Rating Rationale

Brickwork Ratings has assigned the long-term and short-term rating at BWR BBB-/Stable/A3+ for the bank loan facilities of Orient Constructions Pvt Ltd. The rating has factored in the directors' vast experience in the business with a long track record of operations, a well-established client relationship, efficient working capital management and a moderately stable financial profile. However, the rating is constrained by decline in revenue, lesser profit margins, and inherent risk associated with tender based business operations. Going forward, the ability of the company to improve its revenue & profitability margins would be key rating sensitivities. The rating outlook has been assigned as "Stable" as BWR believes that Orient Constructions Private Limited business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

Standard Covenants Applicable

• Established Track Record and Experienced Management :

  Started initially as a partnership firm in 1993 before converting into a private limited entity, Orient Constructions Private Limited (OCPL) brings around four decades of operational expertise in civil construction. Key promoter Mr. Ashok Kumar Jalan also possesses over 40 years of industry experience. This extensive background and established presence should continue to support OCPL’s business profile over the medium term.

• Financial Risk Profile :

  OCPL’s financial risk profile is supported by a growing net worth, low leverage, and comfortable debt coverage metrics. Tangible net worth rose to Rs. 44.66Crs. as of March 31, 2026 (FY2025: Rs. 42.92Crs.), backed by profit retention. Capital structure remains conservative with a gearing of 0.14x in FY26. Current ratio stood moderate at 3.12x in FY26. Coverage metrics were adequate, with an Interest Service Coverage Ratio (ISCR) of 3.95x and a Debt Service Coverage Ratio (DSCR) of 1.36x in FY26. With no major debt-funded capital expenditure planned, the financial profile is expected to remain stable over the near to medium term.

• Revenue Contraction and PAT margin :

  The top-line dropped to Rs. 101.53Crs. in FY26 from Rs. 119.27Crs. in FY25. Performance improved in 4M FY27, with revenue recorded at Rs. 35.15Crs. As of July 31, 2026, the unexecuted order book stood at Rs. 175.19Crs. (~1.72x of FY26 revenue), indicating medium-term growth visibility. Additionally, PAT margins have remained range-bound at 1.6%–1.9% over the past three fiscal years.

• Fragmented, Highly Competitive, and Tender-Driven Industry :

  Civil construction is highly fragmented, with intense competition from several mid-to-large-sized regional and national players. Since business acquisition depends on tender bidding, competitive pricing pressures can squeeze operating margins. However, OCPL’s three-decade presence in this domain helps partially offset these competitive headwinds.

Positive Triggers – For Upgrade

• Sustained improvement in the scale of operations, with Total Operating Income exceeding Rs. 120Crs, along with an improvement in net profit margin above 2.5%.

• Improvement in working capital management, leading to a satisfactory cash conversion cycle.

Negative Triggers – For Downgrade

• Decline in the scale of operations, with Total Operating Income falling below Rs. 90Crs.

• Deterioration in profitability, with net profit margins declining below 1%

• Deterioration in the working capital cycle and liquidity position, reflected through weakening debt protection metrics.

The company's adequate liquidity is characterized by healthy current ratio and sufficient cash accrual for servicing debt. For FY26 the cash accrual stands at  Rs. 4.26Crs. against the CPLTD of Rs. 0.84Crs. and in FY27, the Net cash accrual is projected at Rs. Rs. 6.98Crs. The cash & bank balance stands at Rs. 9.94Crs. in FY26. The liquidity is marked by a healthy Current Ratio of 3.12x in FY26 and projected at which reflects a healthy liquidity position of the company to serve future short term liabilities with the current assets. The working capital limits has been utilized at the extent of 30% providing sufficient headroom for the future operational requirements. 

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

Environmental: Environmental risks in EPC projects are driven by construction-site impacts, high resource consumption, waste generation, and operational emissions, making disclosures on water consumption, site restoration and rehabilitation measures, construction and demolition (C&D) waste management practices, energy consumption and carbon reduction targets and strategies particularly important. Compliance with environmental regulations and any past violations or penalties also provide critical insight into environmental performance.

Social: Social considerations focus on workforce health and safety for both permanent and contractor staff, adherence to labor laws (Compliant), safety performance, and training or human capital development programs. Diversity and community engagement initiatives, including resettlement or livelihood support, reflect the company’s commitment to social responsibility.

Governance: Governance assessment emphasizes board independence, diversity, and effectiveness of risk management frameworks and robustness of compliance and ethics programs. Project-level governance, including ESG risk assessments, subcontractor and supplier oversight, permit and regulatory compliance, ESG reporting, and emergency preparedness or incident management plans, is also a key factor in evaluating overall governance strength

Orient Construction Pvt. Ltd. (OCPL) is an Odisha-based civil construction firm that primarily executes road and bridge projects for state government departments and public sector agencies. Over the years, the company has built a proven track record in completing public infrastructure works across Odisha.

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 an institutional investor in Brickwork.

Brickwork 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, Securitisation Products, Municipal Bonds, etc. BWR has also rated NGOs, Educational Institutions, Hospitals, Urban Local Bodies and Municipal Corporations.

Nature of Ratings & Information: BWR ratings are opinions on the relative ability of an entity/instrument to meet its financial obligations and are based on information obtained from issuers and other sources believed to be reliable. BWR does not conduct audits, due diligence, or independent verification of such information and does not guarantee its accuracy, adequacy, or completeness.Ratings are current only as of the date of publication and may be revised based on new or unavailable information.

No Advice or Recommendation: Ratings, reports, and related communications are not investment advice and do not constitute recommendations to buy, sell, or hold securities, or to sanction, renew, or disburse credit facilities. They do not represent offers or solicitations for any transaction. Users must rely on their own independent judgment and professional advice. Access to or use of these materials does not create any client relationship with BWR.

Liability, Usage & Regulatory Framework: This content is published for the purpose of dissemination of information as required under applicable laws and regulations. BWR holds exclusive copyright over the content. It may be used with appropriate credit to BWR, provided that the content is not altered or modified in any way that could change its meaning or intent. BWR retains the exclusive right to distribute or share its rating rationales, directly or indirectly, through any print, digital, or electronic media. All reports are provided on an "as is" basis without warranties of any kind, express or implied, including but not limited to merchantability, fitness for a particular purpose, or non-infringement. BWR and its affiliates shall not be liable for any direct, indirect, incidental, or consequential losses or damages arising from the use of these reports. Ratings are subject to continuous surveillance and may be revised, suspended, or withdrawn at any time without notice. These reports are intended for use within India only. BWR operates under SEBI Regulations and Code of Conduct.

For more information on policies and ratings, please visit our www.brickworkratings.com