Press Release January 30, 2025 BINDAL DEVELOPERS Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	42.00	ACUITE BB+ | Stable | Reaffirmed | Negative to Stable	-
Bank Loan Ratings	58.00	-	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Total Withdrawn	0.00	-	-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.100.00 Crore bank facilities of Bindal Developers (BD). The outlook is revised from ‘Negative’ to ' Stable'. Rationale for outlook change and reaffirmation: Acuite wide its press release dated 2nd January 2025 changed the outlook of the rating from 'Stable' to 'Negative'. In response the client has appealed against same and provided the clarification which resulted in the improvement of the financial risk profile of the firm. Therefore we revise the outlook of the rating from 'Negative' to 'Stable'. The reaffirmation takes into account the improvement in scale of operations backed by healthy execution of orders and moderate financial risk profile. Further, the rating considers the experienced management and moderate order book position. However, the rating is constrained by working capital intensive operations, risk of capital withdrawal associated with proprietorship firms and tender based nature of business in a highly competitive nature of industry.

About the Company

Madhya Pradesh based, Bindal Developers (BD) is a proprietorship concern of Mr. Narsingh Bindal. The firm was established in 2007 and 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 civil construction industry. The firm is engaged in construction of Roads, Buildings & Bridges, Canal, bunds & barrage etc. for  government projects such as Rural Road under Pradhan Mantri Gram Sadak Yojana, construction of four lanes CC roads etc. and also as a sub-contractor for main contractors such as L&T infrastructures and Adani Road projects. The proprietor, Mr. Narsingh Bindal, 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 an improvement in revenues which stood at Rs.161.01 Crore in FY2024 against Rs.111.98 Crore in FY2023 due to increase in execution of orders. The firm achieved revenues of Rs.92.00 Crore for 9MFY25. The company is having moderate order book of Rs 378.00 Crore as on 31st October, 2024, which gives revenue visibility for the medium term. Further, the operating margin was in the range of 10.36 percent to 9.93 percent over the past two years ending in FY2024. The improvement is due to better margins in the contracts of the firm. Acuité believes the business risk profile of the firm will remain stable in the medium owing to the steady improvement in operating performance. Moderate Financial Risk Profile The financial risk profile of the firm remained moderate marked by moderate net worth, high gearing and average debt protection metrics. The net worth of the firm stood at Rs.63.60 Crore as on March 31, 2024 as against Rs.34.28 Crore March 31, 2023. The increase in net worth is due to increased Quasi Equity to Rs 40.95 Crore which management has given undertaking to retain in the business in medium to long term along with accumulation of profits. The total debt of the firm stood at Rs.71.35 Crore March 31, 2024 as against Rs.52.21 Crore March 31, 2023. Further, the gearing ratio of the firm improved and stood at 1.12 times in FY2024 against 1.52 times in FY2023. The TOL/TNW ratio stood high at 1.58 times in FY2024 against 2.33 times in FY2023. The debt protection metrics stood moderate with interest coverage ratio and debt service coverage ratio at 2.58 times and 1.08 times respectively in FY2024 against 2.87 times and 1.20 times respectively in FY2023. Acuité believes the financial risk profile of the firm will remain moderate owing to absence of debt funded capex and moderate net worth base.

Weaknesses

Working Capital intensive Operations Bindal Developers operations remained working capital intensive as evident in the gross current assets (GCA) of 265 days in FY2024 against 243 days in FY23. This is largely driven by high inventory days of 53 days in FY2024 as against 33 days in FY2023. The debtor days improved to 64 days in FY2024, against 96 days in FY23. Further, the creditor days of the group stood at 89 days in FY2024, against 142 days in FY23. The working capital limit utilization remained high at ~85.97 percent in past six months ending November 30, 2024. Risk of capital withdrawal Bindal Developers 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. The firm’s capital was withdrawn to the extent of Rs. 3.96 Crore in FY2024 and Rs. 1.51 Crore in FY2023. Acuité believes that any substantial withdrawal of capital by the proprietor is likely to have an adverse impact on the capital structure and thereby overall financial risk profile of the firm. Highly Competitive Industry The civil construction is a 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. 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

Sustained improvement in revenues and profitability  Working capital management Deterioration in the financial risk profile owing to withdrawal of capital or debt funded capex

Liquidity Position

Adequate

The liquidity Profile of the firm is adequate. The firm generated sufficient net cash accruals of Rs.13.45 Crore in FY2024 against the debt repayment obligations of Rs.11.89 Crore in the same period. Further, the firm is expected to generate net cash accruals of Rs. 13.97-15.85 Crore  against debt repayment obligation of Rs. 9.54-7.38 Crore for the same period. The current ratio of the firm stood at 1.55 times in FY2024 against 1.13 times in FY2023. The consolidated average fund based bank limit utilization of the firm stood at 85.97 per cent in last 6 months ending November 2024. Acuité believes that the liquidity of the firm is likely to remain adequate due to steady net cash accruals as against moderate debt repayment obligations.

Outlook: Stable

­

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	1.12	1.52
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 02 Jan 2025 Bank Guarantee (BLR) Short Term 18.00 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 8.25 ACUITE A4+ (Reaffirmed) Proposed Short Term Bank Facility Short Term 6.00 ACUITE A4+ (Reaffirmed) Proposed Short Term Bank Facility Short Term 4.75 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 9.00 ACUITE A4+ (Assigned) Cash Credit Long Term 2.00 ACUITE BB+ | Negative (Assigned) Cash Credit Long Term 10.00 ACUITE BB+ | Negative (Assigned) Cash Credit Long Term 4.00 ACUITE BB+ | Negative (Assigned) Cash Credit Long Term 7.00 ACUITE BB+ | Negative (Reaffirmed (Stable to Negative)) Working Capital Demand Loan (WCDL) Long Term 3.00 ACUITE BB+ | Negative (Reaffirmed (Stable to Negative)) Cash Credit Long Term 13.00 ACUITE BB+ | Negative (Reaffirmed (Stable to Negative)) Secured Overdraft Long Term 3.00 ACUITE BB+ | Negative (Reaffirmed (Stable to Negative)) 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)

­

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+ | Reaffirmed 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable 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+ | Stable | Reaffirmed | Negative to Stable

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.