| Established track record of business operations
The company has been around for more than 100 years. It was nationalised and taken over by the Indian government in 1976, and the Ministry of Railways has had administrative responsibility over it since August 2010. BCL is a manufacturer of railway wagons, and wagon components in India. BCL’s established relationships with Indian Railways and private players, along with its efforts to diversify into civil and bridge construction, are expected to strengthen its revenue profile. Acuité believes that BCL will continue to benefit from its extensive experience and strong customer relationships, which underpin its business stability and growth prospects.
Improvement in operational Performance:
The rating factors in BCL’s healthy revenue growth of around 15%, with the topline increasing to Rs.1,266.50 crore in FY2025 from Rs.1,103.76 crore in FY2024, driven by timely execution and new order inflows. Further, an outstanding order book of Rs.2,320.87 crore as of November 1, 2025, with an OB/OI ratio of 1.83 times, provides medium-term revenue visibility. The company has also recorded Rs.893.45 crore in 7MFY26 compared to Rs.658.72 crore in 7MFY25. Acuité believes BCL’s topline will continue to improve, supported by execution of its unexecuted pipeline,
Healthy Financial Risk Profile
The financial risk profile of the company is marked by increase in net worth, and strong debt protection metrics. The tangible net worth of the company improved to Rs.233.44 crore in FY 25 from Rs.216.66 Cr. in FY24 due to low accretion of reserves. There is no short term and long term debt outstanding as on 31st March, 2025 prior to that Gearing was low and stood at 0.14 times in the previous financial year. Interest coverage ratio and Debt service coverage ratio stood comfortable at 7.95 times and 6.58 times in FY25 respectively. The Tangible Outside Liability/ Tangible Networth stood at 1.46 times in FY25 as against 1.91 times in FY24. Acuite believes the financial risk profile of the company will continue to remain healthy on account of absence of debt funded capex plan over the medium term.
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| Intensive Working Capital Cycle albeit slight improvement in FY25:
BCL’s working capital cycle, though intensive, has shown improvement with Gross Current Assets reducing to 142 days in FY2025 from 186 days in FY2024,driven by decrease in other current assets primarily due to the unbilled revenue has decreased to Rs.95.58 crore in FY 2025 from Rs.169.86 crore in FY 2024. Inventory days moderated to 53 days in FY 25 from 61 days in FY 24, with most inventory in the form of raw materials, while debtor days increased slightly to 38 days in FY 25 from 32 days in FY 24 with around 94% of receivables outstanding for less than six months. Creditor days stood at 78 days in FY2025 compared to 87 days in FY2024, reflecting higher raw material purchases at the year end. Acuité believes the working capital cycle will remain at similar levels over the medium term.
Lower Profitability:
Despite topline growth, their EBITDA margin remain low and dipped slightly to 2.53% in FY2025 from 2.58% in FY2024. EBITDA remain low in FY 25 due to BCL’s inability to pass on price increase to Indian Railways on a particular order which had delayed execution. PAT margin improved marginally to 1.56% in FY 25 from 1.49% in FY 24. However,BCL is focusing on higher- margin non-railway wagon orders also. Furthermore, BCL is expected to foray into solar agency for power generation which will further save their power cost. Acuité believes margins will strengthen over the medium term, supported by these initiatives and year to date performance.
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