The company has an unexecuted order book of around ~ Rs. 289 Cr, which provides revenue visibility over the medium term. The existing order book is expected to support the company’s revenue generation over the near to medium term, subject to the timely execution of projects.
RATING RATIONALE
30Mar2026
South East Constructions Company Pvt. Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 63.00 Crs. of South East Constructions Company Pvt. Ltd.
Particulars| Facilities** | Amount(Rs.Crs.) | Tenure | Rating# | |
|---|---|---|---|---|
| Fund Based | 28.00 | Long Term |
BWR BBB -
/Stable Assignment |
|
| Non Fund Based | 35.00 | Long Term |
BWR BBB -
/Stable Assignment |
|
| (10.00) | Short Term |
BWR A3
Assignment |
||
| Grand Total | 63.00 | (Rupees Sixty Three Crores Only) | ||
**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 BBB- (Stable) and a short-term rating of BWR A3 to the bank facilities aggregating to Rs 63.00 crore of South East Constructions Company Pvt. Ltd.The rating reflects the company’s established presence in the irrigation and infrastructure EPC segment, steady improvement in scale of operations, a comfortable unexecuted order book of around Rs. 289 crores as on 31st Jan 2026 providing medium term revenue visibility, and improvement in profitability and debt coverage indicators. The rating also factors in the company’s moderate capital structure with reduced debt levels and an adequate liquidity position. However, the rating is constrained by the working capital-intensive nature of operations, marked by high receivables and retention money, moderate customer concentration towards government departments, and exposure to risks associated with joint venture execution.
The stable outlook reflects BWR’s expectation that the company will continue to maintain its operational performance supported by its healthy order book, stable execution capabilities, and expected sustenance of operating margins in the range of 14–15%. The outlook also factors in improvement in profitability and debt protection metrics, along with adequate liquidity. However, it remains sensitive to the company’s ability to manage its working capital cycle and the timely realisation of receivables.
KEY RATING DRIVERSCredit Strengths:
-
Experienced promoters with a long track record in the construction sector :
SECCPL is promoted by Mr. Muvva Padmaiah, who has over four decades of experience in the civil construction sector, and is supported by Mr. Muvva Mahesh Babu and Mr. Muvva Ajay Babu, both qualified civil engineers with significant experience in infrastructure projects. The promoters’ long presence in the sector has enabled the company to develop execution capabilities and maintain relationships with government departments.
-
Comfortable Credit Profile
:
The credit profile of South East Construction Company Pvt. Ltd. (SECCPL) is moderate, supported by comfortable leverage levels and adequate debt protection metrics. The company reported operating income of Rs. 106.87 Cr in FY25 with EBITDA of Rs. 16.41 Cr and EBITDA margin of 15.36%. The tangible net worth stood at Rs. 39.65 Cr in FY25, while the total debt stood at Rs. 27.24 Cr, resulting in a Total Debt/TNW of 0.69x, indicating relatively low leverage. The TOL/TNW also remained moderate, reflecting a balanced capital structure. The company’s debt servicing indicators remained adequate, with an ISCR of 2.16 times and a DSCR of 1.41 times in FY25, supporting its ability to meet debt obligations from operating cash flows. The same is expected to improve going forward, given the negligible term debts.
-
Healthy Order Book Position indicating medium term revenue visibility :
-
Moderate scale of operations :
Despite a long operational track record, the company’s scale of operations remains moderate, with revenue of around Rs. 106.87 crore in FY25, which may limit its ability to compete with larger EPC contractors for high-value infrastructure projects. Also, limiting its bargaining power with suppliers and its ability to absorb execution-related shocks.
-
Customer, Sector and Geographical Concentration :
A significant portion of the company’s revenue is derived from state government departments, primarily in the water and irrigation segment, exposing the company to risks related to delays in project approvals, fund releases, and payment cycles typical of government contracts. Further, as per the current order book, a large share of projects is concentrated in Jharkhand, leading to geographical as well as sector concentration risk. Any slowdown in government spending, policy changes, or delays in project execution in the region may adversely impact the company’s business performance and cash flows.
-
Exposure to Tender-Based Operations and Working Capital Intensity :
The company’s revenue profile remains entirely dependent on tender-based contracts, making its growth contingent upon its ability to secure new orders in a competitive bidding environment. This exposes the company to risks related to order inflow volatility and pricing pressures. Further, the company operates with an elongated working capital cycle, which stood at around 209 days in FY’25 (improved from 269 days in FY’24), primarily driven by high levels of work-in-progress, security deposits, and retention money inherent in EPC contracts. Although the working capital cycle is expected to improve with the realisation of retention money from completed projects, efficient management of working capital remains a key monitorable.
For arriving at its ratings, BWR has considered the standalone approach for the Company. BWR has applied its rating methodology as detailed in the rating criteria detailed link mentioned below (Hyperlinks provided at the end of this rationale)
RATING SENSITIVITIES
Positive Sensitivities:
- Increase in scale of operations with operating income improving to above Rs. 175 Cr on a sustained basis while maintaining EBITDA margin of around 14% or higher.
- Improvement in capital structure, with TOL/TNW improving below 0.50x on a sustained basis.
Negative Rating Sensitivities
- Declining operating performance and margin or stretch in working capital cycle leading to deterioration of TOL/TNW above 2.50x.
The company’s liquidity position is adequate, supported by the availability of cash and cash equivalents of Rs. 5.40 Cr as on 31-03-2025. The company is also expected to generate cash accruals of around Rs. 9.00 Cr in the current year, which are sufficient to meet its scheduled debt repayment obligations of around Rs. 1.42 Cr. The current ratio stood at 1.82x in FY25, indicating an adequate working capital position. Additionally, the promoters have demonstrated financial support through the infusion of unsecured loans in the past, which provides an additional liquidity cushion during periods of financial stress.
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Industrials | Construction | Construction | Civil Construction |
South East Construction Company Pvt. Ltd. (SECCPL) was initially established as a partnership firm in 1978 under the leadership of Shri M. Padmaiah, with support from his sons, M. Mahesh Babu and M. Ajay Babu. The firm was later incorporated as a private limited company in 2005. The company undertakes infrastructure and heavy civil construction projects across sectors, including bulk earthworks, irrigation projects, road and railway infrastructure, open-cast mining, ports, environmental works, and urban water supply and sewerage networks. Over the years, SECCPL has executed several complex projects for both public and private sector clients, including reputed organisations such as Larsen & Toubro, GVR Infra Projects Ltd., the Road Construction Department, and South Eastern Railways.
The company demonstrates an evolving ESG profile based on its environmental, social, and governance practices.
Environmental: Environmental risks in construction projects mainly arise from site activities, use of resources, waste generation, and emissions during project execution. The company generally follows environmental regulations and standard construction practices for issues such as site restoration and construction and demolition (C&D) waste management. However, detailed disclosures on water consumption, energy usage, and carbon reduction targets are limited. There are no major environmental violations reported, based on available information.
Social: Social aspects mainly relate to worker health and safety and compliance with labour laws at project sites. The company follows applicable labour regulations and basic safety practices during project execution. However, formal disclosures on safety performance, employee training, and workforce diversity are limited. Community-related activities, such as support required during project execution, are generally carried out as per project requirements.
Governance: The company is promoter-managed, with key decisions taken by experienced promoters and directors. It follows basic regulatory and compliance requirements in its operations. However, formal disclosures regarding board independence, risk management frameworks, and structured ESG reporting are limited.
The company appears to follow basic regulatory requirements, but formal ESG policies and detailed disclosures are still developing
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 22 - 23 (Audited) |
FY 23 - 24 (Audited) |
FY 24 - 25 (Audited) |
|---|---|---|---|---|
| Operating Revenue | Rs.Crs. | 130.84 | 94.12 | 106.87 |
| EBITDA | Rs.Crs. | 21.93 | 8.25 | 16.41 |
| PAT | Rs.Crs. | 8.25 | 0.24 | 6.04 |
| Tangible Net Worth | Rs.Crs. | 33.37 | 33.60 | 39.65 |
| Total Debt / Tangible Net Worth | Times | 1.73 | 1.50 | 0.69 |
| Current Ratio | Times | 1.89 | 1.82 | 1.82 |
The terms of the sanction includes 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 | 28.00 |
BWR BBB-/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Non Fund Based | LT | 35.00 |
BWR BBB-/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (10.00) |
BWR A3
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 63.00 | (Rupees Sixty Three Crores Only) | |||||||
- General Criteria
- Approach to Financial Ratios
- Short Term Debt
- Engineering Procurement and Construction
| Analytical Contacts | |
|---|---|
|
Anjali Singh Senior Rating Analyst anjali.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 |
South East Constructions Company 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 | State Bank Of India (SBI) | Cash CreditSanctioned | 15.00 | _ | 15.00 | Simple## |
| 2 | Union Bank of India | Bank GuaranteeSanctioned | 35.00 | _ | 35.00 | Simple## |
| Sub-Limit (Inland LC) Sanctioned | (10.00) | |||||
| 3 | Union Bank of India | Cash CreditSanctioned | 13.00 | _ | 13.00 | Simple## |
| Total | 63.00 | 0.00 | 63.00 | |||
| TOTAL (Rupees Sixty Three 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 |
Print and Digital Media
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.
About Brickwork RatingsBrickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,560 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner.
Disclaimer
Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.
BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).
BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.
The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.
BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.
BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.
Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.
BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.
BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.
This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.
BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.