P.VENKATA RAMANAIAH ENGINEERS & CONTRACTORS PRIVATE LIMITED

Brickwork Ratings has assigned long-term and short term rating for the Bank Loan Facilities of Rs. 146.33 Crs. of P.VENKATA RAMANAIAH ENGINEERS & CONTRACTORS PRIVATE LIMITED

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	36.33	Long Term	BWR BB + /Stable Assignment
Non Fund Based	110.00	Short Term	BWR A4 + Assignment
Grand Total	146.33	(Rupees One Hundred Forty Six Crores and Thirty Three 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 assigned a Long-Term rating of BWR BB+ (Stable) and a Short-Term rating of BWR A4+  for its bank loan facilities of Rs. 146.33 crore of P.Venkata Ramanaiah Engineers & Contractors Private Limited (PVRECPL)

The rating assignment reflects the extensive experience of the promoter group (led by Mr. P. Sreedhar) in the EPC segment and their established track record. The rating is fundamentally supported by a robust unexecuted order book of Rs. 975.79 Cr. 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 Andhra Pradesh and Maharashtra state bodies.

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

KEY RATING DRIVERS

Credit Strengths:

• Experienced Promoters and Established Industry Relationships :

  PVRECPL benefits from the extensive experience of its promoters in the civil construction and railway infrastructure sectors. This expertise has enabled the company to build a strong reputation with central and state government agencies, including Central Railways and various Public Works Departments. This established market position is reflected in the company's ability to independently qualify for and execute complex structural projects, such as major bridges and broad-gauge conversions. These long-standing relationships provide a competitive edge in securing repeat contracts and navigating the technical requirements of large-scale infrastructure tenders

• Healthy Order Book Supporting Revenue Visibility :

  The company's business risk profile is supported by a robust unexecuted order book of Rs. 872.41 crore as of December 31, 2025. This provides a high revenue visibility ratio of approximately 5.8 times its FY25 turnover. The order book is diversified across railway and road EPC projects, which are high-priority infrastructure segments. Furthermore, the company has technically qualified for an additional pipeline of Rs. 483.01 crore, highlighting a steady expansion in its bidding eligibility. This healthy pipeline ensures a stable operational runway and supports the projected revenue growth of 18.77% in FY26. PVRECPL’s Total Operating Income (TOI) moderated to Rs. 168.76 crore in FY25, down from Rs. 230.62 crore in FY23. This consolidation follows the completion of legacy projects and a strategic shift toward technically complex contracts with Central Railways and NHAI. Revenue visibility remains strong, underpinned by a robust unexecuted order book of Rs. 975.79 crore as of early 2026, which supports a projected recovery to Rs. 221.03 crore by FY27. Despite the moderated top-line, the company’s EBITDA margin improved significantly from 12.55% in FY23 to 15.72% in FY25. This accretion is driven by the internalization of project execution through a specialized machinery fleet, reducing reliance on high-cost rentals and subcontractors. Absolute EBITDA stood at Rs. 26.53 crore in FY25 and is projected to reach Rs. 37.43 crore by FY27 as high-value projects scale up. The Net Profit (PAT) was Rs. 9.56 crore in FY25, representing a margin of 5.67%. While absolute profit moderated slightly due to higher interest and depreciation from recent CAPEX, the net margin remained resilient. Looking ahead, PAT is projected to scale to Rs. 18.32 crore by FY27 (8.29% margin), supported by expanding operating profits and a reduced interest burden as the company enters a deleveraging phase

• Moderate Operating Profitability and Improving Margins :

  The company has demonstrated a resilient profitability profile despite the revenue moderation observed in the last two years. The operating margin (OPBDIT) has exhibited an upward trend, improving from 12.55% in FY23 to 15.72% in FY25. PVRECPL’s capital structure is anchored by its Tangible Net Worth (TNW), which has grown steadily from Rs. 69.84 crore in FY23 to Rs. 90.80 crore in FY25 (Audited). This growth, primarily driven by the consistent retention of internal profits, provides a solid equity base to support technically complex EPC projects. Looking ahead, the TNW is projected to reach Rs. 124.01 crore by FY27, representing a compounded annual growth rate that significantly enhances the company's risk-absorption capacity. The company’s Total Debt stood at Rs. 93.33 crore in FY25, resulting in a gearing ratio (TD/TNW) of 1.03x, a localized peak compared to 0.74x in FY23. This moderate increase was strategically driven by debt-funded capital expenditure for specialized construction machinery required for high-margin railway and bridge projects, allowing for internal execution rather than expensive rentals. As the entity enters a repayment phase, total debt is projected to decrease to Rs. 71.83 crore in FY26 and Rs. 62.80 crore by FY27. Consequently, the gearing is expected to improve significantly to 0.51x by FY27, reflecting a much stronger capital structure. The TOL/TNW ratio has demonstrated a largely improving trend, moderating from 1.93x in FY23 to 1.71x in FY25. This indicates that while the company has expanded its operations, it has simultaneously strengthened its equity base. This ratio is projected to further decline to 1.28x by FY27, reflecting a decreasing reliance on external liabilities.

Credit Risks:

• Working Capital Intensity and Operational Stretch :

  The company’s operations are inherently working capital-intensive, with a conversion cycle that is projected to reach 99 days by FY27. This stretch is primarily driven by an increase in inventory days (projected at 191 days) as the company manages multiple large-scale projects simultaneously. While the current receivable aging is healthy, with over 95% of debtors under 90 days the overall liquidity remains sensitive to the pace of project execution and the timely certification of running bills

• Exposure to Government Counterparties and Payment Delays :

  PVRECPL’s performance is highly sensitive to the budgetary allocations and payment cycles of state and central government agencies. The company has historically faced challenges in recovering pending dues from state-executed projects, with approximately Rs. 40 crore in outstanding bills linked to previous political shifts in Maharashtra. While the situation is improving, the full recovery of legacy dues, including Rs. 13-14 crore from Andhra Pradesh, remains a key monitorable. Any further administrative or political volatility in its primary operating regions could lead to renewed payment delays and impact the company's overall liquidity and rating trajectory.

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 

Significant increase in the scale of operations, characterized by the timely completion of high-value railway and structural projects while maintaining EBITDA margins above 16%. A substantial improvement in the liquidity profile, evidenced by the successful navigation of the FY26 repayment hump and the maintenance of a DSCR consistently above 1.50x, would also be a key driver for an upward rating revision.

Negative Sensitivities 

Weakening of operating performance, evidenced in the degrowth of revenue and profitability, or any further stretch in the working capital cycle, particularly due to delays in recovering retention money or legacy dues from government authorities

LIQUIDITY INDICATORS - Adequate

PVRECPL’s liquidity position is supported by consistent internal accruals and a disciplined approach to capital management. The company generated Gross Cash Accruals (GCA) of Rs. 17.58 crore in FY25, providing a comfortable buffer against its debt-servicing obligations. This debt-servicing capability is underpinned by a healthy Current Ratio of 1.62x, which reflects satisfactory short-term solvency and a well-structured balance sheet for the EPC sector. The company maintains a functional liquidity buffer, with cash and cash equivalents totaling Rs. 5.14 crore as of March 31, 2025. While the fund-based working capital limits have seen high utilization during peak mobilization phases, averaging 82% to 95% over the last 12 months, the company retains sufficient headroom within its drawing power to manage routine operational contingencies. This cushion, although lean, is strategically managed to meet the mobilization requirements of upcoming large-scale projects without necessitating immediate additional leverage. The liquidity floor is further reinforced by a moderating leverage profile and the steady release of internal accruals. However, the overall liquidity remains sensitive to the working-capital-intensive nature of government contracts. In this context, the timely certification of bills and the realization of receivables (specifically the recovery of retention money and legacy dues) remain critical monitorables to ensure uninterrupted cash flow and to maintain the projected debt-coverage metrics.

ABOUT THE ENTITY

P. Venkata Ramaniah Engineers & Contractors Private Limited (PVRECPL) is an ISO 9001:2015 certified EPC contractor established in 2002. P.Venkata Ramanaiah Engineers & Constructions Private Limited, is a private limited company incorporated under the companies act,2013 on 23/01/2019, with it registered office at Hyderabad, Telangana, India. By converting the existing partnership firm P.Venkata Ramanaiah & Co, Which was existence upto 23/01/2019.  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.  PVRECPL, Deliver end‑to‑end EPC and turnkey civil works including major and minor bridges, ROBs, gauge conversion, earthworks, canal construction and road rehabilitation. Execute projects for central and state agencies, including railways, state water resources departments and public works departments. Mr. P. Sreedhar serves as the Managing Director of PVRECPL.  Under his leadership, the company has undertaken and completed several major works for esteemed government departments and organizations, including the Madhya Pradesh Water Resources Department, Andhra Pradesh Water Resources Department, National Highway Projects, Singareni Collieries, MRIDC, Central Railway, South Central Railway, and South Western Railway.

PVRECPL takes pride in consistently completing projects within the stipulated timelines, often ahead of schedule, while strictly adhering to prescribed norms, quality standards, and technical specifications. The company maintains strong and professional relationships with its clients and supervising authorities, which has resulted in repeat project allocations over the years.

ESG Profile

Environmental: The company contributes to environmental sustainability through the construction of turnkey civil works, including major and minor bridges, ROBs, gauge conversion, earthworks, and canal construction. During execution, the company adheres to state-level environmental regulations regarding site management and resource conservation.

Social: PVRECPL 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  in underserved areas.

Governance: The transition from a partnership to a private limited structure in FY2019 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.

PVRECPL  maintains a adeqaute ESG profile, underpinned by the high social utility of its projects and a clear path toward corporate formalization. While its environmental impact is largely positive due to construction 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.	170.98	168.79	200.44
EBITDA	Rs.Crs.	28.94	25.82	26.23
PAT	Rs.Crs.	12.59	9.39	9.56
Tangible Net Worth	Rs.Crs.	0.74	0.95	1.03
Total Debt / Tangible Net Worth	Times	1.93	1.67	1.71
Current Ratio	Times	1.22	1.56	1.62

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	36.33	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	110.00	BWR A4+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		146.33	(Rupees One Hundred Forty Six Crores and Thirty Three lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• 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	Bank of India	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
2	Canara Bank	Bank Guarantee - Sanctioned	_	110.00	110.00	Simple##
3	Canara Bank	GECL - Sanctioned	1.33	_	1.33	Simple##
4	Canara Bank	Cash Credit - Sanctioned	25.00	_	25.00	Simple##
Total			36.33	110.00	146.33
TOTAL (Rupees One Hundred Forty Six Crores and Thirty 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.