Press Release

Press Release

May 29, 2026

SECON ENGINEERING PROJECTS PRIVATE LIMITED (ERSTWHILE SECON)
Rating Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	9.40	ACUITE BB \| Stable \| Reaffirmed	-	RBI
Bank Loan Ratings	0.00	15.60	-	ACUITE A4+ \| Reaffirmed	RBI
Total Outstanding	0.00	25.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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

Acuité has reaffirmed the long-term rating of ‘ACUITE BB’ (read as ACUITE double B) and the short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.25.00 Cr. bank facilities of Secon Engineering Projects Private Limited (Erstwhile Secon) (SEPPL). The outlook is ‘Stable’.

Rationale for rating reaffirmation

The rating reaffirmation reflects SEPPL’s established track record, experienced management, and a diversified, healthy clientele base that includes the Ministry of Defense (MoD), Indian Oil Corporation, Rashtriya Ispat Nigam Limited (RINL), Adani Ports Ltd., and Telangana State Tourism Development Corporation (TGTDC) among others. Although the company’s scale of operations and profitability moderated in FY26 (provisional), it is expected to improve over the medium term, supported by an outstanding order book of Rs. 48.68 crore. The financial risk profile is assessed as moderate, backed by an average net worth base, low gearing, and moderate debt protection metrics. Liquidity remains adequate with net cash accruals sufficient against long-term debt obligations and moderate utilization of bank limits. However, working capital management continues to be intensive due to higher debtor and inventory holding periods. Acuité believes that while operational performance is likely to improve over the medium term, timely execution of orders, the ability to secure new contracts, and sustaining profitability will remain key monitorable.

About the Company

Secon Engineering Projects Private Limited (Erstwhile Secon) was incorporated in 2022 & is based in Visakhapatnam. It is engaged in Construction of Marine Floating Auxillary Platforms for Indian Navy. They are We are one of nine MSME firms shortlisted with Directorate of Ship Production (Ministry of Defence). Mr. Rohit Chowdary Tripuraneni, Mrs. Rajeswari Chowdary Tripuraneni & Mr. Mahidhar Chowdary Tripuraneni are the current directors of the company.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of Secon Engineering Projects Private Limited (SEPPL) to arrive at this rating

Key Rating Drivers

Strengths

Established track record of operations and experienced management
SEPPL was established in the year 1987 by Mr. T. Mahidhar Chowdary, Mr. T. Rajeshwari Chowdary and Mr. T. Rohit Chowdary. Mr. T. M. Chowdary has experience of more than three decades and Mr. Rohit Chowdary has experience of more than one decade in the aforementioned line of business. Active participation by directors in the business has helped the company in developing long- term relationships with its customers and suppliers. The major clientele of the SEPPL are Director General Naval Projects, Ministry of Defense, Telangana State Tourism Development Corp, Visakhapatnam Steel Plant, etc. The current installed capacity is 150 MT/month. SEPPL is one of the nine pre-approved contractor by the Ministry of Defence. The company is now more focused on defense Projects under Atmanirbhar Bharat having core projects in its forte. Acuite believes that the established track record of operations and experienced management is expected to benefit the business risk profile of the company over the medium term.

Moderate Financial Risk Profile:
The financial risk profile of SEPPL is assessed as moderate, supported by an average net worth base, low gearing, and healthy debt protection metrics. The total tangible net worth improved to Rs.9.87 crore in FY26 (provisional) from Rs.9.37 crore in FY25, driven by internal accruals. Gearing remained low at 0.24 times as of FY26 (provisional), improving from 0.48 times in FY25, primarily due to a reduction in short-term debt. Debt protection metrics remained comfortable, with interest coverage ratio (ICR) and debt service coverage ratio (DSCR) improving to 3.20 times and 2.40 times, respectively, in FY26 (provisional), compared to 1.73 times and 1.56 times in FY25. Further, total outside liabilities to tangible net worth (TOL/TNW) and Debt/EBITDA stood at 1.05 times and 1.80 times, respectively, in FY26 (provisional). Acuité believes that the financial risk profile is expected to remain moderately stable over the medium term supported by absence of debt funded capex plan.

Weaknesses

Intensive working capital Management:
The working capital management of SEPPL remains intensive, marked by an increase in gross current assets (GCA) days to 233 days in FY26 (prov) from 211 days in FY25. This elongation was primarily driven by higher debtor days and inventory holding. Debtor days increased to 58 days in FY26 (prov) from 37 days in FY25; however, the company’s average collection period is generally around 60 days, and the higher year-end debtor levels are largely attributable to year-end booking of revenues. Inventory days marginally increased to 100 days in FY26 (prov) from 98 days in FY25, as finished products can be dispatched only after the inspection from their customer end, resulting in elevated inventory levels. Other Current Assets stood at Rs.4.55 crore in FY 26 (prov) as compared to Rs.4.26 crore in FY 25 led to stretch in GCA days. Despite the stretched GCA cycle, fund-based working capital limit utilization remained relatively low, mainly supported by advance receipts of around 25–30% from customers. Acuité believes that the working capital management will continue to remain intensive over the medium term, given the inherent nature of the company’s operations.

Decline in scale of operation:
SEPPL’s revenue improved to Rs. 28.07 crore in FY25 from Rs. 25.98 crore in FY24, driven primarily by timely execution of Ministry of Defense (MoD) orders, which contributed around 73% of total revenue and largely pertained to Missile-cum-Ammunition (MCA) barge construction. However, revenues declined to Rs. 21.41 crore in FY26 (prov) due to operational disruptions in H1FY26 arising from medical exigencies in the family-run management, which restricted participation in new tenders and delayed execution of existing orders, thereby impacting performance in the latter half of the year as well. Operating margin moderated to 5.13% in FY26 (prov) from 7.95% in FY25, primarily on account of execution delays in an ongoing Active Wastewater Barge (AWB) order valued at Rs. 36.58 crore (Rs. 24.00 crore construction and Rs. 12.58 crore AMC), Nevertheless, production for this order commenced only in November 2025, leading to a mismatch between cost incurrence and revenue recognition during the year. Nevertheless, PAT margin improved marginally to 2.28% in FY26 (prov) from 2.17% in FY25, supported by lower finance costs due to reduced utilization. Going forward, SEPPL has an outstanding order book of Rs. 48.68 crore and has participated in tenders aggregating Rs. 62.95 crore; Acuité believes that while operating performance is expected to improve, timely execution of orders, ability to secure new contracts, and sustainability in profitability will remain key monitorable.

Rating Sensitivities

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

Increase in scale of operation to Rs.35 crore and improvement in margin

Improvement in working capital management

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

Further decline in scale of operation with margin declines to 3.5% or more
Any elongation in working capital management

Liquidity Position

Adequate

The liquidity position of the Company is marked adequate supported by NCA of Rs. 0.74 crore against debt repayment of Rs. 0.07 crore in FY 26 (prov). NCA is expected to be in range of Rs. 0.85-1 crore against long term repayment of Rs.0.10-0.11 crore in the medium term. Current ratio stood at 1.62 times in FY 26 (prov). Cash and bank balance stood at Rs.2.14 crore in FY 26 (prov). Fund base limit utilization stood at 68% based on the closing balance for six months ended April-26. Non- Fund base limit utilization stood at 50%. Acuité believes that the liquidity position of the company will continue to remain adequate over the medium term on account of steady accruals and absence of debt funded capex plan.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	21.41	28.07
PAT	Rs. Cr.	0.49	0.61
PAT Margin	(%)	2.28	2.17
Total Debt/Tangible Net Worth	Times	0.24	0.48
PBDIT/Interest	Times	3.20	1.73

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
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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 Mar 2025	Bank Guarantee/Letter of Guarantee	Short Term	15.60	ACUITE A4+ (Reaffirmed)
	Cash Credit	Long Term	8.00	ACUITE BB \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	1.40	ACUITE BB \| Stable (Reaffirmed)
07 Dec 2023	Bank Guarantee/Letter of Guarantee	Short Term	15.60	ACUITE A4+ (Reaffirmed)
	Cash Credit	Long Term	8.00	ACUITE BB \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	1.40	ACUITE BB \| Stable (Reaffirmed)
27 Jun 2023	Bank Guarantee/Letter of Guarantee	Short Term	15.60	ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
	Cash Credit	Long Term	8.00	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Working Capital Demand Loan (WCDL)	Long Term	0.90	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Stand By Line of Credit	Long Term	0.50	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Listing Status	Regulated By	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
State Bank of India	Not avl. / Not appl.	Bank Guarantee/Letter of Guarantee	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	15.60	Simple	ACUITE A4+ \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	8.00	Simple	ACUITE BB \| Stable \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.40	Simple	ACUITE BB \| Stable \| Reaffirmed

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Shreya Banerjee
Analyst-Analytical Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:

Sr. No.	Instrument / activity Name	Regulator of the instrument
1	Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities)	SEBI
2	Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)	MCA
3	Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	SEBI
4	Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)¹	SEBI
5	Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	RBI
6	Listed Commercial Paper and NCDs with original maturity less than 1 year	RBI
7	Unlisted Commercial Paper and NCDs with original maturity less than 1 year	RBI
8	Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ²	RBI
9	External Commercial Borrowings and other similar borrowings	RBI
10	Certificates of Deposit	RBI
11	Fixed Deposits raised by NBFCs, Banks, HFCs, FIs	RBI
12	Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs	MCA
13	Inter Corporate Deposits/Loans extended by Corporates	MCA
14	Borrowing programme ³	-
15	Issuer Ratings ⁴	-
16	Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs)	SEBI
17	Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs	SEBI
18	Listed Security Receipts	SEBI
19	Unlisted Security Receipts	RBI
20	Independent Credit Evaluation (ICE)	RBI
21	Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs)	RBI
22	Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities))	SEBI
23	Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities))	MCA
24	Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) ¹	Investor-side Regulator such as IRDAI, PFRDA ⁵

¹Includes securitisation transactions involving assignee payout, acquirer's payout.

² Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
³The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators.
⁴ There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
⁵ These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.

B. Other activities:

Sr. No.	Activity Name	Regulator of the activity
1	Monitoring Agency	SEBI
2	Research activities, incidental to rating, such as research for Economy, Industries and Companies ⁶	Not applicable

⁶ permitted by SEBI vide SEBI Master Circular for CRAs.

Disclosure on instruments / activities and names of regulators:

A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:

https://acuite.in/Activities-and-Regulators.html

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.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.