Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuite has reaffirmed its 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. 35.15 Cr. bank facilities of Babasaheb Bapusaheb Gunjate(BBG). The outlook remains ‘Stable’.
Rationale for Rating The rating factors in the firm’s consistent increase in operating performance, as reflected from the growth in revenue supported by the timely execution of existing orders albeit slight moderation in profitability margins during FY26 (Prov.) The unexecuted order book stood at Rs.67.58 Cr. as of April 2026 translating into OB/OI of 0.60 times which provided low revenue visibility over the medium term. The firm’s ability to bag new orders and timely execution of the same will remain key monitorable. The rating continues to derive comfort from the firm's long operational track record and experienced management. Further, the financial risk profile remains moderate, supported by increase in networth, moderate capital structure, and adequate liquidity position. However, the strengths are constrained by intensive working capital cycle, 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
Experienced management and Established track record of operations
The firm has an established track record of over thirty-two years of undertaking projects related to civil construction in Maharashtra. The firm is managed by its proprietor, ~ Mr. Babasaheb Bapusaheb Gunjate, who have extensive experience in the same line of business. The firm has also diversified its businesses into renting properties (including liquor sales), windmill electricity generation and job work of creating concrete mix which contributed 4.55% of FY25 revenue. Acuite believes that going forward, growth of the firm will be aided by the established track record of operations and the management’s strong understanding of market dynamics.
Improvement in revenue albeit moderation in profitability margins during FY26 (Prov.) The revenues of the firm have increased by ~57% and stood at Rs.112.40 Cr. in FY26 (Prov.) as against Rs.71.69 crore in FY2025. The increase was on account of timely execution of the existing orders. The EBITDA margin stood at 11.36 percent in FY26 (Prov.) as against 11.43 percent in FY25 due to increase in material costs and subcontracting expenses. The PAT margin declined to 5.45 percent in FY26 (Prov.) from 6.12 percent in FY25 primarily due to higher depreciation and finance costs associated with the acquisition of new machinery and vehicles, which were funded through external borrowings. The RoCE stood at 21.18 percent in FY26 (Prov.) as against 17.71 percent in FY25. Acuite believes the scale of operations will remain on similar levels over the medium term backed by order flow.
Low and Concentrated order book position Revenue visibility of the firm remains low, with an order book of Rs. 67.58 crore as of April 2026 (0.60x of the firm's FY2026 revenue), providing low revenue visibility. These orders are from government departments and are secured through direct tendering processes. The firm’s business is fully concentrated in Maharashtra, with 100% of revenue generated from this state in FY26 (Prov.), resulting in high geographical concentration risk. This risk is partly mitigated by a steady inflow of orders and timely execution of projects. However, any adverse developments in the region could impact project execution and overall performance. Going forward, the firm’s ability to diversify its clientele base, bag new orders, and timely execute the existing orders will remain key rating monitorable factors.
Intensive Working capital cycle The working capital cycle of the firm was intensive marked by Gross Current Assets (GCA) of 157 days in FY26 (Prov.) as against 179 days in FY25. The inventory days stood at 51 days on FY26 (Prov.) as against 80 days in FY25. Raw materials are classified as work in progress until invoices are issued. The debtor days stood at 43 days in FY26 (Prov.) as against 31 days in FY25. Payment realization typically takes around 3 months, subject to the availability of government funds. As of now, receivables amounting to Rs.23.31 crore from certain projects remain outstanding and are expected to be realized by December 2026. The creditor days stood at 307 days in FY26 (Prov.) as against 289 days in FY25, since payments are directly linked to the firm receiving proceeds from their customers. Acuite believes that working capital cycle are expected to remain at similar levels over the medium term due to the inherent nature of business.
Competitive and fragmented nature of industry
Most of the projects are tender-based and face intense competition, which may hence require it to bid aggressively to get contracts. Acuite believes that the firm is susceptible to volatility in margins due to intense competition in infrastructure industry.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Increase in revenue above Rs. 150 Cr. supported by inflow of new orders coupled with improvement in profitability margins
Improvement in working capital cycle.
Potential triggers (individual or collective) for a downward rating action:
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Contacts
List of instruments and names of regulators of the instruments
