Press Release August 04, 2026 AVP INFRACON LIMITED Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	140.20	ACUITE BBB+ | Stable | Reaffirmed	-	RBI
Non Convertible Debentures (NCD)	30.00	0.00	ACUITE BBB+ | Stable | Assigned	-	SEBI
Bank Loan Ratings	0.00	84.80	-	ACUITE A2 | Reaffirmed	RBI
Total Outstanding	30.00	225.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

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

­Acuité has reaffirmed the long-term rating of  ‘ACUITE BBB+’ (read as ACUITE triple B plus) and short term rating of 'ACUITE A2' (read as ACUITE A Two ) on Rs. 225.00 Cr. bank facilities of AVP Infracon Limited (AVPIL). The outlook is 'Stable. Acuite has assigned the long-term rating of ‘ACUITE BBB+’ (read as ACUITE triple B plus) on Rs 30.00 Cr. of proposed Non Convertible Debentures (NCDs) of  AVP Infracon Limited (AVPIL).The outlook is 'Stable. Rationale for rating The rating factors the improvement in scale of operations and stable profitability margins in FY26. The rating also draws comfort from the AVP group’s moderate financial risk profile, marked by comfortable capital structure and adequate liquidity position. The experienced management team and the group’s established operational track record in the engineering, procurement, and construction (EPC) segment also support the rating. However, the rating remains constrained by the working capital–intensive nature of operations, modest order book coupled with significant geographical concentration and inherent risks associated with the tender-based nature of business amidst intense competition in the construction industry. Going forward, steady growth in the scale of operations, supported by timely execution of orders and a growing order book, while maintaining healthy profitability margins, will remain key monitorable.

About the Company

Tamil Nadu based AVP Infracon Limited (erstwhile AVP Constructions Private Limited) was incorporated in September 2009. The company derives its revenues primarily from construction activities including infrastructure developmental works, constructions work such as technically complex and high value projects like Express ways, National Highways, Flyovers, Bridges and Viaducts, Irrigation Projects, Urban Development - Civic amenities and other projects etc. It is having 124 fleet strength units and three ready mix concrete (RMC) plant and one blue metal crusher unit located at Tirupur, Coimbatore, Dharapuram.Mr. D.Prasanna , Mr B. Venkateshwarlu , Mr D.Vasanth and Mrs D. Bhagyavathy are the present directors of the company.

About the Group

­AVP Renewable Energies Limited (AVPREL)-Wholly owned subsidiary AVP Renewable Energies Limited (AVPREL) is a Tamil Nadu–based company incorporated on October 14, 2024. The company is primarily engaged in the design, installation, and maintenance of solar energy systems, along with wind and other renewable energy solutions. AVPREL focuses on delivering sustainable and technologically advanced clean-energy projects. AVP RMC -Partnership firm Chennai based firm AVP RMC, is a partnership firm with AVPIL holding majority stake of 90% as a partner along with four other partners namely Mr. D Prasanna, Mr. B Venkateshwaralu, Mr K Jaiganesh and Mr D Vasanth. It is engaged into the business of manufacturing and supply of readymade concrete. Kanthan Blue Metals-Partnership firm It is partnership firm with 90 percent stake held by AVPIL. It is engaged into the business of quarrying and production of blue metal aggregates for construction.

Unsupported Rating

­Not applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­Acuite has considered the consolidated business and financial risk profile of AVP Infracon Limited (referred to as AVP Group) to arrive at the rating. The consolidated is in the view of common management, operational linkages, financial linkages between the entities and a similar line of business. List of consolidated entities given in the annexures below.

Key Rating Drivers

Strengths

E­xperienced management and reputed clientele base The group has established track record of operations for over 15 years of experience in civil construction services. Promoters of the group namely Mr D Prasanna, Mr. B Venkateshwaralu are having two decades of experienced in the field of civil construction. The group has collaborations with key government organisations like Greater Chennai Corporation, NHAI, Ministry of Road Transport and highways, Tamil Nadu Public Works department, Tamil Nadu Highways department. The group also benefits from a diversified infrastructure portfolio along with its strategic foray into renewable energy. Acuité believes that the group is expected to benefit from the promoter’s extensive experience and established relationships with their reputed clientele. Augmentation in operating performance and stable profit margins in FY2026 The group’s consolidated revenue improved significantly to Rs 441.44 Cr in FY2026 from Rs  292.81 Cr in FY2025, registering a growth of 50.76%. The increase in revenue was primarily driven by the efficient execution of its order book during the year.  The group’s operating margin moderated slightly but remained healthy at 19.37 percent in FY2026 (20.67 percent in FY2025). The margin is supported by better execution of orders, benefits arising from its integrated business model with backward integration through its Blue Metal unit, which provides raw material security, cost efficiency, and project execution. The PAT margin also declined to 9.54 percent in FY2026 from 11.30 percent in FY2025, primarily due to an increase in finance costs. Acuité believes that the sustainability of these healthy margins amid the group’s expansion and rising scale of operations will remain a key monitorable over the medium term. Moderate financial risk profile The group’s financial risk profile remains moderate, supported by an improving net worth base and comfortable capital structure. The group’s net worth improved to Rs 183.96 Cr as on March 31,2026 (includes unsecured loans of Rs 5.68 Cr treated as quasi equity) from Rs.130.77 Cr as on March 31, 2025, primarily due to the accretion of profits to reserves. The group’s total debt increased to Rs 229.39 Cr as on March 31,2026 (Rs.168.65 Cr as on March 31, 2025).Despite the higher debt levels, the gearing improved marginally and remained comfortable at 1.25 times as on March 31, 2026, (as against 1.29 times as on March 31, 2025.) However, the debt protection metrics moderated in FY2026, with the interest coverage ratio (ICR) declining to 3.94 times in FY2026 (4.85 times in FY2025) and the debt service coverage ratio (DSCR) declining to 1.01 times Iin FY26(from 1.56 times in FY25). However as on September 2025, the company has received Rs.10.00 Cr. (25 percent of the issue price of share warrant) and balance Rs 30.00 Cr would be received within 18 months from the exercise of the warrant, to completed in the FY 2026-27. Further the group is planning for the raising the funds through issuance of non-convertible debentures of Rs 30.00 Cr in FY2027 to meet the working capital requirements and general corporate purpose. Acuité believes that the group’s financial risk profile is likely to remain at the similar level over the medium term, supported by steady net cash accruals arising from stable profitability margins and the proposed issuance of share warrants, which is expected to strengthen the net worth base and partially offset the impact of the planned increase in debt levels.

Weaknesses

Modest orderbook position As on July 10, 2026, the group had an unexecuted order book of Rs 436.14 Cr, which provides moderate revenue visibility over the near to medium term. The relatively lower order book position is mainly attributable to the slowdown in tendering activities by the Government of Tamil Nadu following the state elections and the subsequent formation of the new government. Moreover, company has a bidding pipeline of ~Rs 1631.42 Cr, receipt of orders and timely executions of which remains a key rating monitorable. ­Working capital intensive nature of operation The group’s working capital requirements improved but remains intensive as reflected by high gross current assets (GCA) of 294 days for 2026 (322 days for 2025). The elongated GCA days is driven primarily by elevated inventory levels, receivable days and sizeable portion of funds tied up in other current assets such as balances with government authorities, supplier advances. The inventory days stood at 123 days and debtors days stood at 132 days in FY2026. Acuité believes that the operations of the group will remain working capital intensive over the medium term based on the nature of business. High geographical concentration The group derives majority of revenue from government projects limited to Tamil Nadu thereby reflecting higher geographic concentration. Moreover, the unexecuted order book of the company is also geographically limited to state of Tamil Nadu only. However, the group is focusing to widening the geographic footprint in near to medium terms. Inherent risks in tender-based businesses and intense competition in the industry Intense competition from several players, and exposure to risks arising from dependence on tenders. Growth in revenue and profitability depends on the group's ability to bid successfully and executes order within stipulated time frame.

Rating Sensitivities

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

­ Steady growth in scale of operations with timely execution and growth in order book resulting in revenues above Rs 700.00 Cr coupled with sustained profitability margin Improvement in debt coverage indicators

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

­ Decline in scale of operations due to delay in order execution or low order book growth with revenues falling below Rs 400.00 Cr Elevation in debt levels impacting in the financial risk profile and coverage indicators leading to average DSCR falling below 1.0x  Elongation of working capital cycle

All Covenants

­­C­urrently not available, since these are proposed NCD limits

Liquidity Position

Adequate

The group’s liquidity remains adequate supported by steady net cash accruals of Rs 49.38 Cr as on March 31,2026 as against long term debt repayment obligations of Rs 19.37 Cr during the year. Over FY27-FY28, the group is expecting to generate cash accruals in the range of Rs 53.00 Cr to Rs 69.00 Cr as against its maturing repayment obligations in the range of ~Rs. 24-40 Cr annually. The cash and bank balance stood at Rs 1.77 Cr with a moderate current ratio of 1.24 times as on March 31,2026 on account of elongated creditors holdings. The average utilisation of its working capital limits stood at ~90.38 percent for fund based and ~36.04 percent for non-fund based in last five months ended June 2026.

Outlook-Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	441.44	292.81
PAT	Rs. Cr.	42.11	33.10
PAT Margin	(%)	9.54	11.30
Total Debt/Tangible Net Worth	Times	1.25	1.29
PBDIT/Interest	Times	3.94	4.85

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

­Not applicable

Any Other Information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.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 28 Apr 2026 Bank Guarantee (BLR) Short Term 4.80 ACUITE A2 (Upgraded from ACUITE A3+) Bank Guarantee (BLR) Short Term 15.00 ACUITE A2 (Upgraded from ACUITE A3+) Bank Guarantee (BLR) Short Term 12.00 ACUITE A2 (Upgraded from ACUITE A3+) Bank Guarantee (BLR) Short Term 23.00 ACUITE A2 (Assigned) Bank Guarantee (BLR) Short Term 30.00 ACUITE A2 (Assigned) Proposed Long Term Bank Facility Long Term 0.20 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 10.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Working Capital Demand Loan (WCDL) Long Term 10.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 30.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 25.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 15.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 25.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 10.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 15.00 ACUITE BBB+ | Stable (Assigned) 28 Jan 2025 Letter of Credit Short Term 3.50 ACUITE A3+ (Assigned) Bank Guarantee (BLR) Short Term 12.00 ACUITE A3+ (Assigned) Bank Guarantee (BLR) Short Term 25.00 ACUITE A3+ (Assigned) Bank Guarantee (BLR) Short Term 15.00 ACUITE A3+ (Assigned) Cash Credit Long Term 10.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 10.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 25.00 ACUITE BBB | Stable (Assigned) Proposed Long Term Bank Facility Long Term 6.50 ACUITE BBB | Stable (Assigned)

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*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

­ Sr No Name of the entity 1 AVP Infracon Limited 2 AVP Renewable Energies Limited 3 AVP RMC 4 Kanthan Blue Metals

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Divya Bagmar Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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