Benefits derived from experienced promoters

The company benefits from the experience of its promoters and management team in the mining services sector. The operations of DMRPL are managed by Mr. Mahesh Kumar Kejriwal, the founder of the entity, who has over three decades of experience in the industry, along with directors Mr. Siddhartha Kejriwal and Ms. Nishi Upadhyay. Their experience in mining operations and project execution supports the company’s operational activities and client relationships. Acuité believes that the presence of an experienced management team will continue to support the company’s business profile over the near to medium term.

Improvement in Scale of Operations and Stable Operating Profitability

The company has demonstrated an improvement in its scale of operations, with revenues increasing to Rs.320.54 crore in FY2026 (Provisional) from Rs. 281.58 crore in FY2025, albeit remaining below Rs. 477.30 crore in FY2023, primarily due to slower execution of order book. Earlier, DMRPL had substantial exposure to overburden removal contracts in Jharkhand, which were relatively lower-margin in nature. From FY2024 onwards, the company strategically shifted its focus towards relatively higher-margin and more stable segments, including MDO contracts, iron ore and limestone mining, and coal transportation, mainly across Odisha and Chhattisgarh. While this transition led to a temporary moderation in revenues due to the ramp-up of new projects, revenues have subsequently improved with the gradual execution of these orders. The company sub-contracts around 10–20% of its total work, based on revenue. The operating margin stood at 14.88% in FY2026 (Provisional) as against 16.18% in FY2025 and 6.49% in FY2024. The relatively lower margin in FY2024 was attributed to higher fuel and operating costs associated with its Jharkhand-based operations. However, a subsequent moderation in these costs, coupled with the shift towards better-margin segments, has supported improvement in profitability in FY2026. Accordingly, the PAT margin improved to 2.74% in FY2026 (Provisional) from 2.10% in FY2025. Acuité believes that the company’s scale of operations and operating profitability are likely to improve over the near to medium term, supported by its healthy order book and ongoing execution of projects.
 

Moderate financial risk profile

The financial risk profile of the company is moderate, supported by a healthy net worth base, moderate leverage levels, and comfortable debt protection metrics. The tangible net worth increased to Rs. 76.28 crore as on March 31, 2026 (Provisional) from Rs. 67.49 crore as on March 31, 2025, driven by accretion to reserves. The gearing improved to 1.80 times as on March 31, 2026 (Provisional) from 3.29 times as on March 31, 2025, mainly due to repayment of unsecured loans. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) also improved to 2.93 times as on March 31, 2026 (Provisional) from 3.85 times as on March 31, 2025. The debt protection metrics remain comfortable, with an interest coverage ratio (ICR) of 3.19 times and a debt service coverage ratio (DSCR) of 1.61 times as on March 31, 2026 (Provisional). The net cash accruals to total debt (NCA/TD) stood at 0.22 times as on March 31, 2026(Provisional) as compared to 0.12 times as on March 31, 2025. Acuité believes that the financial risk profile is likely to remain at similar levels over the medium term, supported by steady cash accruals.

Intensive working capital cycle

The company’s working capital cycle remains intensive, as reflected by Gross Current Assets (GCA) of 209 days as on March 31, 2026 (Provisional), albeit improving from 281 days as on March 31, 2025. Despite the improvement, the GCA days remain elevated due to high receivables and significant balances under other current assets of around Rs. 55 crore in March 31, 2026 (Provisional), primarily comprising advances to suppliers and balances with revenue authorities. The debtor period improved to 142 days in March 31, 2026 (Provisional) from 176 days in March 31, FY2025, with the relatively high level mainly attributable to revenue concentration in the last quarter and the typical realization cycle of 30–60 days from billing. Further, the inventory days of the company stood at 4 days as on March 31, 2026(Provisional) as compared to 4 days in March 31, FY2025. Creditor days typically range between 30 to 60 days and may occasionally be extended further based on account management practices and supplier relationships. Acuité believes that the company’s working capital cycle is expected to improve over the medium term, supported by better collection efficiency and improved working capital management.

The company operates in a fragmented mining services industry characterised by the presence of several small and mid-sized players, leading to competitive intensity and limited pricing flexibility. The company primarily caters to sectors such as mining and infrastructure, where demand is linked to overall economic activity and project execution trends, exposing its business profile to cyclical fluctuations. Additionally, operations remain exposed to inherent risks in the mining segment, including dependency on timely execution of contracts, regulatory approvals, and operational challenges, which may impact revenue visibility and profitability.

• Revenues increasing above 500 Cr, along with improvement in profitability margins
• Diversification of customer base, leading to reduction in concentration risk
• Improvement in the gearing level.
• Improvement in working capital cycle, resulting in lower reliance on external borrowings and enhanced liquidity

• Decline in operating margins below 10%, owing to execution challenges or inadequate cost passthrough
• Further elongation in working capital cycle, impacting liquidity position
• Deterioration in financial risk profile, particularly weakening of gearing levels or debt protection metrics