Press Release November 19, 2024 KRAM INFRACON PRIVATE LIMITED Rating Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	76.00	ACUITE BBB+ | Stable | Upgraded	-
Bank Loan Ratings	74.00	-	ACUITE A2 | Upgraded
Total Outstanding	150.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has upgraded its the long term rating to ‘ACUITE BBB+' (read as ACUITE triple B plus) from ‘ACUITE BBB' (read as ACUITE triple B) and the short term rating to 'ACUITE A2' (read as ACUITE A two) from 'ACUITE A3+' (read as ACUITE A three plus) on the Rs 150.00 crore bank facilities­ of Kram Infracon Private Limited. The outlook is ‘Stable’. Rationale for Upgrade The rating upgrade takes into account the improved business risk profile of the company marked by growth in  business operations as reflected by revenues of Rs. 430.86 Cr. in FY24 compared to RS. 339.97 Cr. in FY23, healthy financial risk profile, strong liquidity and healthy order book.  However, the rating is constraint by intensive working capital operations and decline in operating margins of the company.

About the Company

­Kram Infracon Private Limited (KIPL) was incorporated in February 2016, by Mr. Rahul Kumar and Mr. Sachin Gaur. It is registered in Noida (UP) Himanshu Kant & Navin Mittal are director of company The company is engaged in construction of roads, highways, bridges, irrigation, and other infrastructure projects. In addition to this, the KIPL also provides consultancy and advisory services in the fields of engineering and constructions services to other entities. The present directors are Mr. Himanshu Kant, Mr. Avadhesh Chandra Srivastava, Mr. Navin Kumar Mittal, and Mr. Deepesh Kumar Sharma.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone business and financial risk profile of Kram Infracon Private Limited to arrive at the rating.

Key Rating Drivers

Strengths

­Revenue and Profitability The company witnessed an improvement in its scale of operations marked by an operating income of Rs. 430.86 Cr. in FY2024 as against Rs. 339.97 Cr. in FY2023. The EBITDA margin of the company stood at 7.12 per cent in FY2024 as against 8.75 per cent in FY2023. This is mainly due to new orders bagged in diversified geographies, increase in sub- contracting cost and bidding at low margins for bagging the fresh orders. The PAT margin of the company stood at 4.42 per cent in FY2024 against 4.36 per cent in FY2023. Though the company’s profitability is exposed to volatility in raw material, it has an in-built price escalation clause for major raw materials in most of its contracts. Acuité believes that the company is expected to have better top-line in near to medium term supported by stable margins as compared to previous years on account of better order book. Healthy Financial Risk Profile The financial risk profile of the company is healthy marked by net-worth of Rs. 118.29 Crore as on 31st March 2024 against Rs. 99.34 Crore as on 31st March 2023. Further, the total debt of the company stood at Rs. 16.54 Crore as on 31st March 2024 against Rs. 17.40 Crore as on 31st March 2023. The capital structure of the company is comfortable marked by gearing ratio of the company which stood at 0.14 times as on 31st March 2024 against 0.18 times as on 31st March 2023. Further, the coverage indicators of the company improved reflected by interest coverage ratio and debt service coverage ratio of the company which stood at 5.90 times and 2.19 times respectively as on 31st March 2024 against 5.51 times and 1.75 times respectively as on 31st March 2023. The TOL/TNW ratio of the company stood at 1.34 times as on 31st March 2024 against 1.26 times as on 31st March 2023 and DEBT-EBITDA of the company stood at 0.49 times as on 31st March 2024 against 0.64 times as on 31st March 2023. Acuite believes that with ongoing capex of Rs. 10 Cr. of machinery equipment's the company we be able to maintain the financial risk profile in near term. Healthy Order Book Kram Infracon Private Limited has a healthy unexecuted order book position to the tune of Rs. 1266.49 Crore approximately as on 30th September 2024 which has increased from ~Rs. 600 Cr. as on 31st Dec 2023. The OB/OI of the Company stood at 2.94 times. This shows company has bagged fresh orders in last 9 months. Going forward, the ability of the company to bag new orders and timely execution of the existing orders will remain a key rating monitor able.

Weaknesses

­Working Capital operations The working capital operations of the company is intensive marked by GCA days which stood similar at 181 days as on 31st March 2024 against 188 days as on 31st March 2023. There is a slight improvement in the GCA days due to the debtors days of the company which stood at 69 days in FY24 against 107 days in FY23. However inventory days of the company stood at 34 days in FY24 against 12 days in FY23. Highly competitive industry marked by tender based nature of business The company’s performance is susceptible to the tender based nature of business, where the business depends on the ability to bid for contracts successfully. Risk become more pronounced as tendering is based on minimum amount of biding of contracts.

Rating Sensitivities

­Movement in scale of operations along with the diversification of its order book  Movement in Operating Margin Movement in Working Capital Operation.

Liquidity Position

Strong

­The liquidity profile of the company is strong. The net cash accruals of company stood at Rs. 21.24 Cr. in FY 24 against the CPLTD of Rs. 6.65 Cr. for the same period giving some legroom for growth fund. The company has cash & bank position of Rs. 56.46 Cr. and current ratio stood at 1.63 times for FY 24. The average fund based bank limit utilization is at ~20% for the 7 months’ period ending October 2024. Acuite believes that the liquidity of the Company would remain strong due to healthy cash accruals, small debt obligations, moderate current ratio, albeit working capital intensive operations over the medium term.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	430.86	339.97
PAT	Rs. Cr.	19.05	14.82
PAT Margin	(%)	4.42	4.36
Total Debt/Tangible Net Worth	Times	0.14	0.18
PBDIT/Interest	Times	5.90	5.51

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 04 Mar 2024 Letter of Credit Short Term 7.50 ACUITE A3+ (Reaffirmed) Letter of Credit Short Term 10.00 ACUITE A3+ (Reaffirmed) Proposed Short Term Bank Facility Short Term 50.50 ACUITE A3+ (Assigned) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Bank Guarantee (BLR) Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Bank Guarantee (BLR) Long Term 12.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Assigned) Bank Guarantee (BLR) Long Term 10.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 4.50 ACUITE BBB | Stable (Reaffirmed) Bank Guarantee (BLR) Long Term 10.00 ACUITE BBB | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 5.50 ACUITE BBB | Stable (Assigned) 28 Sep 2023 Letter of Credit Short Term 7.50 ACUITE A3+ (Reaffirmed) Letter of Credit Short Term 10.00 ACUITE A3+ (Assigned) Bank Guarantee (BLR) Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Bank Guarantee (BLR) Long Term 10.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 4.50 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Assigned) Bank Guarantee (BLR) Long Term 10.00 ACUITE BBB | Stable (Assigned) 07 Nov 2022 Letter of Credit Short Term 7.50 ACUITE A3+ (Assigned) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Assigned) Bank Guarantee (BLR) Long Term 10.00 ACUITE BBB | Stable (Assigned) Bank Guarantee (BLR) Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 5.00 ACUITE BBB | Stable (Assigned) 21 Sep 2021 Proposed Bank Guarantee Long Term 20.00 ACUITE BBB | Stable (Assigned)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating State Bank of India Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 32.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) UCO Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 14.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) Punjab and Sind Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE A2 | Upgraded ( from ACUITE A3+ ) Canara Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 19.00 Simple ACUITE A2 | Upgraded ( from ACUITE A3+ ) Canara Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) Punjab and Sind Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) UCO Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 6.00 Simple ACUITE BBB+ | Stable | Upgraded ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.50 Simple ACUITE A2 | Upgraded ( from ACUITE A3+ ) Canara Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.50 Simple ACUITE A2 | Upgraded ( from ACUITE A3+ )

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Contacts

Mohit Jain Senior Vice President - Rating Operations Siddharth Garg 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.