Press Release

Press Release

September 05, 2025

BIRAJA CONSTRUCTION
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	5.00	ACUITE BBB \| Stable \| Reaffirmed	-
Bank Loan Ratings	45.00	-	ACUITE A3+ \| Reaffirmed
Total Outstanding	50.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has reaffirmed the long-term rating of ‘ACUITE BBB’ (read as ACUITE Triple B) and the short term rating of ‘ACUITE A3+’ (read as ACUITE A Three plus) on the Rs.50.00 Crore bank loan facilities of Biraja Construction. The outlook is ‘Stable’.

Rationale for rating
The rating derives comfort from the experienced management in civil construction business leading to repeat orders and establish comfortable relationships with suppliers and customers. The rating takes into consideration the modest scale of operations marked by an operating income of Rs.142.32 Cr. in FY2025 (Prov.) as against Rs.137.53 Cr. in FY2024 and PAT Margin at 4.06 per cent in FY2025 (Prov.). Further, the company has unexecuted orders in hand of Rs.557.26 Crore as on July, 2025 providing revenue visibility. The rating also factors the moderate financial risk profile of the firm marked by gearing below unity at 0.05 times as on March 31, 2025(Prov.) along with interest coverage ratio and debt service coverage ratio at 35.08 times and 7.09 times respectively as on 31st March 2025 (Prov.) and adequate liquidity position marked by sufficient net cash accruals against the debt repayment obligations. However, the rating is constrained by dip in operating profitability, moderate working capital operations and geographic concentration risk as the firm caters to projects only in Orissa. Further going forward, ability of the firm to ramp up its operations through bagging new orders and timely execution of the existing orders will remain a key monitorable. Acuite also notes risk related to tender based nature of business, volatility in raw material prices and intense competition in the civil construction industry.

About the Company

Established in 2009, Biraja Construction is an Orissa based partnership firm. It has successfully completed various projects under different departments of government like rural development, Bridges, National Highway, Railway, IDCO, PWD, Odisha Construction Corporation. Biraja Construction receives majority of the contracts from the Government of Orissa and various municipal corporations in state of Orissa. The firm participates in tenders and executes orders for the various departments of Orissa which enables it to participate in higher value contracts. Mr. Birendra Kumar Mohanty, Mr. Gopal Chandra Mohanty, Mr. Duryodhan Rout, Mr. Niranjan Mohapatra, Ms. Jayashree Sujata Mohanty and Mr. Utkal Keshari Mohanty are the partners of the firm.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profile of Biraja Construction to arrive at this rating.

Key Rating Drivers

Strengths

Experienced management and established relationship with customers
The firm established in the year 2009 and has successfully completed various projects under different departments of government like rural development, water resources, National Highway, Railway, IDCO, PWD, Odisha Construction Corporation. Mr. Birendra Kumar Mohanty is the leading partner who is supported by the other partners of the firm. The long standing experience of the partners and long track record of operations has helped him to establish comfortable relationships with key suppliers and reputed customers. Acuité derives comfort from the long experience of the management and believes this will benefit the firm going forward, resulting in steady growth in the scale of operations.

Moderate Financial Risk Profile
The financial risk profile of the firm is marked by moderate net worth, low gearing and comfortable debt protection metrics. The net-worth of the firm stood at Rs.46.56 Crore as on 31st March 2025 (Prov.) as against Rs.38.10 Crore as on 31st March 2024. The increase in the net-worth is on an account of accretion of profits into reserves. The capital structure of the firm is marked by gearing below unity which stood at 0.05 times as on 31st March 2025 (Prov.) and 31st March 2024. Further, the coverage indicators of the firm are reflected by interest coverage ratio and debt service coverage ratio which stood at 35.08 times and 7.09 times respectively as on 31st March 2025 (Prov.) against 16.28 times and 11.80 times respectively as on 31st March 2024. The TOL/TNW ratio of the firm stood at 0.52 times as on 31st March 2025 (Prov.) against 0.81 times as on 31st March 2024 and DEBT-EBITDA of the firm stood at 0.23 times as on 31st March 2025 (Prov.) against 0.19 times as on 31st March 2024. Acuité expects that going forward the financial risk profile of the firm will remain in similar range with no major debt funded capex plans.

Weaknesses

Dip in revenue and operating profitability
The firm achieved operating income of Rs.142.32 Cr. in FY2025 (Prov.) against Rs.137.53 Cr. in FY2024 and Rs.169.34 Cr. in FY2023. The dip in revenue in FY2025 (Prov.) and FY2024 as compared to FY2023 is due to slowdown in execution of order book from last quarter of FY2024 onwards owing to the Central and State Election in Orrisa. The revenue was furthermore constrained in the second quarter of FY2025 due to monsoon thereby impacting execution of the projects. Further, the EBITDA margin of the firm stood at 3.91 percent in FY2025 (Prov.) against 4.20 per cent in FY2024 due to lower absorption of costs and PAT margin stood at 4.06 per cent in FY2025 (Prov.) against 4.05 percent in FY2024. The firm has clocked revenue of Rs.56.48 Cr. in 4M FY2026. The stability in revenue is backed by an unexecuted order book position to the tune of Rs.557.26 Crore as on July, 2025 (approximately 3.91x of revenue of the firm in FY2025 (Prov.)). The orders for infrastructure projects are primarily from Government of Orissa and various municipal corporations in state of Orissa and all its projects are on the direct tendering basis. Going forward, revenue and profitability of the firm is expected to improve on the back of execution of orders in hand along with incremental order book of the firm. However, ability of the firm to bag new orders and timely execution of the existing orders will remain a key monitorable.

Moderate Working Capital operations
The working capital operations of the firm is moderate marked by GCA days which stood at 107 days as on 31st March 2025 (Prov.) as against 101 days as on 31^st March 2024. The EPC business retains a naturally elevated working capital intensity, attributed to prolonged project execution timelines, payments tied to project milestones, and the release of retention money. The high GCA days is on account of high debtor days which stood at 77 days as on 31st March 2025 (Prov.) as against 71 days as on 31st March 2024 and other current assets which majorly includes loans and advances to parties, security and withheld deposits. Further, the inventory holding stood constant at only a day as on 31^st March 2025 (Prov.) and 31^st March 2024 and the creditor days stood at 7 days as on 31^st March 2025 (Prov.) against 91 days as on 31^st March 2024. In addition, the non fund based working capital limit utilisation of the firm stood at 83.64% for the last six months ended July, 2025. Acuité expects that working capital operations of the firm will remain at similar levels in near to medium term and ability of the firm to manage its working capital operations efficiently will remain a key rating sensitivity.

Competitive and fragmented nature of industry with geographic concentration
The firm has a long-standing presence of about 15 years in the industry with moderate scale of operations. The firm specialises in civil works related to construction of bridges and roads. The projects executed are tender based and the firm faces intense competition from large players, as well as many local and small unorganised players, which may hence require it to bid aggressively to get contracts. Also, given the cyclicality inherent in the construction industry, the ability to maintain profitability margin through operating efficiency becomes critical. Also, the firm is exposed to geographical concentration risk on account of being a regional player, with 100 per cent of the works executed in and around Orissa for Government of Orissa and various municipal corporations in state of Orissa. Acuité believes that diversification of the customer base will remain a key rating sensitivity.

Rating Sensitivities

Sustainability in the growth in scale of operations while improving profitability margins.
Timely execution of projects in hand.

Liquidity Position

Adequate

The liquidity profile of the firm is adequate marked by net cash accruals of Rs.7.48 Crore as on 31^st March 2025 (Prov.) against debt repayment obligations of Rs.0.80 Crore in the same period. Going forward, the firm is expected to generate net cash accruals under the range of Rs.8.50 Crore to Rs.9.50 Crore against debt repayment obligations up to Rs.0.85 Crore over the same period. In addition, the non fund based working capital limit utilisation of the firm stood at 83.64% for the last six months ended July, 2025. The current ratio of the firm stood at 2.46 times as on 31st March 2025 (Prov.) against 1.77 times as on 31st March 2024. The unencumbered cash and cash equivalents available with the firm stood at Rs.15.32 Crore as on 31st March 2025 (Prov.). Acuité expects liquidity profile of the firm to remain adequate in near to medium term marked by sufficient accruals to repayment, healthy current ratio and adequate cash and cash equivalents.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	142.32	137.53
PAT	Rs. Cr.	5.77	5.58
PAT Margin	(%)	4.06	4.05
Total Debt/Tangible Net Worth	Times	0.05	0.05
PBDIT/Interest	Times	35.08	16.28

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
07 Jun 2024	Bank Guarantee/Letter of Guarantee	Short Term	45.00	ACUITE A3+ (Upgraded from ACUITE A4+)
	Proposed Long Term Bank Facility	Long Term	1.00	ACUITE BBB \| Stable (Upgraded from ACUITE BB+)
	Cash Credit	Long Term	4.00	ACUITE BBB \| Stable (Upgraded from ACUITE BB+)
18 Sep 2023	Bank Guarantee/Letter of Guarantee	Short Term	45.00	ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+)
	Cash Credit	Long Term	4.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB \| Stable)
	Proposed Long Term Bank Facility	Long Term	1.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB \| Stable)
06 Jul 2022	Bank Guarantee/Letter of Guarantee	Short Term	45.00	ACUITE A3+ (Assigned)
	Cash Credit	Long Term	4.00	ACUITE BBB \| Stable (Assigned)
	Proposed Long Term Bank Facility	Long Term	1.00	ACUITE BBB \| 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
Punjab National Bank	Not avl. / Not appl.	Bank Guarantee/Letter of Guarantee	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	45.00	Simple	ACUITE A3+ \| Reaffirmed
Punjab National Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.00	Simple	ACUITE BBB \| Stable \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.00	Simple	ACUITE BBB \| Stable \| Reaffirmed

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Archita Sharma
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.

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