Brickwork Ratings has upgraded the long-term ratings for the Bank Loan Facilities of Rs. 105.00 Crs. of Choudhary Power Projects Pvt. Ltd and has removed the rating from the Issuer Not Cooperating category.
Particulars
Facilities**
Amount (Rs.Crs.)
Tenure
Rating#
Previous
Present
Previous (17 Sep 2024)
Present
Fund Based
10.00
30.00
Long Term
BWR B/Stable
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
BWR BB +
/Stable
removal from ISSUER NOT COOPERATING* category/Upgraded
Non Fund Based
38.00
75.00
Long Term
BWR B/Stable
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
BWR BB +
/Stable
removal from ISSUER NOT COOPERATING* category/Upgraded
Grand Total
48.00
105.00
(Rupees One Hundred Five Crores 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
The previous rating review conducted in September 2024 had reaffirmed the long-term rating at BWR B with a Stable outlook, with the classification retained under the “Issuer Not Cooperating” category for the company’s Bank Loan Facilities of Rs 48.00 crore due to inadequate information, in line with the guidelines of the Securities and Exchange Board of India. The company’s management has since resumed the regular submission of necessary information, facilitating a comprehensive evaluation. Consequently, BWR has upgraded the long-term ratings to BWR BB+with a Stable outlook and removed the rating from the Issuer Not Cooperating category for the enhanced Bank Loan Facilities of Rs 105.00 crore.
The upgrade reflects the promoter’s extensive experience in hydropower operations and toll management, the company’s diversified revenue base, and its healthy financial risk profile supported by low gearing and robust coverage metrics. These strengths, however, are tempered by sizeable working capital requirements, a moderate scale of operations, exposure to hydrology-related risks, and the inherent volatility associated with toll-linked revenue streams.
KEY RATING DRIVERS
Credit Strengths:
Extensive Promoter Experience and Diversified Revenue Streams :
CPPPL is promoted by Mr. Nagar Singh Choudhary, who brings around a decade of experience in hydro power projects and toll collection. The company has gradually diversified into road construction, tunneling, and mining, in addition to its core hydro-electric operations.
CPPPL operates hydro power projects with a total capacity of 15 MW and manages toll collection for National Highways Authority of India (NHAI) roads. In the road construction segment, the company has secured two contracts for four-laning a section of National Highway 44. While hydro-electric power generation remains stable and contributes to consistent profitability, toll collection is inherently volatile.
The company has a track record of timely execution of road projects and currently has orders worth over Rs 1,703crore to be executed over the next five years, providing good revenue visibility. Key monitorables include the timely completion of ongoing orders and renewal of toll contracts to sustain revenue stability.
Healthy financial risk profile :
The company’s tangible net worth strengthened from Rs 301.01 crore in FY2023 to Rs 435.83 crore in FY2025 (provisional), providing a solid financial cushion. Total debt to tangible net worth remained minimal at 0.03x in FY2023, declining to 0.02x in FY2025 (provisional), while TOL/TNW decreased from 0.39x to 0.24x, reflecting low dependence on external borrowings and moderate working capital requirements. The company maintained strong profitability in FY2025, with OPBDIT of Rs 82.36 crore and PAT of Rs 61.05 crore. Operating and net margins improved to 52.16% and 38.66%, respectively, demonstrating cost efficiency and effective absorption of fixed costs. Debt coverage metrics are robust, with ISCR at 70.6x and DSCR at 35.45x, highlighting a strong ability to meet obligations despite lower revenue. The financial risk profile is expected to remain comfortable over the medium term, assuming no significant debt-funded capital expenditure plans are undertaken.
Credit Risks:
High Working Capital Requirement :
As of March 31, 2025 (provisional), the company’s gross current assets stood at Rs 369.89 crore, comprising trade receivables of Rs 43.91 crore, inventory of Rs 8.37 crore, cash and bank balances of Rs 78.82 crore, and other current assets of Rs 117.34 crore. Against a tangible net worth of Rs 435.83 crore, this indicates a moderate reliance on current assets relative to net worth.
Current liabilities amounted to Rs 93.39 crore, including trade payables of Rs 40.22 crore, short-term borrowings of Rs 8.51 crore, and other current liabilities of Rs 13.69 crore. The company has managed its working capital efficiently; however, further improvement in the working capital cycle—particularly in receivables and inventory—remains a key sensitivity factor for credit ratings.
Exposure to revenue risks associated with toll collection :
Toll collection revenue is inherently uncertain, as it depends on traffic volumes while operating costs remain largely fixed. CPPPL secures toll contracts through e-tendering, where awards are based on the highest annual remittance bid, adding a competitive layer of risk. In FY2023, the company earned Rs 260 crore from four toll plazas, which declined to about Rs 110–115 crore in FY2024 due to securing only two contracts. The toll collection activity was completely discontinued in FY2025, resulting in no toll revenue and contributing to a reduction in operating income. Overall, the company’s revenue remains sensitive to tender outcomes and traffic-related volatility within this segment.
Moderate scale of operations :
The company operates on a moderate scale, with total operating income declining sharply from Rs 605.37 crore in FY2023 to Rs 157.90 crore in FY2025 (provisional). This contraction is primarily attributable to the completion of major road construction projects, with income falling from Rs 259.71 crore in FY2023 to Rs 111.58 crore in FY2025, along with limited contributions from mining activities, which remained minimal despite increasing from Rs 0.03 crore in FY2024 to Rs 2.69 crore in FY2025. While power generation continues to provide stable and profitable revenue, other segments—such as road construction, toll collection, and mining—are project-driven and cyclical in nature, resulting in inherent volatility in overall income. FY2025 reflects a lower operational scale; however, the company continues to benefit from strong experience in executing large infrastructure projects and a consistent hydropower business, offering a sound platform for future growth prospects.
Susceptibility to Hydrology Risks :
Despite the support of detailed hydrological studies, power generation remains dependent on the availability and distribution of rainfall. River flow levels vary with seasonal rainfall patterns, and uneven or concentrated monsoon rainfall can shorten the effective generation period. As a result, revenue from the hydropower division remains inherently sensitive to hydrological conditions, with any reduction in water availability directly impacting units generated and the overall revenue contribution from this segment.
ANALYTICAL APPROACH - Standalone
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive Sensitivities
Sustained growth in total operating income by more than 30% year-on-year, with the hydropower segment contributing at least 30% of total revenue, leading to stronger operational scale and cash flow stability.
Improvement in profitability and liquidity metrics, with EBITDA margins maintained above 25% and ISCR consistently exceeding 10x, while retaining a conservative capital structure.
Negative Sensitivities
Decline in total operating income by over 20% year-on-year, or project execution delays, lower hydropower generation, or reduced order inflows.
Deterioration in financial leverage or liquidity, reflected by Total Debt/TNW exceeding 1.0x, TOL/TNW surpassing 1.5x, or a significant elongation of the working capital cycle beyond 150 days.
LIQUIDITY INDICATORS - Adequate
The company’s liquidity position remains adequate, supported by strong cash balances and minimal reliance on external debt. As of March 31, 2025 (provisional), cash and bank balances stood at Rs 78.82 crore, reflecting healthy internal accruals and effective cash management. Net Cash accruals for FY2025 (provisional) are Rs 67.40 crore, sufficient to cover total debt obligations of Rs 30.06 crore (including short-term borrowings of Rs 30.00 crore), providing an adequate cushion for debt servicing. The Interest Service Coverage Ratio (ISCR) and Debt Service Coverage Ratio (DSCR) stand at 70.60x and 35.45x, respectively, indicating strong debt repayment capacity despite slightly higher short-term borrowings. The current ratio is 2.2x in FY2025. The average utilisation stood at 28.54% for the period ending October 2025, reflecting disciplined cash flow management and a reduced reliance on working capital limits during the year. With low leverage, a sizable net worth of Rs 435.83 crore, and substantial cash reserves, the company maintains financial flexibility to withstand business volatility or unforeseen contingencies.
ABOUT THE ENTITY
Macro Economic Indicator
Sector
Industry
Basic Industry
Industrials
Construction
Construction
Civil Construction
Choudhary Power Projects Pvt. Ltd. (CPPPL), incorporated in 2009 after taking over the operations of a partnership firm established in 2004, is promoted and managed by Nagar Singh along with Goldi Choudhary and Panna Choudhary. The company is recognized as a leading independent power producer in Jammu & Kashmir.
CPPPL operates in three segments—hydropower generation, civil construction, and toll road operations. It owns a 15 MW hydel project (Ranja Ala Dunadi) in Kishtwar, commissioned in 2012, with long-term power supply arrangements to TATA Power since 2013. The company has also undertaken projects in road and bridge construction and previously managed toll plazas.
In addition to business operations, the promoter has established an Educational Trust to support community development initiatives. CPPPL continues to contribute to the region's infrastructure and power sector through its diversified activities.
KEY FINANCIAL INDICATORS (Standalone)
Key Parameters
Units
FY 22 - 23
(Audited)
FY 23 - 24
(Audited)
FY 24 - 25
(Provisional)
Operating Revenue
Rs.Crs.
605.37
476.35
157.90
EBITDA
Rs.Crs.
77.56
95.89
82.36
PAT
Rs.Crs.
66.79
73.78
61.05
Tangible Net Worth
Rs.Crs.
301.01
374.78
435.83
Total Debt / Tangible Net Worth
Times
0.03
0.03
0.02
Current Ratio
Times
3.23
2.48
3.96
KEY COVENANTS OF THE FACILITY RATED
The sanction terms include standard financial and non-financial covenants customarily applicable to facilities of this nature.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
Creadit Rating Agency
Status and Reason for Non-Cooparation
Date of Press Release
CRISIL
CPPPL has been classified as non-cooperative by CRISIL, as per the release dated 30 April 2025, due to the company’s failure to provide the information required for ongoing rating surveillance.
30Apr2025
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities
Current Rating (2025)
2024
2023
2022
Type
Tenure
Amount (Rs.Crs.)
Rating
Date
Rating
Date
Rating
Date
Rating
Fund Based
LT
30.00
BWR BB+/Stable
(removal from ISSUER NOT COOPERATING* category/Upgraded)
17Sep2024
BWR BStable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
20Jun2023
BWR B+Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
09Jun2022
BWR BB-Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
Non Fund Based
LT
75.00
BWR BB+/Stable
(removal from ISSUER NOT COOPERATING* category/Upgraded)
17Sep2024
BWR BStable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
20Jun2023
BWR B+Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
09Jun2022
BWR BB-Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
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