Rating Rationale

Brickwork Ratings has assigned a long-term rating of “BWR BBB-/Stable” and a short-term rating of “BWR A3” for the bank loan facilities of Rs. 67 Crs. of Raj Conbuild Ltd. (RCL).

The rating derives strength from the extensive experience of the promoters and management, an established operational track record in the construction industry, a comfortable capital structure, moderate debt coverage indicators, and a sustainable order book position providing adequate revenue visibility despite delays in project execution.

However, the rating is constrained by the highly competitive and tender-driven nature of the construction industry, inherent project execution risks, and the working capital-intensive nature of operations, resulting in an elongated operating cycle.

The rating outlook has been assigned as “Stable,” reflecting BWR’s expectation that the company’s business and financial risk profile will be maintained, supported by its execution capabilities and sustainable order book position.

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities. 

• Experienced Leadership and Strong Operational Track Record :

  RCL’s operations are managed by Rajiv Chaudhary and Anchal Chaudhary, who bring nearly two decades of experience in executing water supply contracts. They are supported by a team of qualified engineers, supervisors, and site technicians with relevant domain expertise. The company's established track record provides a strong understanding of market dynamics and has enabled it to buildlong-term relationships with both suppliers and clients.

• Comfortable Capital Structure and Moderate Debt Coverage Indicators :

  In FY26, the promoters infused Rs 3.73 crore as share capital and Rs 7.84 crore as share premium, strengthening the company’s capital structure. Consequently, the overall gearing ratio improved to 0.23x as of March 31, 2026, compared to 0.29x as of March 31, 2025. Backed by a low fund-based debt level, the company’s debt coverage indicators remained comfortable, with the interest coverage ratio standing at 4.56x for FY26.

• Substantial Order Book Position Despite Execution Delays :

  RCL maintains a strong unexecuted order book of ~Rs 519.33 crore as of September 2026, providing medium-term revenue visibility at~5.65x FY26 Total Operating Income (TOI). This includes fresh work orders worth Rs 421.75 crore secured in FY26, comprising Rs 177.27crore from the Delhi Jal Board (DJB) and Rs 244.48 crore from the Bihar government. However, project execution remains slow due to external factors such as delays in site handovers, land acquisition, rehabilitation, civil works, structural/design approvals, and environmental clearances from client departments.

• Highly Competitive Industry and Tender-Based Operations :

  RCL operates in an intensely competitive civil construction industry, characterized by low entry barriers and aggressive bidding from both organized and unorganized players. Since a majority of its revenue is derived from government and public sector undertakings(PSUs), business growth is heavily dependent on the company's ability to successfully bid for tenders and secure L1 (lowest bidder)status. Furthermore, operations remain exposed to policy shifts, geopolitical developments, and regulatory changes, which could impact project flow and government spending.

• Inherent Execution Delays and Working Capital Risk :

  Given the nature of civil infrastructure contracts, RCL remains exposed to inherent execution risks, including project delays stemming from pending regulatory clearances, design approvals, and land acquisition hurdles. Such delays can defer revenue realization and stretch working capital. Consequently, the company's ability to execute projects in a timely manner hinges on its operational efficiency and the prompt receipt of stage-wise payments from government clients.

• Working Capital Intensity & Elongated Operating Cycle :

  RCL’s operating cycle remained working capital intensive in FY26, marked by an elongated net cash conversion cycle of ~124 days(gross: ~153 days). This was predominantly driven by high collection periods, with debtor days deteriorating to 144 days (FY25: 134days) due to delayed clearance of running bills and milestone certifications by government counterparties. While projected to moderate to ~120 days in FY27, collection velocity remains a key monitorable. The stretched receivables were partially cushioned by a lean, just-in-time inventory holding of 9 days and expanded payable days of 29 days (FY25: 16 days), though timely stage-wise realizations remain critical to avert liquidity strain.

Positive 

• Improvement in scale of operations up to Rs 150 Cr  / PBILDT margin above 10%, while maintaining the overall credit metrics at a comfortable level on a sustained basis.

Negative  

• A decline in the scale of operations below Rs 90 Cr and PBILDT margins below 8%, along with further deterioration in capital structure or debt coverage indicators from the present level.

The company’s liquidity position is adequate, characterised by the current ratio of 2.39x as of 31 March 2026. However, a significant portion of its working capital remains tied up in project-related receivables and unbilled revenue, resulting in extended cash conversion cycles of 125-150 days. Average utilisation of its fund-based limits stood at ~66%, while utilisation of non-fund-based limits remained moderate at ~70% for the 12 months ending as of September 2026. Further, the company is expected to generate GCA of ~ ₹5.00–₹7.00 crore in FY27 against minimal scheduled repayment obligations of less than a crore in the same year. The company does not have a major debt-funded capex plan in the near term.

Environmental - The company is engaged in civil construction, including water supply, sewage, and road projects. Its operations are exposed to environmental and regulatory requirements relating to construction activities, waste disposal, dust, and resource utilisation. 

Social - The company undertakes infrastructure projects for government departments and public utilities, contributing to the development of civic infrastructure. Occupational health and safety and labour laws are relevant social considerations.

Governance - The company has an established operating track record and experienced promoters. Its business is primarily tender-based, making transparency in bidding, regulatory compliance, and timely statutory disclosures important governance considerations. 

Raj Conbuild Limited (RCL) is a Delhi-based civil construction and infrastructure company, incorporated in 2008 and currently active. It is an unlisted public company with its registered office in Laxmi Nagar, New Delhi. RCL is managed by Rajiv Chaudhary and Anchal Chaudhary. The company specializes in turnkey civil construction projects—encompassing design, construction, supply, installation, testing, commissioning, as well as ongoing operation and maintenance. Its core focus includes drinking water supply systems, distribution pipe networks, and sewage treatment plants (STPs). RCL primarily secures contracts through public tenders issued by government bodies and public sector undertakings, including the Delhi Jal Board (DJB), the Drinking Water and Sanitation Department (DWSD) in Jharkhand, and Public Health Engineering Departments across Bihar and Assam.

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.

Credit Rating Agency	Status and Reason for Non-Cooperation	Date of Press Release
CRISIL	CRISIL Ratings has continued to place ratings assigned to bank facilities of RCL in the “Issuer Not-Cooperating” category vide its press release dated March 31, 2026, considering its inability to carry out review in the absence of requisite information from the company	31Mar2026

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.

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