| Established industrial centre in western Madhya Pradesh
Dewas, located on the Malwa Plateau in western Madhya Pradesh, approximately 150 km from Bhopal and about 35 km from Indore, is one of the state's prominent industrial centres. The city is home to several established industrial units, including those engaged in auto components, pharmaceuticals, engineering products, chemicals and edible oils. Further, Dewas houses the Bank Note Press, a unit under the Government of India engaged in the printing of currency notes and other security documents, which adds to the city's industrial significance. Dewas Municipal Corporation (DMC) provides key urban civic services including water supply, sewerage, sanitation, solid waste management and road infrastructure. The city has witnessed steady improvement in urban infrastructure and service delivery over the years. DMC has also undertaken various initiatives towards strengthening water supply and sewerage infrastructure, improving environmental sustainability and enhancing the quality of urban services for residents. Further, Dewas continues to be covered under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, which focuses on making cities water-secure through universal water supply coverage, strengthening sewerage and septage management systems, rejuvenation of water bodies and development of green spaces.
Consistent improvement in revenue, while profitability margins remained stable
The total operating income of DMC improved to Rs. 208.54 crore in FY26 (Prov.) from Rs. 172.62 crore in FY25. In FY26 (Prov.), the revenue profile comprised primarily of grants, contributions and subsidies received from the Government of Madhya Pradesh (around 52 per cent of total revenues), followed by assigned revenues (around 26 per cent), tax revenues (around 16 per cent), and fees and other user charges (around 6 per cent). The growth in revenues during FY26 (Prov.) was primarily driven by higher grants and subsidies received from the state government. The operating margin remained comfortable, albeit moderated, at 35.51 per cent in FY26 (Prov.) as compared to 37.65 per cent in FY25. The net margin improved marginally to 2.33 per cent in FY26 (Prov.) from 2.18 per cent in FY25, supported by lower interest costs incurred during the year.
Strong financial risk profile
The financial risk profile of DMC is strong marked by strong net worth, low gearing and comfortable debt protection metrics. The net worth of DMC stood at Rs. 647.18 crore as on 31st March 2026 (Prov.) as against Rs. 640.41 crore as on 31 March 2025. The net worth majorly includes Municipal Fund, Embarked Funds and Grants, Contributions for specific purpose. The gearing levels stood rangebound at 0.03 times as on 31st March 2026 (Prov.) depicting a conservative leverage policy employed by the corporation. DMC has a total debt of Rs. 19.97 crore as on 31 March 2026 (Prov.). The debt protection metrics remains comfortable with interest coverage ratio (ICR) of 34.13 times for FY26 (Prov.) and Debt Service Coverage Ratio (DSCR) of 34.13 times for FY26 (Prov.).
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| Higher buildup in receivables
DMC's receivables remained elevated, albeit with a marginal improvement, as reflected by debtor days of 350 days in FY26 (Prov.) as against 380 days in FY25. Historically, DMC tracked property tax assessment and collection manually. However, since FY22, the municipality has adopted GIS/GPS-based mapping, which led to the identification of additional taxable properties and a consequent increase in property tax demand. While the expanded assessment base strengthened the revenue potential of the municipality, collections against these newly identified and legacy outstanding dues have remained moderate. Consequently, the receivables position continues to remain sizeable, resulting in elevated debtor levels. As on March 31, 2026, total sundry debtors stood at Rs. 84.27 crore, comprising primarily property tax receivables of Rs. 54.36 crore and water tax receivables of Rs. 28.99 crore.
Delays in debt servicing
Recurring instances of delays have been observed in the recovery of monthly interest from the term loan account during the recent period. Interest for April, May, June and July 2026 was recovered with delays of 02, 08, 06 and 01 day, respectively, despite adequate funds being available in the current account and standing instructions being in place for timely recovery. Going forward, timely servicing of debt obligations will be a key rating monitorable.
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