Press Release July 06, 2026 R K MADHANI AND COMPANY 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	51.00	ACUITE BBB | Stable | Assigned	-	RBI
Bank Loan Ratings	0.00	124.00	-	ACUITE A3+ | Assigned	RBI
Total Outstanding	0.00	175.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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 'ACUITE BBB' (read as ACUITE Triple B) on the Rs. 51.00 Cr. bank facilities and short-term rating of ‘ACUITÉ A3+’ (read as ACUITE A three plus) on the Rs. 124.00 Cr. bank facilities of R K Madhani and Company (RKMAC). The outlook is 'Stable'. Rationale for Rating The rating assigned reflects the extensive experience of the partners and management team in the construction industry, along with the firm’s established operational track record. The rating further factors in the firm’s stable operating performance along with moderate order book position. The rating also draws comfort from the firm’s moderate financial risk profile and adequate liquidity position. However, the rating is constrained by its intensive working capital operations, inherent risk of capital withdrawal associated with partnership constitution and susceptibility of profitability to volatility in input prices, labour charges in a highly competitive and tender -driven nature of business.

About the Company

R K Madhani and Company is a Mumbai-based partnership firm founded in 1969. The firm operates within the civil engineering and construction sectors and provides specialized services that include civil infrastructure construction (such as roads, bridges, and water supply networks). The key partners driving the firm's operations and management include Mr. Narendra R Madhani, Ms. Saroj V Madhani, Ms. Shreya Madhani, Mr. Vishal Madhani, Ms. Ria Madhani, and Ms. Adit Madhani.

Unsupported Rating

­­­Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of R K Madhani and Company (RKMAC) to arrive at this rating.

Key Rating Drivers

Strengths

Experienced management and long operational track record RKMAC is a partnership firm which was founded in 1969 and has been active in the civil construction industry for over five decades. The firm is managed by the Madhani family, which has over five decades of experience in the civil construction industry and is supported by an experienced management team. RKMAC is engaged in execution of civil infrastructure projects comprising roads, bridges, water supply pipelines, storm water drainage systems and other urban infrastructure works for various government and semi-government authorities. Over the year, the firm has executed projects for various government entities and agencies. The partners’ extensive industry experience and the firm’s long operational history have contributed to strong relationships with key suppliers and established customers. Acuité believes that the long track record of operations and rich experience of the partners will continue to aid the business risk profile of the company. Improving revenues and profitability, supported by moderate order book position In FY26(Prov.), the firm reported revenue of Rs. 322.53 Cr., compared with Rs. 315.92 Cr. in FY25, reflecting stable growth in revenues. The increase was primarily supported by execution of projects from the existing order book across road, bridge, water supply and other civil infrastructure segments. The firm reported EBITDA of Rs. 23.07 Cr. in FY26(Prov.) (FY25: Rs.20.79 Cr.). EBITDA margins stood at 7.15 per cent in FY26(Prov.) (FY25: 6.58 per cent).The improvement in profitability during FY26(Prov.) was supported by better execution efficiencies, improved project mix including contribution from relatively higher-margin projects and benefits derived from backward integration through captive RMC and asphalt facilities in group companies. Consequently, PAT improved to Rs. 15.48 Cr. in FY26(Prov.) (FY25: Rs.13.79 Cr.), aided by the improvement in operating profitability. As on June 2026, the firm has an unexecuted order book of ~Rs. 1225.6 Cr., providing revenue visibility over the near to medium term. The order book is diversified across water supply schemes, roads, bridges, metro and railway infrastructure projects and comprises both standalone as well as joint venture projects. The management has projected revenues of around Rs. 340- 350 Cr. in FY27, supported by execution of the existing order book and expected addition of new orders. Acuité believes the firm’s operating performance will remain stable over the medium term, backed by its moderate order book position. Moderate financial risk profile RKMAC’s financial risk profile is moderate, marked by moderate net worth, low gearing and comfortable debt protection metrics. The net worth of the firm stood at Rs. 103.49 Cr. as on March 31,2026(Prov.) (FY25: Rs. 95.90 Cr.), primarily driven by retention of profits. The gearing (debt-to-equity) remained low at 0.55 times as on March 31, 2026(Prov.) (FY25: 1.02 times). Debt protection indicators are comfortable, with the interest coverage ratio (ICR) at 6.28 times in FY26(Prov.) (FY25: 4.12 times) and the debt service coverage ratio (DSCR) stood at 3.87 times in FY26(Prov.) (FY25: 2.85 times). Further, the TOL/TNW ratio stood high at 3.63 times in FY26(Prov.) (FY25: 4.11 times). Acuité believes that the firm’s financial risk profile is expected to remain moderate over the near to medium term supported by steady accrual generation and comfortable debt protection metrics.

Weaknesses

Intensive working capital operations The firm’s working capital operations remain intensive, marked by Gross Current Asset (GCA) of 220 days in FY26(Prov.) (FY25: 246 days). The elevated GCA days are primarily attributable to sizeable loans and advances and other current assets comprising statutory deposits, EMD. The debtor collection period improved and stood at 76 days in FY26(Prov.) (FY25: 108 days). Inventory holding stood at 41 days in FY26 (Prov.) (FY25: 23 days) owing to stocking of construction materials for ongoing project execution. Further, creditor days stood at 39 days in FY26 (Prov.) (FY25: 48 days). The average utilisation of consolidated fund-based limits remained moderate at around 54.78 per cent over the 6 months ended April 2026. Acuité believes the firm’s working capital requirements are likely to remain intensive over the medium term, given the nature of the business. Risk of capital withdrawal inherent in partnership constitution Being a partnership firm, RKMAC remains exposed to the inherent risk of withdrawal of capital by the partners, which may impact the firm’s net worth, capital structure and financial flexibility. Further, the partnership nature of constitution limits the firm’s ability to raise equity capital as compared to corporates. However, the risk is partially mitigated by the firm’s established track record of operations and the partner’s long-standing association and involvement in the business. Susceptibility of operating margin to volatility in input prices, labour charges in a highly competitive tender based nature of business The basic input materials for execution of construction projects and works contracts are steel, cement, aggregates, bitumen and other construction materials, the prices of which are highly volatile. Further, the firm’s profitability remains exposed to fluctuations in labour cost given the labour-intensive nature of the infrastructure contracting business. Although a majority of government contrats incorporate price escalation clauses, these mechanisms generally operate with a time lag and may not fully offset the impact of sudden increases in input costs. Further, being largely dependent on tender-based project awards, the firm’s revenue growth remains contingent upon its ability to secure new orders on a timely basis. RKMAC primarily undertakes execution of roads, bridges, water supply pipelines and other urban infrastructure projects for government and semi-government authorities. The firm faces competition from established regional and national players as well as local contractors in the bidding process, which may exert pressure on profitability. Additionally, the firm’s operations remain geographically concentrated in Maharashtra, exposing it to region-specific economic and policy developments. However, the risk is partially mitigated by the firm’s long-standing presence in the state, established relationships with the key government departments and its diversified order book across multiple infrastructure segments and executing authorities.

Rating Sensitivities

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

Significant improvement in scale of operations while maintaining profitability Improvement in working capital management with GCA below 180 days consistently Improvement in financial risk profile with TOL/TNW below 2 times on a sustained basis

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

Significant deterioration in revenue and profitability Successful execution of existing order book position while securing new sizeable work orders Elongation in working capital cycle, with GCA above 250 days, 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. 17.95 Cr. in FY2026(Prov.) against its maturing debt obligations of Rs.1.14 Cr., during the year. Further the company is expected to generate cash accruals in the range of Rs. 19.44 – 21.37 Cr., against repayment obligations of Rs. 1.20 Cr. over the medium term. Reliance on fund-based working capital limits is moderate, with an average utilisation of 54.78% over the 6 months ending April 2026. The cash and bank balance stood at Rs. 5.38 Cr. and the current ratio was 1.07 times as of March 31, 2026(Prov.). Liquidity is expected to remain adequate, supported by steady accrual generation in the near term.

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.	322.53	315.92
PAT	Rs. Cr.	15.48	13.79
PAT Margin	(%)	4.80	4.36
Total Debt/Tangible Net Worth	Times	0.55	1.02
PBDIT/Interest	Times	6.28	4.12

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

Other credit rating agency, vide its press release dated August 06th, 2025 had denoted the rating of R K Madhani and Company as BB-/ Negative/ A4.  'Downgraded,Reaffirmed and Issuer not co-operating’.

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 Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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