| Established track record of operations and experienced management
MAC is an EPC contractor working majorly on government tenders for construction works. The entity was incorporated in 1964 and over the years the entity has gained extensive experience in the construction business. Founded by Mr. Mahendraprasad Mehra, the firm is currently operated by his sons, Mr. Shailendra Mehra and Mr. Dhirendra Mehra who have long standing experience in the construction sector for almost three decades and have established healthy relationships with their stakeholders. The firm initially undertook civil construction contracts for the PWD in the Jalna and Aurangabad regions. In 2009, it diversified into irrigation projects, and since 2018, it has entered into several joint ventures with reputed EPC players (like V P Sethi Constructions Pvt Ltd, Courage Infra Pvt Ltd, Altis group, Wonder Construction, etc.) in the region, enabling it to participate in higher-category project bids.
Growing scale of operations supported by moderate outstanding order book
The operating revenue of the firm moderated from Rs. 123.39 Cr. in FY24 to Rs. 101.90 Cr. in FY25, which is majorly driven by the project milestone stages. However, the operating margin of the firm stood improved at 13.17 percent in FY25 (11.67 percent in FY24), on account of improving cost efficiency. Further, the firm has clocked gross revenue of Rs. 90.44 Cr. in 9MFY26 (Rs. 55.97 Cr. in 9MFY25) on account of timely execution of the orders and targets to record revenue of ~Rs. 140 Cr. in FY26. Additionally, the firm has an outstanding order book of ~Rs. 288.19 Cr. (2.80 times of FY25 revenue) (including Rs. 24 Cr. of L1 tenders in process as of Dec 2025), providing sound revenue visibility in the near to medium term.
Going ahead, timely execution of existing orders and strong growth in order book remains a key rating monitorable.
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| Moderate financial risk profile
While the net worth of the firm continues to grow with Rs 42.65 Cr. as on March 31, 2025 (Rs. 33.36 Cr. as on March 31, 2024) on account of accretion of profits to reserves and infusion of funds by the partners, however, the elevated debt levels (consisting of long-term debt of Rs. 25.84 Cr. (majorly equipment loans), working capital borrowings of Rs. 12.42 Cr. and unsecured loans infused by promoters and related parties of Rs. 12.42 Cr.), keeps the gearing (debt-equity) moderate at 1.30 times in FY25 (1.20 times in FY24). Further, the coverage indicators stood moderate with debt service coverage ratio of 1.98 times and interest coverage ratio of 2.08 times for FY25. Moreover, debt-EBITDA stood elevated at 3.53 times as on March 31, 2025 (2.41 times as on March 31, 2024).
Going forward, the financial risk profile is expected to remain in similar levels on account of steady cash accruals and no major debt-funded capex plans.
Intensive working capital operations
The working capital operations of the firm stood intensive marked by gross current assets (GCA) of 206 days in FY25 (148 days in FY24), majorly driven by inventory and higher other current assets. The firm has extended significant advances (~38 percent of its net worth of FY25) to related parties and others, recovery of which is monitorable. Further, the inventory days stood increased to 83 days in FY25 from 51 days in FY24 on account of higher work in process. Moreover, the debtor’s collection period stood efficient at 28 days in FY25 (22 days in FY24) and the creditor days stood at 54 days in FY25 (98 days in FY24).
Exposure to intense competition, tender-based operations and geographical concentration risks
The infrastructure is a fragmented industry with a presence of large players pan India where subcontracting & project specific partnerships for technical/financial reasons are common. The revenue and profitability for tendering based operations depends entirely on the ability to win tenders wherein entities face intense competition, thus requiring them to bid aggressively to procure contracts and restrict the operating margin to a moderate level. Moreover, susceptibility of raw material pricing again keeps profitability margins vulnerable and shall remain key rating sensitivity. Further, the firm has a limited presence that to only in the state of Maharashtra which makes it susceptible to concentration risks, however, the management anticipates expanding into other geographies like Madhya Pradesh and Chhattisgarh in the near to medium term.
Inherent risk of capital withdrawal by partners
MAC's constitution as a partnership firm is exposed to discrete risks, including the possibility of withdrawal of capital by the partners and limited flexibility to raise the funds vis-a-vis a limited company. However, in the last three years, there has been no instance of any capital withdrawal by the partners. Moreover, the partner's have infused funds in the form of unsecured loans to support the growing operations of the firm. Further, in order to mitigate this risk, the partners have also proposed to change the constitution of the firm to private limited company in the near to medium term.
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