­Experienced management and established presence in infrastructure construction
RIPL is in the business of infrastructural construction since a decade. The company was established in 2011 by Mr. Ranjeet Kakade, who is a civil engineer and has ~10 years of experience in the construction segment. The promoter’s long experience has enabled RIPL to successfully win the tenders and complete the projects. RIPL has done various infrastructure projects of the state government and Municipal Corporations besides industrial constructions. Further, the company is also looking to expand its rental business, where in constructed industrial sheds are given to other companies on a rental basis. Also, the company deals in tender based contracts which includes Government entities where the bid winning ratio is ~70% and execute projects for some private contracts and some In-house construction.
Acuite believes that RIPL’s established presence supported by strong experience of the management may continue to support the company’s growth in near to medium term.

Improvement in revenue and profitability in 11MFY25
The revenue of the company showed a significant improvement in 11MFY25 and stood at Rs.285.43 crore against Rs.196.25 crore in FY24 and Rs.238.97 crore in FY23. The improvement in the revenue is primarily due to better execution of orders in hand. The operating profitability of the company declined in FY2024 and stood at 9.95 per cent as against 11.60 per cent in FY23, the decline is attributed to high fixed cost and admin expenses. However, the profitability is going to improve in FY25 and is estimated to be in the range of 15-20 per cent and PAT margin is expected to be in the range of 10-12 per cent. Additionally, the company has an unexecuted order book position of Rs.152.36 crore as on 28-02-2025 which gives revenue visibility in near to medium term.

Moderate financial risk profile
The financial risk profile of the company is moderate marked by comfortable net worth, gearing and debt protection metrics. The tangible net worth of the company stood at Rs.109.25 crore as on March 31, 2024 as against Rs.96.82 crore as on March 31, 2023. The total debt of the company stood at Rs.108.78 crore as on March 31, 2024, as against Rs.97.32 crore as on March 31 2023. The gearing stood moderate at 1.00 times as on March 31, 2024, as against 1.01 times as on March 31 2023. The debt protection metrics declined however stood comfortable as DSCR stood at 1.58 times in FY2024 as against 1.81 times in FY2023, while ICR stood at 3.25 times in FY2024 against 4.08 times in FY2023. The NCA/TD also stood at 0.16 times in FY2024 against 0.22 times in FY2023.

Acuité believes that the financial risk profile of RIPL is expected to remain moderate over the medium term due to its moderate debt levels vis-à-vis moderate tangible net worth and moderate debt protection metrics.

­Geographical concentration and tender-based business
RIPL’s entire business is from Maharashtra and Pune. Thus, any negative development in this state/district would have a sharp negative implication on RIPL’s overall operating performance and so on financial risk profile and liquidity. Further to reduce the geographical concentration, the company has started looking at expanding in other states. Further, majority of construction business of RIPL is based on tenders floated by MIDC, PCMC, MLDL, etc. Thus, the company’s revenue is subject to the successful bidding of tenders amidst high competitive intensity, which also impacts the pricing power of players.

­Intensive Working Capital Operations
The working capital management of the company is intensive marked by high GCA days of 339 days in FY2024 as against 258 days in FY2023. The debtor days improved marginally and stood at 131 days in FY2024 as against 140 days in FY2023. The improvement in debtor days is primarily due to improved billing in FY2024. The creditor days stood high at 150 days in FY2024 as against 97 days in FY2023. The inventory days stood significantly high at 58 days in FY2024 as against 07 days in FY2023 due to high stocking at the year end due to fluctuations in raw materials. The bank limits utilisation for 4 month ended February 2025 stood at 21% and non-fund based for 11 month ended February 2025 stood at 92.47 per cent.
Acuite believes that RIPL’s GCA days will remain intensive in the medium term, thus maintaining intensive working capital operations considering the nature of the business.