­Incorporated in 2010 by Mr. Raj Singh and Mr. Chaman Singh, DCIPL is a Delhi-based company involved in the construction of roads and subways for both government and private entities. It is a class “AA” contractor with Ghaziabad Development Authority, Noida Development Authority and various Public Works Departments (PWDs). The promoters of the company have been in this line of business for the past two decades (earlier, promoters were engaged in the same line of business as a sub-contractor through a proprietorship concern till 2010).

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

­­Improvement in the business risk profile led by the receipt of new orders
Substantial improvement in working capital management
Any deterioration of its financial risk profile and liquidity position

­Not Applicable

The company has a stretched liquidity position marked by low net cash accruals against the maturing debt obligations. The company generated cash accruals of Rs.15.34 crore in FY23(Prov) as against maturing debt obligations of Rs. 15.04 Cr ( excluding Rs.15.24 cr of revolving credit facility availed for procurement of raw material ) over the same period. The company is estimated to generate cash accruals of Rs.18.84-19.72 crore over the period 2024-2025 against maturing debt obligations of Rs.0.74-5.00 crore over the same period. The company maintains unencumbered cash and bank balance of Rs.0.42 crore as on March 31, 2023(Prov). The current ratio is moderate at 1.71 times as on March 31, 2023(Prov).

­Acuité believes that DCIPL will maintain a ‘Stable’ outlook and will continue to derive benefit over the medium term due to its extensive experience of promoters and moderate financial risk profile. The outlook may be revised to ‘Positive’, if the company demonstrates substantial and sustained growth in its revenues from the current levels while maintaining its capital structure. Conversely, the outlook may be revised to ‘Negative’ if the company generates lower-than-anticipated cash accruals, most likely due to significant debt-funded capex or any significant withdrawal of capital, thereby impacting its financial risk profile, particularly its liquidity.

­None

­None

­­­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.