Acuite Ratings and Research logo
 
 
 
 
 
Product Quantum (Rs. Cr) (SEBI) Quantum (Rs. Cr) (Other FSR) Long Term Rating Short Term Rating Regulated By
Bank Loan Ratings 0.00 120.00 ACUITE BBB | Stable | Reaffirmed - RBI
Total Outstanding 0.00 120.00 - - -
Total Withdrawn 0.00 0.00 - - -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) on Rs.120.00 Cr. bank facilities of Magpie Hydel Construction Operation Industries Private Limited (MHCOIPL). The outlook is ‘Stable’.


Rationale for rating
The rating reaffirmation reflects MHCOIPL's established track record in the hydropower generation business and the extensive industry experience of its promoters in the power sector. The rating also factors in the company's healthy operational performance, as reflected in satisfactory plant load factors across its three operational hydropower plants, notwithstanding the moderation witnessed in FY26. The rating derives comfort from the company's moderate financial risk profile, marked by a healthy net worth, low gearing levels, and comfortable debt protection metrics. Further, the company's adequate liquidity position, supported by healthy cash accrual generation, efficient working capital management, and the availability of liquid resources in the form of cash balances and unencumbered fixed deposits, provides additional support to the credit profile. However, the rating strength is partially offset by the moderation in revenue from the core power generation business, which declined to Rs. 62.11 Cr. in FY26 from Rs. 67.27 Cr. in FY25, owing to lower average power realizations despite stable generation levels. Consequently, the company's operating profitability moderated, with EBITDA margin declining to 66.50% in FY26 from 77.33% in FY25, as the lower revenue base resulted in a higher proportion of fixed costs. The rating is further constrained by the inherent hydrological risks associated with hydroelectric power generation, exposure to fluctuations in merchant power prices due to the absence of long-term PPAs, uncertainty regarding power offtake, and project execution risks associated with the company's ongoing hospitality projects in Srinagar and Tangmarg.

About the Company
­Incorporated in 2003, Magpie Hydel Construction Operation Industries Private Limited (MHCOIPL) is engaged in generation of hydroelectric power. The company is an independent power producer in the union territory of Jammu and Kashmir. The company has three hydro power plants in Kashmir with of with total generation capacity of 35 MW. Sale of power is made through bilateral agreements or through exchange. MHCOIPL is promoted by Mr. Nazir Mir, Mr. Mudasir Mir and Mrs. Masooda Mir who have over two decades of experience in constructing and operating hydel power projects.
 
Unsupported Rating
­Not Applicable
 
Analytical Approach
­Acuitè has taken a standalone approach to arrive at the rating of MHCOIPL.
 
Key Rating Drivers

Strengths
­Established track record of operations and experienced management
Incorporated in 2003, MHCOIPL is a part of M & Co Group which is engaged in various segments like construction of hydel power plant and generation of power. The company is promoted by Mr. Nazir Mir, Mr. Mudasir Mir and Mrs. Masooda Mir who have over two decades of experience in constructing and operating hydel power projects. The company sells the power generated to open market customers through exchanges or through bilateral agreements. Acuité believes that the experienced management and its relationships with customers are expected to support the regular addition of new clientele under its bilateral tie-ups and a healthy off-take of generated power.

Stable Scale of Operations Despite Moderation in Profitability
MHCOIPL benefits from an established operational track record in the hydropower generation segment, with an aggregate installed capacity of 35 MW across its three operational power plants located at Poonch, Bandipora, and Tangmarg. Although the Plant Load Factor (PLF) of all three plants witnessed a marginal moderation in FY26, the operating performance remained satisfactory. The Poonch plant recorded an average PLF of 54.15% in FY26 as against 55.22% in FY25, while the Bandipora plant reported a PLF of 37.50% compared to 39.86% in the previous year. The Tangmarg plant recorded a PLF of 20.58% in FY26 against 22.67% in FY25. The company reported a marginal improvement in its scale of operations, with revenue increasing by 2.68% to Rs. 71.47 Cr. in FY26 from Rs. 69.60 Cr. in FY25. The growth was primarily driven by a higher contribution from options and commodity trading activities. However, revenue from the company's core power generation business moderated to Rs. 62.11 Cr. in FY26 from Rs. 67.27 Cr. in FY25, owing to lower power realizations. The average realization per unit declined during the year, with realizations ranging between Rs. 6.34 and Rs. 6.40 per unit across the company's power plants. Profitability moderated in FY26, with the EBITDA margin declining to 66.50% from 77.33% in FY25, while the PAT margin moderated to 32.31% from 37.18% during the same period. The decline in profitability was primarily attributable to lower realizations from power sales, which resulted in a higher proportion of fixed costs relative to revenue. Acuite believes that the company's established operational track record, satisfactory plant operating performance, and healthy cash accrual generation will continue to support its business risk profile over the medium term. However, the company's ability to improve power realizations and maintain profitability levels will remain a key monitorable.

Moderate financial risk profile
MHCOIPL's financial risk profile remains moderate, supported by a healthy net worth, comfortable capital structure and debt protection metrics. The company's tangible net worth improved to Rs. 131.04 Cr. as on March 31, 2026, from Rs. 109.52 Cr. as on March 31, 2025, primarily due to the accretion of profits to reserves. The capital structure continues to remain comfortable, with the gearing ratio improving to 0.77 times as on March 31, 2026, from 0.97 times as on March 31, 2025, supported by growth in net worth and gradual reduction in debt levels. The company's debt protection metrics, though moderated during FY26, remained adequate, with the Interest Coverage Ratio (ICR) at 4.99 times and the Debt Service Coverage Ratio (DSCR) at 1.23 times. The moderation in coverage indicators was primarily on account of lower operating profitability and cash accruals arising from reduced power realizations during the year. Nevertheless, the overall financial risk profile continues to be supported by healthy capitalization levels, moderate leverage, and adequate debt servicing capability. The company is also undertaking a sizeable capex towards the development of two hotel projects, each in Srinagar and Tangmarg, which is proposed to be funded through a mix of term debt, promoter contribution, and internal accruals. While the projects are expected to diversify the company's revenue profile over the long term, the financial risk profile remains exposed to project implementation risks and the company's ability to maintain comfortable leverage and debt protection metrics during the execution phase. Acuite believes that MHCOIPL's healthy net worth, comfortable capital structure, and adequate cash accrual generation will continue to support its financial risk profile over the medium term. However, the company's ability to execute the ongoing hospitality projects within the envisaged cost and timeline parameters, while maintaining its existing financial risk profile, will remain a key monitorable.

Weaknesses
Susceptibility to fluctuation in power prices and uncertainty of offtake
The company sells power to open market customers where the power prices are market determined. The operating income and profitability of the company is susceptible to the volatility in the power prices in open market. Further, the company also sells power through bilateral agreements which are short term in nature, usually for 1-3 months. The ability of the company to acquire such bilateral agreements on a recurring basis will remain a key rating sensitivity.


Susceptibility of power generation to hydrological risks
The hydro power plants of MHCOIPL are located in the union territory of Jammu and Kashmir and are not able to generate to their full capacity on account of low hydrology during the month of September to February. The peak PLF at all the three plants combined remained during the months of March to August. The generation is highly dependent on adequate flow of water from melting of ice and rainfall. Any adverse natural calamity in the location of the power plant may adversely impact the generation levels, thereby leading to stretched liquidity and financial flexibility.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:
  • Growth in operating income by more than 20% with stable improvement in profitability.
  • Successful completion and stabilization of the hospitality projects without significant cost overruns or deterioration in the overall financial risk profile.
Potential triggers (individual or collective) for a downward rating action:
  • ­Significant decline in power generation or realizations leading to weakening of profitability and coverage indicators.
  • Any substantial debt-funded capital expenditure, other than the ongoing hotel projects, resulting in the gearing ratio exceeding 1.50 times on a sustained basis.
Liquidity Position
Adequate
The liquidity position of MHCOIPL is adequate, supported by healthy net cash accrual generation and its ability to meet debt servicing obligations in a timely manner. The company generated net cash accruals of Rs. 32.68 Cr. in FY26, which were sufficient to cover its maturing debt obligations of Rs. 24.78 Cr. during the same period. Liquidity is further supported by the company's efficient working capital management, as reflected in the low debtor collection period of 3 days in FY26, compared to 6 days in FY25, indicating timely realization of receivables. The company's current ratio stood at 1.16 times as on March 31, 2026. Further, MHCOIPL have cash and bank balances of Rs. 7.60 Cr. and unencumbered fixed deposits of Rs. 2.51 Cr. as on March 31, 2026, providing additional financial flexibility and supporting its liquidity profile. Acuite believes that the company's liquidity position is likely to remain adequate over the medium term, supported by healthy cash accruals from its hydropower operations and efficient working capital management. However, the company's ability to maintain adequate liquidity while undertaking the ongoing hospitality projects will remain a key monitorable.
 
Outlook: Stable
­
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 26 (Actual) FY 25 (Actual)
Operating Income Rs. Cr. 71.47 69.60
PAT Rs. Cr. 23.09 25.88
PAT Margin (%) 32.21 37.18
Total Debt/Tangible Net Worth Times 0.77 0.97
PBDIT/Interest Times 4.99 5.34
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
16 Jul 2025 Term Loan Long Term 56.07 ACUITE BBB | Stable (Reaffirmed)
Covid Emergency Line. Long Term 5.54 ACUITE BBB | Stable (Reaffirmed)
Term Loan Long Term 34.22 ACUITE BBB | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 24.17 ACUITE BBB | Stable (Reaffirmed)
17 Apr 2024 Term Loan Long Term 69.21 ACUITE BBB | Stable (Reaffirmed)
Term Loan Long Term 5.45 ACUITE BBB | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 32.36 ACUITE BBB | Stable (Reaffirmed)
Covid Emergency Line. Long Term 12.98 ACUITE BBB | Stable (Reaffirmed)
18 Jan 2023 Term Loan Long Term 5.24 ACUITE BBB | Stable (Assigned)
Term Loan Long Term 77.31 ACUITE BBB | Stable (Assigned)
Term Loan Long Term 14.20 ACUITE BBB | Stable (Assigned)
Proposed Long Term Bank Facility Long Term 3.86 ACUITE BBB | Stable (Assigned)
Covid Emergency Line. Long Term 19.39 ACUITE BBB | Stable (Assigned)
­

Lender’s Name ISIN Facilities Listing Status Regulated By Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 41.33 Simple ACUITE BBB | Stable | Reaffirmed
THE JAMMU AND KASHMIR BANK LIMITED Not avl. / Not appl. Term Loan Unlisted RBI 09 Oct 2024 Not avl. / Not appl. 09 Oct 2039 35.74 Simple ACUITE BBB | Stable | Reaffirmed
THE JAMMU AND KASHMIR BANK LIMITED Not avl. / Not appl. Term Loan Unlisted RBI 18 Mar 2016 Not avl. / Not appl. 30 Sep 2030 42.93 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

List of instruments and names of regulators of the instruments
© Acuité Ratings & Research Limited. All Rights Reserved.www.acuite.in
Acuite Ratings and Research logo