquidity monitorables over the medium term

ABOUT THE ENTITY

Mr Kampli Dodda Hanumanthappa commenced operations through a proprietorship concern in June 2004, primarily undertaking civil engineering works, including irrigation projects, construction of tanks, canals, and related infrastructure. Leveraging over two decades of experience in the EPC sector, the promoter has developed strong execution capabilities and long-standing associations with key Government entities such as Karnataka Neeravari Nigam Limited (KNNL), Visvesvaraya Jala Nigam Limited (VJNL), and Krishna Bhagya Jala Nigam Limited (KBJNL), all of which possess sound credit profiles. In July 2023, the promoter incorporated KDH Infra Engineering Private Limited to consolidate and scale operations under a corporate structure. The private limited entity completed its first full year of operations in FY2025, and from FY2026 onwards, all project execution and order inflows are being undertaken exclusively through the company.

ESG Profile

Environmental: The company contributes to environmental sustainability through the construction of irrigation systems, canals, and tanks, which are vital for efficient water management and groundwater recharge. Its projects help mitigate the impact of droughts and promote sustainable agricultural practices across Karnataka. During execution, the company adheres to state-level environmental regulations regarding site management and resource conservation.

Social: KDH Infra plays a significant role in rural development by providing infrastructure that secures the livelihoods of farming communities. The company supports local employment by hiring labor for project sites and maintains essential safety and welfare standards for its workforce. Its activities foster regional economic growth and improve water accessibility in underserved areas.

Governance: The transition from a proprietorship to a private limited structure in FY2025 marks a positive step toward institutionalizing the business and enhancing financial transparency. While the company is closely held by the promoter group, it maintains a disciplined capital structure supported by interest-free promoter funding. Future governance focus remains on the full consolidation of business assets and further strengthening of independent oversight.

ESG Summary

KDH Infra maintains a adeqaute ESG profile, underpinned by the high social utility of its irrigation projects and a clear path toward corporate formalization. While its environmental impact is largely positive due to water conservation efforts, the company continues to refine its governance framework and asset alignment to support long-term sustainability and transparency.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)
Operating Revenue	Rs.Crs.	Not Available	Not Available	179.99
EBITDA	Rs.Crs.	Not Available	Not Available	16.78
PAT	Rs.Crs.	Not Available	Not Available	11.06
Tangible Net Worth	Rs.Crs.	Not Available	Not Available	6.37
Total Debt / Tangible Net Worth	Times	Not Available	Not Available	8.22
Current Ratio	Times	Not Available	Not Available	1.36

KEY COVENANTS OF THE FACILITY RATED

The terms of the sanction include standard covenants typically required 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  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	58.78	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	LT	55.00	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		113.78	(Rupees One Hundred Thirteen Crores and Seventy Eight lakhs Only)

*** The facility's maturity profile extending beyond 12 months necessitates the assignment of a Long-Term Rating, as short-term scales are reserved for instruments with tenors of one year or less .

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Engineering Procurement and Construction

Analytical Contacts
Vedant Nitin Tokekar Ratings Analyst vedant.t@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	Karnataka Bank Ltd	Term Loan - Sanctioned	3.78	_	3.78	Simple##
2	Karnataka Bank Ltd	Over Draft - Sanctioned	25.00	_	25.00	Simple##
3	Karnataka Bank Ltd	Bank Guarantee - Sanctioned	55.00	_	55.00	Simple##
4	Karnataka Bank Ltd	Demand Promissory Note - Sanctioned	30.00	_	30.00	Simple##
Total			113.78	0.00	113.78
TOTAL (Rupees One Hundred Thirteen Crores and Seventy Eight lakhs Only)

* The facility's maturity profile extending beyond 12 months necessitates the assignment of a Long-Term Rating, as short-term scales are reserved for instruments with tenors of one year or less

## 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.