Rating Rationale

Brickwork Ratings assigns the long-term and short-term ratings of "BWR BBB-/Stable" and "BWR A3" for the Bank Loan Facilities of Rs. 110.00 Crs. for Hutni Projekt FM (India) Pvt. Ltd.    

The ratings are supported by the company’s experienced promoters, Mr. Chetan Sangani and Mrs. Geeta Sangani, who bring a proven operational track record of over two decades in the specialized EPC segment. The company's comprehensive operational portfolio consists of turnkey construction, complete design, and technology management specifically for coke oven plants and related heavy industrial chemical complexes. Additionally, the company leverages specialized core engineering expertise, patents, and eco-friendly technologies from its Czech parent company, Hutni Projekt Frydek-Mistek a.s. The company maintains an established, highly focused base of premium clients, featuring top-tier public sector undertakings and domestic private corporate leaders such as Steel Authority of India Limited (SAIL), Tata Steel, NMDC, and RINL.

The rating outlook is assigned as “Stable,” reflecting BWR’s expectation that Hutni Projekt FM (India) Pvt. Ltd. business risk profile will remain steady over the medium term. A stable outlook indicates a low probability of a rating change during this period. The outlook may be revised to “Positive” if the company achieves sustained improvement in revenue and profitability margins, while it may be revised to “Negative” in the event of a deterioration in its financial risk profile.

The key covenants are the standard terms as stipulated in the sanction letters of the rated facilities.

• YOY increasing Tangible Net Worth :

  The Tangible Net Worth (TNW) of the company has been significantly increasing on a Y-O-Y basis and stood at an impressive Rs. 32.86 Crores in provisional FY26 as compared to Rs. 11.32 Crores in FY25. Furthermore, the increase in TNW to Rs. 33.34 Crores in FY26 represents a 189% year-over-year growth. This spike in TNW was primarily driven by the retention of net profits into reserves, coupled with significant formal capital infusions by the promoters; the paid-up share capital was increased from a mere Rs. 1 Lakh in FY24 to Rs. 1.00 Crore in FY25, and subsequently to Rs. 8.00 Crores in FY26.

• Strong and Reliable Client Base :

  The order book is primarily supported by large, government-backed Public Sector Undertakings (PSUs) and major steel manufacturers, including SAIL (Rourkela Steel Plant), NMDC, and Vishakhapatnam Steel Plant. Working with highly capitalized, state-backed clients significantly lowers the counterparty credit risk. While payment cycles can occasionally be slow, the risk of a client defaulting or going bankrupt during a project is very low.

• Environmental Compliance and ESG Capabilities :

  Heavy industrial clients face increasingly strict environmental regulations and emission limits. The company’s specialization in environmental retrofitting, such as desulphurization systems, dust reduction technology, and Zero Liquid Discharge (ZLD) wastewater treatment, creates a strong competitive moat. Because clients must comply with regulatory mandates to avoid fines or operational shutdowns, this creates a steady, resilient demand for plant upgrades even during broader economic slowdowns.

• Project Execution and Cost Risks :

  As an EPC  contractor, the company is highly exposed to execution challenges. Projects can be delayed by supply chain disruptions, labor issues, or regulatory bottlenecks. Because many of these contracts are negotiated at a fixed price, any unexpected increase in raw material costs or construction delays must be absorbed by the company, which can severely reduce profit margins.

• Contingent Liability Exposure :

  To secure large contracts, the company is required to provide significant Bank Guarantees, including advance payment and performance guarantees. These act as off-balance-sheet liabilities. In the event of a contractual dispute or a delayed milestone, the client has the right to encash these guarantees. If this occurs, it could trigger an immediate and severe liquidity drain for the business.

Going forward, the company’s ability to manage working capital efficiently, improve the scale of operations, and improve and maintain profitability, along with the debt servicing capability and liquidity, will be key rating-sensitive.

Upward Factors :

• A rating upgrade could be driven by achieving sustained growth in revenues as per the projections, along with consistent improvement in profitability margins, with the operating margin rising above 25% on a sustained basis.
• Timely execution of orders, along with a consistent increase in the order book.

Downward Factors :

• A rating downgrade may be triggered by an inability to achieve the projected revenue and profit growth, with the operating margin dropping below 25%. An increase in Total Debt/TNW above 1.00x wouldindicate higher leverage risk.
• Higher receivables or excess inventory can negatively affect liquidity.

Adequate liquidity characterized by sufficient cushion in accruals vis-à-vis repayment obligations. No Capex is envisaged in the near future. Its bank limits are utilized to the extent of 21.61 percent on average, and have sought enhancement in bank lines, supported by the above unity current ratio.

The Current Ratio of the company stood comfortably at 2.08 times in FY 26. Debt protection metrics remained adequate with ISCR at 124.06 times and DSCR at 127.33 times in FY 26. The Cash and Bank balance of the company is at Rs. 78.83 Crores as per FY26 provisionals, out of which Rs. 50.07 Crores is encumbered and Rs. 9.94 Crores is Unencumbered. The company's EBITDA stood at Rs 15.26 Crores in FY 26 provisional financials against interest and finance charges of Rs 0.12 Crores. The EBITDA level remained more than adequate to service the interest obligations year on year. The tangible net worth of the company stood at Rs 32.86 Crores in FY 26. Hence, the liquidity position of the company is adequate.

The company demonstrates an Adequate ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks in construction projects include site impacts, resource use, and localized emissions. The company manages these risks by using eco-friendly technologies from its European parent company to reduce waste and lower emissions. It strictly follows environmental laws and specializes in building critical green infrastructure, such as industrial effluent treatment plants. Furthermore, the company maintains a clean regulatory record with no reported environmental violations.

Social: Social performance relies on following labor laws, ensuring worker safety, and building strong community relations. The company protects its workforce by enforcing strict safety standards during complex plant operations and shutdowns. It relies on highly qualified engineers and technical support teams to ensure stable and secure operations. The firm successfully manages local community relations by focusing on safe, high-quality, and on-time project delivery across various industrial regions.

Governance: Corporate governance focuses on board effectiveness, technology integration, and strong risk management. The company aligns its operations with the high engineering standards of its international parent company. Active executive leadership ensures quick decision-making and strict compliance at the project level. Additionally, the firm safely manages its global supply chains and project risks using robust multiple-banking credit facilities.

HUTNI PROJEKT FM (INDIA) PRIVATE LIMITED, founded in 2016 with its headquarters in Kolkata, serves as the dedicated Indian subsidiary of the prominent Czech technology provider, Hutni Projekt Frydek-Mistek a.s. Operating as a specialized EPC (Engineering, Procurement, and Construction) contractor on a turnkey basis, they specialize in turnkey construction, engineering, and technology management, specifically for coke oven plants and related industrial complexes. Mr. Chetna Sangani and Geetha Sangani are the directors of the company, having an experience over two decades 

The Complexity Indicator refers to the ease with which the returns associated with the rated instrument could be estimated. It does not indicate the risk related to the timely payments on the instrument, which is rather indicated by the instrument's credit rating. It also does not indicate the complexity associated with analysing an entity's financial, business, industry risks or complexity related to the structural,transactional or legal aspects. Details on the complexity levels of the instruments are available on BWR's website Complexity Levels.

Not Applicable

BWR Board of Directors have no influence over rating decisions, nor do they sit on the rating committee or review, discuss or evaluate any credit rating during the Board meetings.

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI]. BWR is the 5th agency to get a credit rating registration in India in 2009 and its corporate office in Bengaluru. It has a country-wide presence with representatives in 150+ locations. Canara Bank is our institutional investor.

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