­For arriving at the ratings, ACUITE has consolidated the business and financial risk profiles of BGR Mining and Infra Limited (BGRMIL) ,BGR Deco Consortium Private Limited (BDCPL); BI Mining Private Limited, Bain Global Resources Private Limited, Skade Minerals LLP, Shar Projects Private Limited. On account of common management, operational and financial linkages and cross-corporate guarantees between six companies.

­Experienced management and long track record of operations
The group has been engaged in coal excavation and transportation for over two decades now and was initially carrying out these activities for the subsidiaries of Coal India Limited. Over the years, the group has started catering to several other reputed companies also, like Central Coalfields Limited, National Thermal Power Corporation, Vedanta, and The West Bengal Power Development Corporation Limited (WBPDCL) (rated at ACUITE A-/Stable/A2+). The group is currently headed by founder directors Mr. B. Umapathy Reddy, Mr. I. Sudhakara Reddy, and the second-generation directors. Extensive experience of the promoters and an operating track record of more than three decades in the industry have helped the group in understanding the market dynamics & establishing strong relationships with suppliers and bagging large-size tenders. Acuité believes the vast experience of the management will support the business going forward.
 
Improved scale of operations along with robust order book position
BGR group significant growth with YOY growth of 25.10 percent in FY2025 as compared to FY2024. Revenues stood at Rs.4,229.44 Cr. in FY2025 as against Rs.3,380.85 Cr. in FY2024. The improvement in revenue is on account of execution of MDO projects in all the group companies and increased capacity in Manoharpur MDO project and Pachhwara north coal block project. The EBITDA margins of the company are range bound which stood at 35.67 percent in FY2025 as compared to 28.42 percent in FY2024 and 29.57 percent in FY2023. In the 9MFY 2026, the group has achieved a turnover of Rs.4,379.18 Cr. (Includes Intercompany transactions) with an EBITDA margin of 35.88 percent. Group had a robust order book position of Rs. 86,325.89 Cr. as on December 2025 to be executed over the next 25 years, which translates into revenue visibility of 20.04x of FY2025 group’s revenue. The group at present has 4 running MDO projects, 3 projects yet to start. The margins of the company will also be maintained due to the presence of a price variation clause that protects the group from any adverse movement in the prices of coal and other materials. All contracts have a built- in price escalation clause that protects the Group from any adverse fluctuations in the prices, which helps the group in maintaining healthy EBITDA margins. Acuite believes that the scale of operations will improve on account of execution of the orderbook over the near to long term.

Long-term Contract; Low Offtake Risk; Escalation clause in contracts
Group has entered into a long-term contract of 25 years as a mine developer-cum-operator (MDO) for the supply of coal to The West Bengal Power Development Corporation Limited (WBPDCL) (rated at ACUITE A- /Stable/A2+) through the Pachhwara open-cast project (PCMPL) in the Pachhwara North Coal Block in Jharkhand, Central Coalfields Limited, National Thermal Power Corporation, and Vedanta, leading to limited offtake risk for the BGR group. Acuité assesses the offtake risks associated with the MDO business to be low, given the group enters into firm agreements with annual target supply. The agreement also protects the group from price volatility, as the pricing formula to cover any cost escalation has been agreed upon. Additionally, coal demand is likely to continue to increase in the medium-to- long term. The major cost for the group for such services is the diesel cost for plying the equipment, thus exposing the group to volatility in diesel prices. While the diesel costs are pass-through in nature, there is generally a time lag before the same can be built into the billing cycle. Further, the cost of labour, which is another major cost, has an escalation clause.
 
Healthy financial risk profile metrics
The group’s financial risk profile is healthy, marked by strong net worth, low gearing and healthy debt protection metrics. The net worth of the company stood at Rs.2813.43 Cr. and Rs.2074.30 Cr. as on March 31, 2025, and 2024 respectively. The improvement in net worth is due to accretion of reserves. Gearing of the company stood at 0.19 times as on March 31, 2025, against 0.23 times as on March 31, 2024. Debt protection metrics – Interest coverage ratio and debt service coverage ratio stood at 17.94 times and 6.14 times as on March 31, 2025, respectively as against 11.25 times and 2.65 times as on March 31, 2024, respectively. Healthy debt protection metrics on account of strong cash accruals. TOL/TNW (Total outside liabilities/Total net worth) stood at 0.49 times and 0.46 times as on March 31, 2025, and 2024 respectively. The debt to EBITDA of the group stood at 0.32 times as on March 31, 2025, as against 0.46 times as on March 31, 2024. Acuité believes that the group’s financial profile is likely to improve going forward, supported by strong internal accrual generation and no major increase in the group's debt levels even though the operation of the group is capital intensive in nature with continuous capex incurred for procuring heavy earthmoving equipment (like dumpers, excavators, bulldozers, etc.) and other mining equipment (like compactor, drillers, cranes, etc.) for replacement purpose.

­Working capital intensive operations
The group’s working capital operations is intensive, with gross current assets (GCA) which stood at 203 days in FY2025 as against 199 days in FY2024. The GCA days are at higher side mainly on account of high cash & bank balances of Rs. 542.81 Cr. Inventory days stood at 5 days in FY2025 as against 8 days in FY2024. The inventory remains low since the company is a service provider. Debtor day’s improved and stood at 52 days in FY2025 as against 61 days in FY2024. The improvement in debtor days is due improved credit terms. The business model entails extraction and excavation of coal with longer execution periods. Billing is done on a milestone basis. Generally, debtor days period remains comfortable around 40-55 days and also, they receive their payment within 15-25 days from the date they raise the invoice. Acuité believes that the working capital operations of the company will remain in the similar range in near to medium term.

Susceptibility to risks related to heightened regulations in the mining industry
Operational and regulatory risks in the mining industry have increased significantly in recent years. Regulatory actions have largely been to clamp down on illegal mining and have included withholding of permits and a ban on export and mining. However, as BGR Group is majorly working for state and central government entities having long-term contracts, the risk is moderated to a large extent.

• Growth in revenues more than 25 percent, and sustainability in the profitability.

• Sustenance of healthy operating margins resulting in net cash accruals of more than Rs. 1500 Cr.

• Any large debt funded capex, impacting the financial risk profile and liquidity

• Revenue falling by 25-30 percent and steep decline in profitability