Press Release January 02, 2025 BINDAL DEVELOPERS Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	16.00	ACUITE BB+ | Negative | Assigned	-
Bank Loan Ratings	26.00	ACUITE BB+ | Negative | Reaffirmed | Stable to Negative	-
Bank Loan Ratings	9.00	-	ACUITE A4+ | Assigned
Bank Loan Ratings	49.00	-	ACUITE A4+ | Reaffirmed
Total Outstanding	100.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

ACUITE has reaffirmed its long-term rating of 'ACUITE BB+' (read as ACUITE double B plus) and the short-term rating of 'ACUITE A4+' (read as ACUITE A four plus) on the Rs.75.00 Crore bank facilities of Bindal Developers. The outlook is revised from ‘Stable’ to 'Negative'. ACUITE has assigned its long-term rating of 'ACUITE BB+' (read as ACUITE double B plus) and the short-term rating of 'ACUITE A4+' (read as ACUITE A four plus) on the Rs.25.00 Crore enhancement of bank facilities of Bindal Developers. The outlook is 'Negative'. Rationale for outlook change and reaffirmation: The reaffirmation and revision in outlook takes into account the improvement in scale of operations backed by healthy execution of orders and  moderate financial risk profile  marked by increasing gearing, TOL/TNW, debt-ebtida on account of increase in debt levels. Further, the rating considers the experienced management in the industry which has helped firm to intake orders from reputed clients. It also factors the moderate order book position of Rs.378 crore as on 31 October 2024 which translates into revenue visibility of 2.35x of  FY2024.  These strengths are partly off-set by working capital intensity in the operations, risk of capital withdrawal associated with proprietorship firms and highly competitive nature of industry due to tender based nature of operations.

About the Company

Madhya Pradesh based, ­Bindal Developers is a proprietorship concern with Mr. Narsingh Bindal as proprietor. The firm was established in 2007 and is engaged in civil construction activities for last 15 years. The firm is engaged in Construction of Roads, Buildings & Bridges, Canal, bunds & barrage etc.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has taken the standalone view on the business and financial risk profile of Bindal Developers.

Key Rating Drivers

Strengths

Established track record of operations with experienced management The firm has an established track record of operations for more than a decade in construction industry. The firm is engaged in civil construction activities majorly into construction of Roads, Buildings & Bridges, Canal, bunds & barrage etc. is majorly handling government projects such as Rural Road under Pradhan Mantri Gram Sadak Yojana, construction of four lanes CC roads etc. and handling projects through sub-contracting from big contractors and executed L&T infrastructures and Adani road projects. Currently the proprietor of the firm is by Mr. Narsingh Bindal, who has been associated with this industry for over a decade. Acuité believes that the firm will continue to benefit from its established operations in the construction industry along with reputed clientele over the medium term.   Augmentation in business risk profile The firm has reported significant improvement with YOY growth of 43.78 percent in FY2024 as compared to FY2023. Revenues stood at Rs.161.01 Crore in FY24 against Rs.111.98 Crore in FY23. The reason for improvement in the revenue is on account better execution of orders and moderate order book position. Further, the operating margin was in the range of 10.36 percent to 9.93 percent over the past two years ending in FY2024. In the current fiscal year, the firm has achieved revenues worth Rs.92 Cr. till December 2024. Acuité believes the revenue and operating margins to be fairly stable in the short term, improving marginally over the medium term in line with moderate order book position.

Weaknesses

Moderate Financial Risk Profile The financial risk profile of the firm is moderate marked by moderate net worth, high gearing and average debt protection metrics. The networth of the firm stood at Rs.22.65 Crore as on 31st March 2024 against Rs.16.70 Crore as on 31st March 2024. The increase in the net worth is due to accumulation of profits in the same year. The total debt of the firm stood at Rs.112.29 crore as on 31st March 2024 against Rs.69.78 Crore as on 31st March 2023. Further, the gearing ratio of the firm stood high at 4.96 times as on 31st March 2024 against 4.18 times as on 31st March 2023. The TOL/TNW ratio stood high at 6.24 times as on 31st March 2024 against 5.83 times as on 31st March 2023. In addition, the debt protection metrics stood with interest coverage ratio and debt service coverage ratio of the firm stood at 2.58 times and 1.08 times respectively as on 31st March 2024 against 2.87 times and 1.20 times respectively as on 31st March 2024. Going forward, Acuité believes the financial risk profile of the firm will remain  in near to medium term. Working Capital Operations Working capital operations of Bindal Developers are intensive, as evident from the gross current assets (GCA) of 265 days in FY24 against 243 days in FY23. This is largely driven by high inventory days of 53 days in FY24 as against 33 days in FY23 due to the high levels of WIP. The debtor days improved to 64 days in FY24, against 96 days in FY23. Further, the creditor days of the group stood at 89 days in FY24, against 142 days in FY23. Intensive working capital cycle has led to higher reliance on the fund-based working capital limits, which were utilized at an average of ~85.97 percent in past 06 months ending November 30, 2024. Risk of capital withdrawal BD’s constitution as a proprietary firm is exposed to discrete risks, including the possibility of withdrawal of capital by the proprietor. Moreover, the proprietorship nature partially limits the flexibility to raise the funds vis -à-vis a limited company. Acuité believes that any substantial withdrawal of capital by the proprietor is likely to have an adverse impact on the capital structure. Highly Competitive Industry The infrastructure is a fairly fragmented industry with a presence of few large pan India players where subcontracting & project specific partnerships for technical/financial reasons are fairly common. The firm faces stiff competition with its competitors in procuring orders through bidding, immense competition for procuring tenders leads to very competitive pricing which in turn lead to stress on the margins. Moreover, susceptibility of raw material pricing again keeps profit margin vulnerable risk and key sensitivity factor. However, presence of price escalation clause prevents the firm from exposure to raw material price fluctuations to some extent. Also, the vast experience of the promoters gives the firm an edge in procuring big size ticket orders but the stability of the order size in diversified segment is the key sensitive.

Rating Sensitivities

Any deterioration in Revenue profile and leverage position of the company Any deterioration in working capital cycle and liquidity profile of the company. Execution of its order book.

Liquidity Position

Adequate

The liquidity Profile of the firm is adequate. The firm have generated sufficient net cash accruals of Rs.13.45 Crore as on 31st March 2024 against the debt repayment obligations of Rs.11.89 Crore in the same period. Further, the firm is expected to generate the enough net cash accruals in near future against the debt repayment obligation of same period. The current ratio of the firm stood at 1.55 times as on 31st March 2024 against 1.13 times as on 31st March 2023. The consolidated average fund based bank limit utilisation of the firm stood at 85.97% in last 6 months ending November 2024. Acuité believes that the liquidity of the firm is likely to improve over near to medium term owing to increase in scale of operations and margins.

Outlook: Negative

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	161.01	111.98
PAT	Rs. Cr.	9.26	5.94
PAT Margin	(%)	5.75	5.30
Total Debt/Tangible Net Worth	Times	4.96	4.18
PBDIT/Interest	Times	2.58	2.87

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

­Not Applicable

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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 05 Oct 2023 Bank Guarantee (BLR) Short Term 13.00 ACUITE A4+ (Assigned) Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Assigned) Bank Guarantee (BLR) Short Term 8.25 ACUITE A4+ (Assigned) Proposed Short Term Bank Facility Short Term 9.00 ACUITE A4+ (Assigned) Cash Credit Long Term 7.00 ACUITE BB+ | Stable (Assigned) Working Capital Demand Loan (WCDL) Long Term 3.00 ACUITE BB+ | Stable (Assigned) Cash Credit Long Term 11.00 ACUITE BB+ | Stable (Assigned) Secured Overdraft Long Term 3.00 ACUITE BB+ | Stable (Assigned) Cash Credit Long Term 2.00 ACUITE BB+ | Stable (Assigned) Proposed Long Term Bank Facility Long Term 6.00 ACUITE BB+ | Stable (Assigned) Proposed Long Term Bank Facility Long Term 0.75 ACUITE BB+ | Stable (Assigned)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Kotak Mahindra Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 18.00 Simple ACUITE A4+ | Reaffirmed HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4+ | Reaffirmed Yes Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.25 Simple ACUITE A4+ | Reaffirmed Union Bank of India Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE A4+ | Assigned Kotak Mahindra Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.00 Simple ACUITE BB+ | Negative | Reaffirmed | Stable to Negative HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 13.00 Simple ACUITE BB+ | Negative | Reaffirmed | Stable to Negative HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.00 Simple ACUITE BB+ | Negative | Assigned Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BB+ | Negative | Assigned Union Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.00 Simple ACUITE BB+ | Negative | Assigned Not Applicable Not avl. / Not appl. Proposed Short Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 6.00 Simple ACUITE A4+ | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Short Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.75 Simple ACUITE A4+ | Reaffirmed Yes Bank Ltd Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE BB+ | Negative | Reaffirmed | Stable to Negative Kotak Mahindra Bank Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE BB+ | Negative | Reaffirmed | Stable to Negative

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Contacts

Mohit Jain Senior Vice President - Rating Operations Patel Sneh 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. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.