Press Release October 06, 2026 PRAKASH ELECTRICAL ENGINEERING CORPORATION Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	14.00	ACUITE BBB- | Stable | Assigned	-	RBI
Bank Loan Ratings	0.00	111.00	-	ACUITE A3 | Assigned	RBI
Total Outstanding	0.00	125.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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

Acuite has assigned its long-term rating of ‘ACUITÉ BBB-' (read as ACUITE triple B minus) and short-term rating of ‘ACUITÉ A3’ (read as ACUITE A three) on Rs.125.00 Cr. bank facilities of Prakash Electrical Engineering Corporation (PEEC). The outlook is ‘Stable’. Rationale for rating The rating assigned factors in the extensive experience of the promoter and management team in the construction industry, along with the firm’s established operational track record. The rating further factors in the firm’s improving revenues albeit moderation in profitability along with healthy order book position. The rating also draws comfort from the firm’s healthy financial risk profile and adequate liquidity position. However, the rating is constrained by its moderately intensive working capital operations, inherent risk of capital withdrawal associated with proprietorship constitution, concentrated order book position and geographical concentration risk and susceptibility of profitability to volatility in input prices, labour charges in a highly competitive and tender -driven nature of business.

About the Company

Ratnagiri, Maharashtra based, Prakash Electrical Engineering Corporation (PEEC) is a proprietorship concern established in the year 1998 by Mr. Prakash Dadasaheb Deshmukh. The firm is registered as a Class-A Electrical Contractor by PWD (Public Works Department) in Maharashtra. The enterprise undertakes turnkey projects, supply, installation, testing and commissioning (SITC) of high tension and low tension (HT/LT) lines, transformers, electric substations, house wiring, industrial wiring etc.

Unsupported Rating

­­­Not Applicable

Analytical Approach

Acuité has considered standalone business and financial risk profiles of PEEC to arrive at the rating.

Key Rating Drivers

Strengths

Experienced management and long operational track record PEEC has an established operational track record of over two decades, having commenced operations in 1998 under the proprietorship of Mr. Prakash Dadasaheb Deshmukh. Mr. Deshmukh, a licensed electrical contractor with over 25 years of experience in the electrical contracting segment, oversees key functions including tendering, finance and business development and remains the key decision-maker for the firm. Over the years, PEEC has established a presence in electrical infrastructure contracting, undertaking turnkey electrical works including supply, installation, testing and commissioning of HT/LT lines, EHV transmission lines, transformers and electrical substations. The firm has executed projects for state utilities, primarily Maharashtra State Electricity Transmission Co. Ltd. (MSETCL), across various zonal circles, and other state utilities. The firm's long operational track record and the proprietor’s experience in the segment have supported its established relationships with key customers and suppliers and its execution capabilities. Acuité believes that the extensive experience of the proprietor, supported by the firm's established operating track record, provides support to its business profile and project execution capabilities.   Improvement in revenues backed by healthy order book position PEEC reported operating income of Rs. 360.24 Cr. in FY26 (Prov.) (FY25: Rs. 298.21 Cr.; FY24: Rs. 119.89 Cr.), The growth in FY26(Prov.) was driven by higher execution of projects from the existing order book. EBITDA increased to Rs. 44.24 Cr. in FY26 (Prov.) (FY25: Rs. 42.52 Cr.; FY24: Rs. 22.18 Cr.); however, EBITDA margin moderated to 12.28 per cent in FY26 (Prov.)(FY25: 14.26 per cent), primarily due to higher labour and subcontracting costs. PAT increased to Rs. 23.49 Cr. in FY26 (Prov.) (FY25: Rs. 21.26 Cr.; FY24: Rs. 12.10 Cr.), although PAT margin moderated to 6.52 per cent (FY25: 7.13 per cent). The firm has maintained the growth momentum during 4M FY27, reporting revenue of Rs. 126.39 Cr. (4M FY26: Rs. 81.63 Cr.). Further, the firm had an unexecuted order book of Rs. 2,377.51 Cr. as on August, 2026, providing revenue visibility for the near to medium term. The order book is predominantly towards substation projects and is expected to be executed over the next 2-3 years. Acuité believes that the healthy order book and the firm's established execution track record would support revenue growth over the medium term.   Healthy financial risk profile The financial risk profile of the firm is healthy, marked by low gearing, moderate net worth and comfortable debt protection metrics. The net worth of the firm stood at Rs. 110.91 Cr. as on March 31, 2026 (Prov.) (Rs. 80.02 Cr. as on March 31, 2025), primarily supported by retention of profits. This includes Rs. 23.51 Cr. of unsecured loans from the proprietor, considered as quasi-equity, based on an undertaking provided by the firm. The gearing of the firm is low at 0.04 times in FY26 (Prov.) (FY25: 0.25 times). Further, debt protection metrics are comfortable, with the interest coverage ratio (ICR) at 8.16 times in FY26 (Prov.) (FY25: 9.07 times) and the debt service coverage ratio (DSCR) at 5.10 times (FY25: 5.33 times). The Debt-to-EBITDA ratio stood low at 0.10 times in FY26 (Prov.) (FY25: 0.48 times), while net cash accruals to total debt (NCA/TD) improved to 5.38 times (FY25: 1.08 times). The firm also has sizeable exposure towards loans and advances, aggregating ~Rs.50.02 Cr., including advances to individuals and proprietor- linked businesses, equivalent to ~45 per cent of net worth. Despite the exposure in the form of loans and advances, financial risk profile is expected to remain comfortable given lower debt levels. Acuité believes that the firm’s financial risk profile will remain healthy over the medium term, however, the sizeable loans and advances and its timely recovery will remain as a key monitorable.

Weaknesses

Moderately intensive working capital management The firm’s working capital operations is moderately intensive, with gross current assets (GCA)  at 222 days in FY26 (Prov.) (FY25: 210 days), primarily driven by sizeable other current assets, including deposits, retention and deduction balances and loans and advances. Inventory days increased to 17 days in FY26 (Prov.) (FY25: 7 days), while debtor days stood at 30 days (FY25: 5 days), broadly in line with the firm’s normal collection cycle of 30-45 days. Creditor days remained elevated at 160 days in FY26 (Prov.) (FY25: 130 days), indicating significant reliance on supplier credit to fund working capital requirements. The elevated creditor position, coupled with sizeable funds deployed in other current assets, limits the firm’s liquidity flexibility and remains a key monitorable. Further, while average utilisation of fund-based limits remained moderate at 42.70 per cent over the five months ended July 2026, utilisation of non-fund-based limits remained high at 98.95 per cent over the six months ended August 2026. The high utilisation of non-fund-based limits leaves limited headroom for issuance of fresh bank guarantees and letters of credit, thereby potentially restricting the firm’s ability to bid for new tenders. The firm is seeking enhancement of its non-fund-based limits from its lenders. Acuité believes that the working capital operations will remain moderately intensive over the medium term, with elevated creditor levels, sizeable funds deployed in other current assets and high utilisation of non-fund-based limits remaining key monitorable. Concentrated order book and geographical concentration risk The firm is exposed to elevated customer and geographical concentration risk, given the concentration of its order book and operations in Maharashtra. As on August 1, 2026, around Rs. 1,985 Cr. of the unexecuted order book of Rs. 2,377 Cr. was attributable to a single customer, accounting for around 83 per cent of the total order book. Any delay in project execution, cancellation or slowdown in fresh order awards from this customer could impact the firm’s revenue visibility and operating performance. Further, the firm’s operations and order book are largely concentrated in Maharashtra, exposing it to region-specific developments. Acuité believes that the firm’s ability to diversify its customer base and geographical presence, while reducing dependence on a single customer, will remain important for sustaining revenue visibility and business stability over the medium term.   Risk of capital withdrawal inherent in proprietorship constitution Being a proprietorship firm, PEEC remains exposed to the inherent risk of withdrawal of capital by the proprietor, which could adversely impact its net worth, capital structure and financial flexibility. Further, the proprietorship constitution limits the firm's ability to raise equity capital compared with corporates, thereby increasing reliance on internal accruals for strengthening its capital base. The risk is partly mitigated by the proprietor’s established involvement in the business and the firm's operating track record. Susceptibility of operating margin to volatility in input prices and labour costs amid highly competitive tender-based business The firm’s operating profitability remains susceptible to fluctuations in the prices of key electrical and construction inputs, as well as labour and subcontracting costs, given the execution-intensive nature of its electrical EPC operations. The risk is heightened by the fact that most of the projects do not incorporate price escalation clauses, while project tenors generally extend over one to two years. Accordingly, any sharp increase in input or execution costs during the project period may not be fully recoverable from customers, thereby exerting pressure on operating margins. Further, the tender-based nature of the business exposes the firm to intense competition, with project awards and revenue growth dependent on its ability to competitively bid for new orders, thereby limiting pricing flexibility. Acuité believes that the firm’s ability to manage input cost and labour cost fluctuations, particularly in projects without price escalation provisions, and sustain operating margins amid competitive tendering will remain key monitorable.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Significant improvement in scale of operations, while improving profitability Improvement in working capital management, with GCA below 175 days consistently Sustenance of healthy financial risk profile with reduction in loans and advances extended to related parties

Potential triggers (individual or collective) for a downward rating action:

Significant deterioration in revenue and profitability with EBITDA below 10 per cent Elongation in working capital cycle, exerting pressure on liquidity Deterioration in financial risk profile

Liquidity Position

Adequate

The firm’s liquidity position is adequate, supported by net cash accruals of Rs. 24.33 Cr. in FY2026(Prov.) against maturing debt obligations of Rs. 0.41 Cr., during the year. Going forward, the company is expected to generate net cash accruals of Rs.32.85 and Rs.36.11 Cr. against it its repayment obligation of ~Rs. 0.55 Cr. during FY27 and FY28 respectively.  Reliance on fund-based working capital limits is moderate, with an average utilisation of 42.70% over the 5 months ending July 2026. However, the Non-fund-based limits remained high at around 98.95% over the last 6 months ended August 2026. The high utilisation of non-fund-based limits leaves limited headroom for issuance of fresh bank guarantees and letters of credit. The cash and bank balance stood at Rs. 5.08 Cr. and current ratio was 1.40 times as of March 31, 2026(Prov.). Liquidity is expected to remain adequate over the medium term, supported by expected accrual generation and moderate repayment obligations.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	360.24	298.21
PAT	Rs. Cr.	23.49	21.26
PAT Margin	(%)	6.52	7.13
Total Debt/Tangible Net Worth	Times	0.04	0.25
PBDIT/Interest	Times	8.16	9.07

Status of non-cooperation with previous CRA (if applicable)

OCRA, vide its press release dated December 24th, 2025 had denoted the rating of Prakash Electrical Engineering Corporation as BB-/ Stable/ A4 'Downgraded, Reaffirmed  and Issuer not cooperating ’.

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 :

­­­­­­Not Applicable

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Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Amay Gupta Senior Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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