| Longstanding experience of management in toll collection business
The promoters of the company have more than a decade experience in the toll collection business. The company has been a pre-qualified bidder under NHAI since 2016, which has provided it with good bidding opportunities. As of April 2026, the company is currently operating 22 toll plazas and has executed almost 40 contracts in FY26. Additionally, the company is operating toll collections for two expressway – Agra-Lucknow & Bundelkhand which was awarded under joint venture (JV) structure having its partnership share of 60 percent and 49 percent respectively. Acuité believes that SSEDPL will benefit from its established position in toll collections business and its strategy of scaling up through successful bids.
Healthy scale of operations
While the revenue of the company stood moderated in FY25 and FY26 (Est.) to Rs. 2188.27 Cr. and Rs. 1627.97 Cr. respectively as compared to Rs. 2374.90 Cr. in FY24, however, scale of operations remains healthy and expected to improve in FY27. The decline is primarily on account of conservative bidding by the management in order to bid for better profitability contracts. Also, owing to the implementation of FASTag annual pass scheme by NHAI for the private vehicles in August 2025, the revenue of the company has been impacted in the second half of FY26. However, the authority compensates on a weekly basis for the operational expenses incurred by the company. Further, the operating margins of the company are majorly driven by tender-based nature of operations with increasing competition and the traffic density across the toll asset. While there was moderation in operating margins to 0.88 percent in FY25, however, the margins have improved in FY26 (Est.) to almost 1.34 percent on account of venturing into profitable contracts. Also, the contribution of share of profits from JV (~Rs. 10.68 Cr. in FY26) have improved the net profitability for the company. Going forward, the management plans to continue bidding for toll plazas along with increase in expressways which shall drive the revenue and profitability of the company.
Healthy financial risk profile
The financial risk profile of the company stood healthy marked by healthy net worth of Rs. 167.78 Cr. as on March 31, 2025. Also, the total debt stood reduced at Rs. 73.06 Cr. as on March 31, 2025 (Rs. 109.20 Cr. as on March 31, 2024) that majorly consisted of working capital borrowings along with long-term debt availed for paying stamp duty to the government authority for one of the expressway contract. Therefore, the gearing (debt/equity) stood reduced at 0.44 times as on March 31, 2025 (0.68 times in FY24). Further, the debt protection metrics stood comfortable marked by interest coverage ratio of 2.68 times in FY25 and debt protection service coverage ratio of 2.25 times in FY25. Going forward, the financial risk profile is expected to remain healthy over the medium term supported by steady cash accruals and in absence of significant long-term borrowings by the company.
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| Large requirements for fund-based limits and bank guarantees (BG) may hinder revenue growth
SSEDPL is required to submit 15-days cash deposit and 15-days of BG for a one-year contract / 15-days of either cash deposit or BG for a three-month contract, to NHAI. This money is released at the end of the tenure of a contract. Any significant rise in the toll contracts would require timely increase in the working capital limits and remains a key rating sensitivity.
Susceptibility of toll collection towards traffic movements along with contract renewal risk
SSEDPL is involved in toll collection on a short-term contractual basis for NHAI. The contracts are typically awarded for periods of 3 to 12 months, after which the company has to bid afresh for the project. This creates a renewal risk for the company. Additionally, the company operates entirely on a tender-based business model, making it vulnerable to strong competition from other bidders. The cash flows are solely dependent on toll collections which are subject to fluctuations in traffic volume, economic slowdown, threat from traffic movement to alternate routes and manpower mismanagement. Therefore, operating margins are also low. Any events or regulatory changes impacting the traffic could pressure toll collections, thereby, affecting the company’s cash flows. The company mitigates this risk to a certain extent it has its pre-survey team that carries out the entire traffic survey before the bidding.
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