Product Quantum (Rs. Cr) (SEBI) Quantum (Rs. Cr) (Other FSR) Long Term Rating Short Term Rating Regulated By
Bank Loan Ratings 0.00 18.00 ACUITE BBB- | Stable | Reaffirmed - RBI
Bank Loan Ratings 0.00 46.00 - ACUITE A3 | Reaffirmed RBI
Total Outstanding 0.00 64.00 - - -
Total Withdrawn 0.00 0.00 - - -
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
 
Rating Rationale

­Acuité has reaffirmed its long term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) and short term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs.64.00 Cr. bank facilities of Dwarakamai Constructions Private Limited (DCPL). The outlook remains ‘Stable’.

Rationale for rating:
The rating reaffirmation factors in moderation in revenues amidst improving profitability and healthy financial risk profile, marked by low gearing and healthy debt protection metrics. The rating also draws comfort from experienced management and long operational track record of the company along with its order book position providing healthy revenue visibility over the medium term. However, these strengths are partly offset by the moderately intensive working capital operations high customer concentration risk, exposure to tender based operations and dependence on government spending cycles.


About the Company

Dwarakamai Constructions Private Limited (DCPL), established in 1995 and headquartered in Anantapur, Andhra Pradesh, is a family-owned enterprise engaged in civil construction activities. The company was originally incorporated as a partnership firm under the name Dwarakamai Constructions by Mr. Desai Madan Mohan Reddy along with other family members and was subsequently reconstituted as a private limited company in March 2011. Currently promoted by Mr. Desai Madan Mohan Reddy, Ms. Desai Sreedevi, Mr. A. Hari Krishna Reddy, and other members of the promoter family, DCPL undertakes construction of roads, highways, buildings, and infrastructure works. The company holds a ‘Special Class’ contractor status with the Governments of Andhra Pradesh and Telangana and primarily executes projects for government departments, including the Public Works Department, Roads & Buildings Department, and Irrigation & CAD Departments.

 
Unsupported Rating
­Not applicable
 
Analytical Approach
­Acuité has considered the standalone financial and business risk profile of Dwarakamai Constructions Private Limited (DCPL) to arrive at the rating.
 
Key Rating Drivers

Strengths

Established track record supported by experienced promoters and strong order book:
Dwarakamai Constructions Private Limited (DCPL) is a ‘Special Class’ civil contractor with an established track record of executing infrastructure projects including roads, bridges, irrigation works, and buildings for government and private sector clients. The company benefits from the extensive experience of its promoters, led by Mr. Desai Madan Mohan Reddy, who has over three decades of experience in the civil construction industry, and has developed longstanding relationships with various government departments such as Roads & Buildings and Panchayat Raj divisions. DCPL has a strong outstanding order book of Rs.947.04 crore as on March 31, 2026, which is approximately four times the revenue of FY2026 (Prov.), providing healthy revenue visibility over the medium term. The order book is diversified across Andhra Pradesh, Karnataka, and Telangana and is expected to be executed over the next 12–36 months. Acuité believes that DCPL will continue to benefit from its established track record, experienced management, and healthy order book, which provides revenue visibility over the medium term.

Moderation in revenues amidst improvement in profitability:
DCPL reported revenue of Rs.192.98 Cr. in FY2026 (Prov.), reflecting a marginal decline of ~8 percent compared to Rs.209.53 Cr. in FY2025. The decline in revenue was primarily on account of delays in execution of road and building projects during the year due to budgetary constraints. The company’s revenue profile remains exposed to such delays inherent in government-linked projects. DCPL has demonstrated an improvement in its profitability during FY2026 despite moderation in revenues. The operating margin improved to 8.67 percent in FY2026 (Prov.) from 7.33 percent in FY2025, driven by strategic diversification from road projects to railway works and execution of relatively higher-margin contracts. Consequently, the PAT margin improved to 5.20 percent in FY2026 (Prov.) from 4.59 percent in FY2025. Acuité believes that the company’s profitability is expected to remain supported by a favorable project mix and improved execution capabilities.

Healthy financial risk profile:
DCP’s financial risk profile remained healthy, marked by moderate net worth, low gearing and healthy debt protection metrics. The company’s net worth improved to Rs.67.89 Cr. as on March 31, 2026 (Prov.) against Rs.57.86 Cr. as on March 31, 2025, due to accretion of profits to reserves during the period. The overall debt level of the company declined to Rs.20.28 Cr. (comprising Rs.0.82 Cr. of long-term debt, Rs.7.09 Cr. unsecured loans, Rs.10.95 Cr. short-term debt and Rs.1.41 Cr. current maturities of long-term debt) from Rs.30.21 Cr. as on March 31, 2025. Consequently, the gearing and total outside liabilities to tangible net worth (TOL/TNW) levels improved to 0.30 times and 0.97 times as of March 31, 2026 (Prov.) respectively from 0.52 times and 1.25 times as on March 31, 2025 respectively. Additionally, the debt protection metrics remained healthy with debt service coverage ratio (DSCR) and interest coverage (ICR) of 2.95 times and 7.06 times respectively as on March 31, 2026 (Prov.). Debt to EBITDA also improved to 1.20 times as on March 31, 2026 (Prov.) from 1.84 times as on March 31, 2025. Acuite believes that the financial risk profile of the company will remain healthy over the medium term supported by lower debt levels.


Weaknesses

Customer concentration risk:
Dwarakamai Constructions Private Limited (DCPL) faces high customer concentration risk, with about 83% of its business dependent on three key government clients like R&B Department (Nizamabad), MoRTH, and South Central Railways. This reliance exposes the company to risks from delays in approvals, payments, or policy changes. Any adverse developments with these clients could impact revenue stability. Diversifying its customer base remains important to reduce this risk.

Moderately intensive nature of working capital operations:
The working capital operations of the company are moderately intensive as reflected by the gross current asset (GCA) of 184 days in FY2026 (Prov.) against 162 days in FY2025. The elongation in GCA is due to presence of high amounts of EMD deposits, retention money receivables and advances to suppliers in form of other current assets. The in inventory days which primarily consists work-in-progress stood at 16 day in FY2026 (Prov.) compared to 12 days in FY2025. The debtor days remained at 5 days in both FY2026 (Prov.) and FY2025, reflecting timely collections form the respective departments. The creditor days, which also includes payables to sub-contractors, stood at 96 days in FY2026 (prov.) against 46 days in FY2025. The fund based working capital limits were utilized moderately at an average of ~43 percent over the past 12 months ending May 2026.
Acuite believes that the working capital operations of the company will remain moderately intensive on account of the nature of the business.

Exposure to tender based business risks and government spending cycles:
DCPL’s operations remain exposed to risks inherent in the EPC/construction sector, particularly due to its tender-based nature of business, which subjects the company to intense competition, pricing pressures and uncertainty in order inflows. Additionally, the company’s revenue profile is closely linked to government spending and budgetary allocations, making it vulnerable to delays in project approvals, fund releases and execution timelines. Any slowdown or disruption in government spending cycles could adversely impact the company’s order inflow, execution pace, and overall financial performance.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:
  • Significant growth in operating scale with sustained improvement in profitability
  • Improvement in financial risk profile.
  • Improvement in working capital management with GCA below 150 days on a sustained basis
Potential triggers (individual or collective) for a downward rating action:
  • Significant decline in revenues and profitability.
  • Deterioration in financial risk profile with debt service coverage ratio (DSCR) below 1.5 times.
  • Further elongation in working capital cycle exerting pressure on liquidity.
Liquidity Position
Adequate

DCPL’s liquidity is adequate as reflected through net cash accruals (NCA’s) of Rs.11.16 Cr. as on March 31, 2026 (Prov.) against the repayment obligation of Rs.2.20 Cr. for the same period. NCA’s are expected to range between Rs.11.60-13.00 Cr. over the medium term while debt repayment obligations are expected to be in the range of Rs.1.10-1.40 Cr. The company’s current ratio stood at 2.83 times as on March 31, 2026 (Prov.) and the working capital operations remained moderately intensive with GCA 184 days in FY2026 (Prov.). The fund based bank limits were utilized at an average of ~43 percent during the past 12 months ending May, 2026. The company has Rs.12.47 Cr. unencumbered cash and bank balances providing additional liquidity comfort.
Acuite believes that the liquidity position of the company will remain adequate over the medium term on account of sufficient cash accruals against repayment obligations and buffer available from the moderately utilized working capital limits.

 
Outlook: Stable
­
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 26 (Provisional) FY 25 (Actual)
Operating Income Rs. Cr. 192.98 209.53
PAT Rs. Cr. 10.03 9.61
PAT Margin (%) 5.20 4.59
Total Debt/Tangible Net Worth Times 0.30 0.52
PBDIT/Interest Times 7.06 7.58
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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
13 Mar 2025 Bank Guarantee (BLR) Short Term 39.00 ACUITE A3 (Reaffirmed)
Bank Guarantee (BLR) Short Term 7.00 ACUITE A3 (Reaffirmed)
Cash Credit Long Term 13.00 ACUITE BBB- | Stable (Reaffirmed)
Cash Credit Long Term 5.00 ACUITE BBB- | Stable (Reaffirmed)
14 Dec 2023 Bank Guarantee (BLR) Short Term 39.00 ACUITE A3 (Reaffirmed)
Bank Guarantee (BLR) Short Term 7.00 ACUITE A3 (Reaffirmed)
Cash Credit Long Term 13.00 ACUITE BBB- | Stable (Reaffirmed)
Cash Credit Long Term 5.00 ACUITE BBB- | Stable (Reaffirmed)
­

Lender’s Name ISIN Facilities Listing Status Regulated By Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)
Complexity Level Rating
KOTAK MAHINDRA BANK LIMITED Not avl. / Not appl. Bank Guarantee (BLR) Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 39.00 Simple ACUITE A3 | Reaffirmed
H D F C Bank Limited Not avl. / Not appl. Bank Guarantee (BLR) Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.00 Simple ACUITE A3 | Reaffirmed
KOTAK MAHINDRA BANK LIMITED Not avl. / Not appl. Cash Credit Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 13.00 Simple ACUITE BBB- | Stable | Reaffirmed
H D F C Bank Limited Not avl. / Not appl. Cash Credit Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE BBB- | Stable | Reaffirmed
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Contacts

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