| Established track record along with experienced promoters
H R Square Private Limited (HRSPL), incorporated in 2011 and converted from an LLP to a private limited company on May 08, 2024, is engaged in municipal solid waste management (MSWM), manpower outsourcing, warehouse handling, haulage and housekeeping services. Over the years, the company has diversified from manpower outsourcing into long-term waste management projects and logistics support services for reputed clients such as Flipkart and Indian Oil Corporation Limited (IOCL). HRSPL currently executes integrated waste management projects for government authorities including LAD Puducherry, PUDA Yanam and IIT Kharagpur. The company is promoted by Mr. Dantuluri Vijay Kumar Raju and Mrs. Dantuluri Parvathi Devi, who possess over two decades of experience in manpower management, waste management and project execution. Acuite believes that HRSPL's established operating track record, experienced management team, long-term government contracts and diversified service portfolio will continue to support its business profile and growth prospects over the medium term.
Modest scale of operations with improving profitability
HRSPL's operating performance remained stable during FY24-FY26 (Prov.), with operating income improving to Rs.116.00 crore in FY26 (Prov.) from Rs.107.25 crore in FY25 and Rs.106.73 crore in FY24, supported by growth in MSWM activities and recurring service contracts. The contribution from the MSWM segment increased to Rs.47.28 crore in FY26 from Rs.34.42 crore in FY25 and Rs.30.82 crore in FY24, improving revenue diversification.Profitability improved steadily, with EBITDA increasing to Rs.15.63 crore (13.48%) in FY26 (Prov.) from Rs.14.24 crore (13.28%) in FY25 and Rs.11.92 crore (11.17%) in FY24, supported by a favourable business mix and operating leverage. Consequently, PAT improved to Rs.6.70 crore (5.77%) in FY26 (Prov.) from Rs.6.14 crore (5.72%) in FY25 and Rs.5.65 crore (5.29%) in FY24. Further, the company reported revenue of Rs.33.71 crore in Q1 FY27. Acuite believes HRSPL's stable operating profile, improving profitability, recurring revenue streams and long-term MSWM contracts will continue to support its operating performance over the medium term.
Moderate financial risk profile
HRSPL's financial risk profile is moderate, supported by modest net worth, comfortable capital structure and adequate debt protection metrics. The company’s net worth improved to Rs.20.90 crore in FY26 (Prov.) from Rs.17.33 crore in FY25 and Rs.13.86 crore in FY24, supported by profit retention and continued promoter support through quasi-equity of Rs.4.20 crore as on March 31, 2026 (Prov.). Total debt remained at a manageable level of Rs.23.91 crore in FY26 (Prov.), comprising of long-term borrowings of Rs.7.80 crore, and short-term borrowings of Rs.16.11 crore, as against Rs.22.33 crore in FY25 and Rs.23.24 crore in FY24. The capital structure remained comfortable, with gearing improving to 1.14x in FY26 (Prov.) from 1.29x in FY25 and 1.68x in FY24, while TOL/TNW improved to 1.47x from 1.60x and 2.56x, respectively. Debt protection metrics remained adequate, with interest coverage ratio (ICR) improving to 5.65x in FY26 (Prov.) from 4.87x in FY25 and 4.69x in FY24. Further, debt service coverage ratio (DSCR) improved to 2.62x in FY26 (Prov.) from 1.11x in FY25 and 3.83x in FY24, while Debt/EBITDA moderated to 1.53x from 1.69x and 1.93x, respectively. Acuite believes HRSPL's financial risk profile would remain moderate over the medium term on the back of modest net worth base.
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| Moderately intensive working capital operations
HRSPL's working capital operations are moderately intensive, reflected by gross current asset (GCA) of 97 days in FY26 (Prov.), as against 74 days in FY25 and 96 days in FY24, driven primarily by higher receivables and other current assets. Debtor days stood at 54 days in FY26 (Prov.), as against 21 days in FY25 and 60 days in FY24. Nevertheless, receivable collection periods generally remain within 30-60 days, indicating a manageable collection cycle despite the company's exposure to government and municipal authorities. Average utilisation of fund-based bank facilities remained moderate at 78.19% during the six months ended April 2026, while non-fund-based utilisation stood at 66.19%. Acuite believes the working capital profile is likely to remain moderate, supported by the company's recurring revenue base and established collection track record, although timely realization of receivables from government counterparties and efficient management of advances will remain key monitorables.?
Exposure to regulatory risk and tender-based nature of business
The company derives a significant portion of its business through competitive tenders floated by municipal corporations and government authorities. Accordingly, business growth remains dependent on timely award and renewal of contracts, regulatory compliance and government spending on waste management initiatives. However, the risk is mitigated by HRSPL's established execution track record, healthy order book of Rs.406.68 crore, long-tenure MSWM contracts with escalation and extension clauses, and long-standing relationships with government authorities and reputed customers.
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