Press Release

Press Release

March 25, 2026

S B KHAKAL
Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	18.00	ACUITE BBB- \| Stable \| Assigned	-
Bank Loan Ratings	32.00	-	ACUITE A3 \| Assigned
Total Outstanding	50.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has assigned long-term rating of ‘ACUITE BBB-' (read as ACUITE triple B minus) and short-term rating of 'ACUITE A3' (read as ACUITE A three) on the Rs.50.00 crore bank facilities of S B Khakal (SBK). The outlook is 'Stable'.

Rationale for Rating
The assigned rating factors in the long operational track record of the firm and experienced management. The rating also factors in the stable operating performance marked by modest scale and sustained profitability margins along with moderately efficient working capital operations. However, the rating is constrained by moderate financial risk profile marked by low net worth base, moderate order book position providing limited revenue visibility and stiff competition in the industry along with geographic concentration risk.

About the Company

S.B. Khakal is a proprietary concern founded by Mr. Subhash Bhaginath Khakal in the year 1990. Over the last 35 years, the entity has been engaged in various infrastructure projects such as execution of water supply projects, railway projects, construction of cement concrete roads, turnkey sewerage projects, elevated storage reservoirs, buildings constructions, compound walls and earth retaining structures etc. under Government/ Semi Government organization and Private sectors. The firm is a registered Class-I (without limit) category contractor under Maharashtra Jeevan Pradhikaran, Public Work Department and Municipal corporation of Greater Mumbai since 2010.

Unsupported Rating

None

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of S B Khakal (SBK) for arriving at the rating.

Key Rating Drivers

Strengths

Long track record of operations and experienced management
Established in 1990, SBK has been operational as a civil contractor for over three decades, supported by the promoter’s more than 35 years of industry expertise. Acuité believes the promoter’s experience and established track record will continue to support stable operations.

Stable operating performance supported by moderate order book position
The firm's operating performance is stable with revenue improved to Rs.178.28 crore in FY2025 as against Rs.145.24 crore in FY2024. In 11MFY26, firm has recorded revenue of Rs. 114 Cr and is expected to close FY2026 at around Rs.150 crore. SBK has an order book of Rs.280.42 crore, providing near to medium-term revenue visibility. Profitability improved with operating margins at 5.75 per cent in FY2025 as against 4.93 per cent in FY2024, and margins are expected to remain in the 5.75–6.00 per cent range. PAT margins stood at 2.65 per cent in FY2025. Acuite believes, the operating performance would remain stable in the near to medium term on the back of steady work orders in hand.

Moderately efficient working capital operations
The working capital operations of SBK remained moderately efficient, reflected in gross current assets (GCA) of 84 days in FY2025 compared with 73 days in FY2024. The debtor collection period stood at 35 days in FY2025 (FY2024: 27 days), while creditor days stood at 57 days in FY2025 (FY2024: 60 days). Inventory days remained stable at 31 days in FY2025 as against 29 days in FY2024. The utilisation of fund-based working capital limits remained high at around 90 per cent for the six months ended January 2026, while non-fund-based limits were almost fully utilised during the same period. Acuite believes, the firms working capital operations would remain moderately efficient given the quicker collection days.

Weaknesses

Moderate financial risk profile
The financial risk profile of SBK remains moderate, marked by a low net worth, moderate gearing levels and comfortable debt protection metrics. Firm’s net worth stood at Rs.21.08 Cr. as on March 31, 2025 as against Rs.15.11 Cr. as on March 31, 2024. The firm's total debt stood at Rs.10.63 crore in FY2025, marginally lower than Rs.10.94 crore in FY2024, comprising Rs.2.59 crore of long-term debt, Rs.1.60 crore of CPLTD and Rs.6.44 crore of short-term borrowings. Debt protection indicators remained healthy, with an interest coverage ratio (ICR) of 8.82 times and debt service coverage ratio (DSCR) of 2.10 times in FY2025, compared with 7.40 times and 2.69 times respectively in FY2024. The firm’s TOL/TNW stood at 1.93 times and Debt/EBITDA at 1.01 times in FY2025. Acuite believes, the financial risk profile of the firm would remain moderate on the back of low net worth base.

Competitive and fragmented nature of industry coupled with tender based business
The firm is engaged as a civil contractor and the sector is marked by the presence of several mid to big size players. The firm faces intense competition from the other players in the sectors. Risk becomes more pronounced as tendering is based on a minimum amount of bidding of contracts and hence the firm has to make bid for such tenders on competitive prices; which may affect the profitability of the firm. However, this risk is mitigated to an extent as the firm is operating in this environment for the last 3 decades.

Inherent risk of capital withdrawal associated with proprietorship firm
The firm is susceptible to the inherent risk of capital withdrawal given its constitution as a proprietorship. Any significant withdrawal from the capital will have a negative bearing on the financial risk profile of the firm.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Sustained improvement in revenue and profitability
EBITDA margins improving and sustaining above 6.25–6.50% over the medium term.

Potential triggers (individual or collective) for a downward rating action:

Operating income declining below Rs.120–130 crore on a sustained basis on the back of delay in order execution or absence of new work orders.
Deterioration in financial risk profile due to significant capital withdrawal or borrowings.
Elongation in working capital cycle.

Liquidity Position

Adequate

SBK’s liquidity position remains adequate, supported by sufficient net cash accruals against its repayment obligations. The firm generated Rs.6.03 crore of cash accruals in FY2025 against maturing debt of Rs.2.24 crore. Net cash accruals are expected to remain in the range of Rs.6.30–7.00 crore over FY2026–FY2027, compared to repayment obligations of Rs.0.50–1.80 crore during the same period. The current ratio stood at 1.08 times, with unencumbered cash and bank balances of Rs.39,837. Working capital utilisation remained high, with fund-based limits averaging 90 per cent and non-fund-based limits being almost fully utilised for the six months ended January 2026.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	178.28	145.24
PAT	Rs. Cr.	4.73	5.03
PAT Margin	(%)	2.65	3.46
Total Debt/Tangible Net Worth	Times	0.50	0.72
PBDIT/Interest	Times	8.82	7.40

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

None

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 :

Not Applicable

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
BANK OF MAHARASHTRA	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.15	Simple	ACUITE A3 \| Assigned
BANK OF MAHARASHTRA	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	13.85	Simple	ACUITE BBB- \| Stable \| Assigned
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.15	Simple	ACUITE BBB- \| Stable \| Assigned
Not Applicable	Not avl. / Not appl.	Proposed Short Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	6.85	Simple	ACUITE A3 \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Akshat Shah
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.

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