Press Release April 29, 2025 BABASAHEB BAPUSAHEB GUNJATE Rating Assigned and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	3.50	ACUITE BB | Stable | Assigned	-
Bank Loan Ratings	9.65	ACUITE BB | Stable | Upgraded	-
Bank Loan Ratings	22.00	-	ACUITE A4+ | Assigned
Total Outstanding	35.15	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has upgraded its long-term rating to ‘ACUITE BB' (read as ACUITE double B) from ‘ACUITE B+’ (read as ACUITE B plus) on Rs. 9.65 Cr. bank facilities of of Babasaheb Bapusaheb Gunjate(BBG). The outlook is ‘Stable’. Further, Acuite has assigned long-term rating of ‘ACUITE BB (read as ACUITE double B) and short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on Rs.25.50 Cr. bank facilities of Babasaheb Bapusaheb Gunjate (BBG). The outlook is ‘Stable’. The firm has provided information, leading to transition from Issuer Not Co-operating (INC since 2021) to a regular issuer.  Rationale for Rating The rating takes into account consistent increase in operating performance including increase in revenues and profitability of BBG due to healthy order book position that provides revenue visibility over the medium term. The rating continues to draw comfort from long operational track record and experienced management. Furthermore, the firm’s financial risk profile is moderate reflected by steady net worth, comfortable capital structure and adequate liquidity position. The rating is however constrained by working capital intensive nature of operations, high geographical concentration in order book and inherent risks in tender based and competitive construction industry.

About the Company

Established in 1994, Babasaheb Bapusaheb Gunjate (BBG) is a proprietorship concern engaged mainly in civil construction and various other smaller businesses like real estate development, renting properties, windmill electricity generation and job work of creating concrete mix in the state of Maharashtra. It carries out projects majorly related to the construction of roads, footpaths, railways, agriculture and others. The day-to-day operations are carried out by its proprietor, Mr. Babasaheb Gunjate who has decades of experience in infrastructure industry.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuite has taken the standalone business and financial risk profile of Babasaheb Bapusaheb Gunjate to arrive at the rating.

Key Rating Drivers

Strengths

­Steady scale of operations BBG has achieved revenues of Rs.69.89 Cr. in FY25 (Prov.) as against Rs.52.38 crore in FY2024 and Rs. 31.37 crore in FY2023. The increase was on account of a healthy order book position. The unexecuted orders are Rs.134.71 Cr. as on March 2025. The OB/OI is 2.79 times. There are some orders for which the work is completed but the final bill is in progress. The EBITDA margin stood at 13.58 percent in FY25 (Prov.) as against 9.13 percent in FY24 and 14.77 percent in FY23. The decrease in margin in FY24 was due to increase in manufacturing costs, which have been driven by increased subcontracting expenses for roads and higher repair and maintenance costs. The PAT margin stood at 8.92 percent in FY25 (Prov.) as against 3.47 percent in FY24 and 6.15 percent in FY23. The RoCE stood at 22.28 percent in FY25 (Prov.) as against 11.39 percent in FY24 and 12.86 percent in FY23. Acuite believes that going forward, the ability of the firm to bag new orders and timely execution of the existing orders will remain a key rating monitorable. Moderate Financial Risk Profile The firm’s financial risk profile is moderate reflected by steady net worth, improved gearing and comfortable debt protection metrics. The tangible net worth of the firm increased to Rs.18.88 crore in FY2025 (Prov.) as against Rs.13.10 crore in FY2024 and Rs.12.65 Cr. in FY2023 due to accretion to reserves. Gearing of the firm stood at 1.14 times in FY2025 (Prov.) as against 1.42 times in FY2024 and 1.21 times in FY23 on account of machine loans taken for projects. The unsecured loans stood at Rs.2.65 Cr. in FY25 Prov. as against Rs. 3.37 Cr. in FY24 and Rs.1.87 Cr. in FY23. The proprietor provides necessary financial support to the firm as needed. The interest coverage ratio of the firm stood at 5.26 times in FY25 (Prov.), and Debt Service Coverage Ratio stood at 3.44 times in FY25 (prov.). Acuite believes that the financial risk profile of the firm will remain moderate with no major capex plans, steady networth and comfortable capital structure.

Weaknesses

­Intensive Working capital management The working capital cycle of the firm was intensive marked by Gross Current Assets (GCA) of 196 days in FY25 (Prov.) as against 216 days in FY24 and 256 days in FY23. The inventory days stood at 139 days on FY25 Prov. as against 118 days in FY24 and 115 days in FY23. Inventory days were high because raw materials are still classified as work in progress until invoices are issued. The debtor days stood at 29 days in FY25 Provisional as against 14 days in FY24 and 32 days in FY23.  The creditor days stood at 401 days in FY25 Prov. as against 596 days in FY24 as and 332 days in FY23. The credit from suppliers is dependent on the payments as and when received from the government. Acuite believes that working capital requirements are expected to remain at similar levels over the medium term due to the inherent nature of business. Competitive and fragmented nature of industry With increased focus of the central government on the infrastructure sector, BBG is expected to reap benefits over the medium term. However, most of its projects are tender-based and face intense competition, which may require it to bid aggressively to get contracts. Acuite believe that the company is susceptible to volatility in margins due to intense competition in infrastructure industry.

Rating Sensitivities

­Movement in revenue and profitability margins Working capital cycle timely execution of work orders

Liquidity Position

Adequate

The firm’s liquidity position is adequate marked by net cash accruals of Rs.7.70 crore in FY25 (Prov.) as against a long-term debt repayment of Rs. 0.96 crore over the same period. Over the next 2 years, the firm will generate sufficient net cash accruals to meet its long-term debt repayments of ~Rs.1.50 Cr. annually. The current ratio stood at 1.01 times in FY25 Prov. as compared to 0.82 times in FY24 and 0.80 times in FY23. The cash and bank balances stood at Rs.0.57 Cr. in FY25 Prov. as against Rs 0.91 crore in FY24 and Rs.1.44 crore in FY23. Additionally, the fund-based limit was utilized at 87 per cent for the six months ended February 2025. Acuite believes that the firm will maintain adequate liquidity position due to net cash accruals against debt repayments, flexibility to infuse funds and no major debt funded capex plans.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	69.89	52.38
PAT	Rs. Cr.	6.23	1.82
PAT Margin	(%)	8.92	3.47
Total Debt/Tangible Net Worth	Times	1.14	1.42
PBDIT/Interest	Times	5.26	3.11

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 01 Mar 2024 Cash Credit Long Term 6.00 ACUITE B+ (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 3.65 ACUITE B+ (Reaffirmed & Issuer not co-operating*) 13 Dec 2022 Cash Credit Long Term 6.00 ACUITE B+ (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 3.65 ACUITE B+ (Reaffirmed & Issuer not co-operating*)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Union Bank of India Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4+ | Assigned Axis Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A4+ | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.55 Simple ACUITE BB | Stable | Upgraded ( from ACUITE B+ ) Union Bank of India Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.10 Simple ACUITE BB | Stable | Upgraded ( from ACUITE B+ ) Union Bank of India Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.90 Simple ACUITE BB | Stable | Assigned Axis Bank Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.60 Simple ACUITE BB | Stable | Assigned

Contacts

Mohit Jain Senior Vice President - Rating Operations Manvi Khaitan Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.