Press Release October 23, 2024 RDS PROJECT LIMITED Rating Assigned and Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	137.63	ACUITE C | Downgraded	-
Bank Loan Ratings	3.37	ACUITE D | Downgraded	-
Bank Loan Ratings	115.00	-	ACUITE A4 | Assigned
Bank Loan Ratings	444.00	-	ACUITE A4 | Downgraded
Total Outstanding	700.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has ­downgraded the long-term rating at “ACUITE D“ (read as ACUITE D) from “ACUITE BBB+“ (read as ACUITE triple B plus) on the Rs.3.37 Cr. bank facilities of RDS Project Limited (RDSPL).  Further, Acuite has ­downgraded the long-term rating at “ACUITE C“ (read as ACUITE C) from “ACUITE BBB+“ (read as ACUITE triple B plus) and short term rating at “ACUITE A4” (read as ACUITE A four) from “ACUITE A2” (read as ACUITE A two) on the Rs.581.63 Cr. bank facilities of RDS Project Limited. Further, Acuite has assigned short term rating at “ACUITE A4” (read as ACUITE A four) on the Rs.115.00 Cr. bank facilities of RDS Project Limited. Rationale for Downgrade As per the lender’s feedback, the account conduct is not satisfactory and there have been delay in interest payments for term loans (equipment loans) in the past few months. In addition, as per the reporting in CRIF High mark Report, delinquencies are captured in multiple accounts of the company. There are delays in debt obligation servicing in the months of July 2024, August 2024, September 2024 and October 2024.

About the Company

New Delhi-based, RDS Project Limited was incorporated in 1992 by Mr. Madan Lal Goyal. The Company is engaged in civil construction works and undertakes all types of civil engineering works and has substantial equipment in the shape of plant & machinery, shuttering, trucks and dumpers etc. for different construction activities. Contracts are awarded to the company through Bidding Process. Besides main activity of construction of Road, Bridges & Buildings, it undertakes construction of Dams, Marine works like Break Waters, Jetties, Piling, Housing Complexes as well as in Real Estate Business. The company has also undertaken work for construction of groynes and sea wall for sea protection works along Ennore Expressway in Chennai, which is an environment protection work. Mr. Shashank Goyal, Mr. Sumit Goyal, Ms. Sharda Goyal, Mr. Rahul Garg, Mr. Mayank Goyal, Mr. Amit Varghese Joseph, Ms. Aanchal Kain are the directors of the company.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuite has considered the standalone business and financial risk profile of RDS Project Limited.

Key Rating Drivers

Strengths

­Established track record of operation and experienced management RDSPL is a Delhi based public limited company which is engaged in infrastructure development for almost three decades with its major operations spread in Chennai, Kochi, Trivandrum, Port Blair and Mizoram. The management is supported by a well-qualified and experienced team of professionals. The extensive experience of the promoters in the industry has helped the company build its market presence. The company caters to reputed clientele, which includes National Highways Authority of India, Kerala Public Work Department, Other States Public Work Departments, Andaman & Nicobar Administration to name a few. Acuité believes the company will benefit from its experienced management and healthy relations with suppliers. Healthy Financial Risk Profile The company has healthy financial risk profile marked by healthy net worth, low gearing and comfortable debt protection metrics. The net-worth of the company stood at Rs.266.20 Crore as on 31st March 2024 (Prov.) as against Rs.241.75 Crore as on 31st March 2023. The increase in the net-worth is on an account of accretion of profits into reserves. Further, the total debt of the company stood at Rs.169.75 Crore as on 31st March 2024 (Prov.) against Rs.102.61 Crore as on 31st March 2023. The capital structure of the company is comfortable marked by gearing ratio of the company which stood at 0.64 times as on 31st March 2024 (Prov.) against 0.42 times as on 31st March 2023. Further, the coverage indicators of the company are reflected by interest coverage ratio and debt service coverage ratio which stood at 2.39 times and 1.39 times respectively as on 31st March 2024 (Prov.) against 2.77 times and 1.31 times respectively as on 31st March 2023. The TOL/TNW ratio of the company stood at 1.19 times as on 31st March 2024 (Prov.) against 1.13 times as on 31st March 2023 and DEBT-EBITDA of the company stood at 2.19 times as on 31st March 2024 (Prov.) against 1.44 times as on 31st March 2023.  Acuité believes that going forward the financial risk profile of the company will remain healthy with no major debt funded capex plans.

Weaknesses

Competitive and fragmented industry with tender based operations RDSPL is engaged as an EPC contractor. The company faces intense competition from the presence of several mid to large sized players in the said industry. The risk becomes more pronounced as tendering is based on minimum amount of bidding on contracts and susceptibility to inherent cyclicality in the road sector. However, in face of such competitive pressures, Acuité believes that RDSPL is well positioned on account of strong orderbook, its longstanding relationship with the government authorities in the infrastructure industry and the long track-record and experience of its promoters spanning nearing three decades. ­Intensive working capital operations The working capital operations of the company are intensive marked by GCA days which stood at 211 days as on 31st March 2024 (Prov.) as against 188 days as on 31st March 2023. The debtor days of the company stood moderate at 13 days as on 31st March 2024 (Prov.) as against 14 days as on 31st March 2023. Further, the inventory holding stood constant at 126 days as on 31st March 2024 (Prov.) and 31st March 2023. In addition, the average fund based bank limit utilization of the company stood at 86.61% approximately in last twelve months ended August 2024 and average non-fund based bank limit utilization stood at 82.71% in last twelve months ended August 2024. Further, in few months overutilization in working capital limits has been captured resulting into higher utilization of the facilities. The EPC business retains a naturally elevated working capital intensity, attributed to prolonged project execution timelines, payments tied to project milestones, and the release of retention money. Acuité believes that the working capital operations of the company will remain at similar levels over the medium term.

Rating Sensitivities

Timely repayment of term loan obligations. Timely execution of projects in hand. Further elongation in working capital cycle.

Liquidity Position

Stretched

The liquidity profile of the company is stretched as there are delinquencies captured in multiple accounts of the company with delays in debt obligation servicing in the multiple months as per the reporting in CRIF High mark Report. In addition, there have been delays in interest payments for term loans (equipment loans) in the past few months as per the lender’s feedback.

Outlook: Not Applicable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Provisional)	FY 23 (Actual)
Operating Income	Rs. Cr.	651.37	664.42
PAT	Rs. Cr.	24.45	25.46
PAT Margin	(%)	3.75	3.83
Total Debt/Tangible Net Worth	Times	0.64	0.42
PBDIT/Interest	Times	2.39	2.77

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 • Service Sector: https://www.acuite.in/view-rating-criteria-50.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 Aug 2023 Bills Discounting Short Term 5.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 50.00 ACUITE A2 (Reaffirmed) Letter of Credit Short Term 24.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 301.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 33.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 26.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 19.00 ACUITE A2 (Reaffirmed) Cash Credit Long Term 35.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 33.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 1.50 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 6.50 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 12.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 5.98 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 3.86 ACUITE BBB+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 22.39 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 2.00 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 0.77 ACUITE BBB+ | Stable (Reaffirmed) 31 May 2022 Cash Credit Long Term 35.00 ACUITE BBB+ | Negative (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB+ | Negative (Reaffirmed) Cash Credit Long Term 33.00 ACUITE BBB+ | Negative (Reaffirmed) Cash Credit Long Term 1.50 ACUITE BBB+ | Negative (Reaffirmed) Cash Credit Long Term 6.50 ACUITE BBB+ | Negative (Reaffirmed) Cash Credit Long Term 12.00 ACUITE BBB+ | Negative (Reaffirmed) Term Loan Long Term 5.98 ACUITE BBB+ | Negative (Reaffirmed) Term Loan Long Term 2.01 ACUITE BBB+ | Negative (Reaffirmed) Term Loan Long Term 3.86 ACUITE BBB+ | Negative (Reaffirmed) Proposed Long Term Bank Facility Long Term 20.38 ACUITE BBB+ | Negative (Reaffirmed) Term Loan Long Term 2.00 ACUITE BBB+ | Negative (Reaffirmed) Term Loan Long Term 0.77 ACUITE BBB+ | Negative (Reaffirmed) Bills Discounting Short Term 5.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 50.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 19.00 ACUITE A2 (Reaffirmed) Letter of Credit Short Term 24.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 301.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 33.00 ACUITE A2 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 26.00 ACUITE A2 (Reaffirmed) 01 Mar 2021 Cash Credit Long Term 35.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 33.00 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 1.50 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 6.50 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 12.00 ACUITE BBB+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 20.38 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 5.98 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 2.01 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 3.86 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 0.77 ACUITE BBB+ | Stable (Reaffirmed) Term Loan Long Term 2.00 ACUITE BBB+ | Stable (Reaffirmed) Bank Guarantee (BLR) Short Term 50.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 19.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 301.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 33.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 26.00 ACUITE A2 (Reaffirmed) Bills Discounting Short Term 5.00 ACUITE A2 (Reaffirmed) Letter of Credit Short Term 24.00 ACUITE A2 (Reaffirmed) Term Loan Long Term 1.00 ACUITE BBB+ (Reaffirmed & Withdrawn) Term Loan Long Term 0.16 ACUITE BBB+ (Reaffirmed & Withdrawn) Term Loan Long Term 2.00 ACUITE BBB+ (Reaffirmed & Withdrawn)

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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. 5.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) Bank of India Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 50.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) Bank of Baroda Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 301.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) Federal Bank Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 33.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) Punjab National Bank Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 26.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) HDFC Bank Ltd Not avl. / Not appl. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.00 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Bank of Baroda Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 33.00 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Federal Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.50 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 6.50 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Bank of Baroda Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 24.00 Simple ACUITE A4 | Downgraded ( from ACUITE A2 ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 52.85 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Not Applicable Not avl. / Not appl. Proposed Short Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 115.00 Simple ACUITE A4 | Assigned HDFC Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 07 Apr 2026 2.00 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) Sundaram Finance Ltd. Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 10 Jan 2025 0.48 Simple ACUITE C | Downgraded ( from ACUITE BBB+ ) ICICI Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 07 Feb 2026 3.37 Simple ACUITE D | Downgraded ( from ACUITE BBB+ ) Axis Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 20 Apr 2026 2.30 Simple ACUITE C | Downgraded ( from ACUITE BBB+ )

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Contacts

Mohit Jain Senior Vice President - Rating Operations Archita Sharma 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.