­­Experienced partners and established track record of operations
N R Constructions (NRC) is a partnership firm incorporated in 1998 by Mr. Narayana Raju along with his brothers. The firm executes civil contracts involving irrigation works, building, roads, bridges and other civil works primarily from government clientele. The firm’s management is supported by team of professionals with an adequate experience in executing civil contract works. The experience of the partners has helped the firm in maintain long term relationship with its stake holders.

Healthy order book to improve the operating performance
NRC’s operating revenue declined to Rs.102.92 Cr. in FY2025 (Provisional) from Rs.202.45 Cr. in FY2024, primarily due to slow work execution in Uttar Pradesh (UP) on account of Kumbhmela. However, the operating profit margin improved to 9.32% in FY2025 (Provisional) from 6.61% in FY2024, driven by lower raw material costs. However, the PAT margin declined to 4.06% from 6.4%, primarily due to higher finance costs arising from increased debt levels during the year.  Moreover, as of March 2025, NRC holds an outstanding order book of Rs. 761.71 crore, ~7.4 times the revenue of FY2025, providing sound revenue visibility over the medium term. Further, nearly ~49% of the orders are in Uttar Pradesh (UP), ~38% in Maharashtra, ~11% in Andhra Pradesh (AP) and ~1% each in Karnataka and Telangana, which depicts moderate diversification in the portfolio.

­Moderate financial risk profile
NRC’s financial risk profile continue to remain moderate marked by low net worth, moderate debt protection metrics and low gearing. The net worth marginally improved but stood low at Rs.33.59 Cr. as on March 31, 2025 (Prov.) (Rs.29.52 Cr. as on March 31, 2024). The debt majorly includes working capital borrowings which increased significantly in FY2025, thereby, increasing the gearing to 0.52 times as on 31 March 2025(Prov.) as against 0.32 times as on 31 March 2024. Further, the firm’s TOL/TNW and interest coverage ratio continues to remain moderate at 2.62 & 3.70 times respectively in FY2025 (Prov.).

Working capital intensive nature of operations
NRC’s working capital operations are intensive in nature marked by elevated gross current asset (GCA) days of 388 days in FY2025(Prov.) against 161 days in FY2024. The increase in the GCA days is primarily on account of increase in the inventory cycle. The inventory days stood at 156 days in FY2025(Prov.) against 54 days in FY2024 primarily including unbilled revenue as receipts are milestone based. Therefore, the bank limit utilization stood high at ~97.57% for fund based limits in the last 06 months ending August 2025.

Risk of capital withdrawal
As a partnership firm, NRC faces the risk of capital withdrawal by partners, thereby affecting its capital structure. Additionally, its constitution limits fundraising flexibility compared to a corporate entity.

Volatility in raw material prices and tender based nature of operations impacting profitability
NRC’s profitability is exposed to raw material price volatility and competitive tender-based bidding, which creates pressure on margins. However, inflation-linked escalation clauses in most contracts helps mitigate input cost risks to some extent.