Press Release August 06, 2026 SRI SAI LAKSHMI CONSTRUCTIONS AND CO 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	20.00	ACUITE BB+ | Stable | Reaffirmed	-	RBI
Bank Loan Ratings	0.00	70.00	-	ACUITE A4+ | Reaffirmed	RBI
Total Outstanding	0.00	90.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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 its long-term rating of ‘ACUITE BB+’ (read as ACUITE double B Plus) on Rs. 20.00 Cr. bank facilities and reaffirmed its short term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on Rs.70.00 Cr. bank facilities of Sri Sai Lakshmi Constructions and Co (SSLC). The outlook is ‘Stable’. Rationale for rating: The rating reaffirmation takes into account stagnant scale of operations in FY25 & FY26 owing to delay in executions while outstanding order book remains healthy at ~Rs.928 Cr. as on 31st March 2026. Additionally, the rating derives comfort from moderate financial risk profile with low debt profile and comfortable debt protection metrics. However, rating remains constrained to the firm’s high working capital-intensive operations involving work in progress and retention receivables. The rating also factors the risk of capital withdrawal owing to partnership nature of business. Going forward, ability of the firm to scale up its operations backed by timely execution of its order book while maintaining its profitability margins will continue to remain a key rating monitorable.

About the Company

­Incorporated in 1997, Sri Sai Lakshmi Constructions and Co (SSLC) is a partnership firm engaged in the business of civil construction and primarily undertakes irrigation works in Andhra Pradesh (AP) and  Telangana. The firm is promoted by Mr. K. Venkateswara Rao and Mr. G. Ratna Prakash along with 7 other partners.

Unsupported Rating

­Not Applicable

Analytical Approach

­­­Acuité has considered the standalone business and financial risk profile of SSLC to arrive at the rating.

Key Rating Drivers

Strengths

Established track record of operations supported by experienced management­ SSLC possesses an established track record of over two decades in infrastructure development, specializing in irrigation projects across Andhra Pradesh and Telangana under the leadership of its founding promoters, Mr. K. Venkateswara Rao and Mr. G. Ratna Prakash, who are supported by an experienced team of professionals.  Moderate financial risk profile Financial risk profile of the firm stood moderate marked by improved net worth, low gearing and comfortable debt protection metrics. The tangible net worth stood at Rs.132.65 Cr. as on 31st March 2026(Prov.) as against Rs.126.20 Cr. as on 31st March 2025 including quasi equity of Rs.10 Cr. The gearing (debt-equity) has remained below unity over the years. The overall Debt- EBITDA stood at 1.46 times in FY 26 (Prov.) against 1.51 times in FY 25. However, net worth remains susceptible to capital withdrawal considering partnership nature of business.

Weaknesses

Stagnant scale of operation due to delay in project execution The revenue of the firm has grown at a sluggish pace with Rs. 135.96 Cr. in FY 26 (Prov.) compared to Rs. 131.23 Cr. in FY 25, owing to delay in project executions on account of land acquisition issues and delay in fund releasing by the state government. However, the current unexecuted order book of ~Rs. 928 Cr. as of 31st March 2026. Of these orders worth Rs 393 Cr. pertains to FY23-FY25 which, highlights a heavy backlog despite providing revenue visibility over the medium term. Furthermore, operational efficiency has consistently strengthened, with EBITDA margins improving from  7.69% in FY25 to 8.58% in FY 26 (Prov.), though profitability remains susceptible to fluctuations in raw material procurement costs depending on the execution stage of ongoing contracts. Going forward, the EBITDA margin is projected to stabilize between 8.50- 8.60%. Meanwhile, the PAT margin stood at 5.95% in FY26 (Prov.), recovering from 4.87% in FY 25, majorly due to increased non-operating income which consists of FDR interest received, rent received, interest received on IT refund and seigniorage charges. ­Working capital intensive operations The working capital operations of SSLC are highly intensive, driven by its elevated gross current assets (GCA) of 499 days for FY 26 (Prov.) as against 471 days for FY 25. This stagnation is mainly driven by massive retention money locked up with the government and a significant increase in inventory days and debtors’ days. The firm’s debtor days remain structurally trapped as public sector fund releases are heavily back ended toward the fiscal year-end; consequently, despite standard credit terms of 60 to 90 days, approximately 60% of project revenue is delayed and only realized during the year-end period. The inventory days includes work in progress which stood stretched at 97 days in FY 26 (Prov.) against 90 days in FY 25. Further, the creditors cycle was sharply compressed to 18 days in FY 26 (Prov.) as against 40 days in FY 25. Moreover, the working capital is expected to remain highly stressed and intensive over the medium term considering the volatile nature of business. Tender based nature of operations, competitive & fragmented industry SSLC is into irrigation projects, wherein the sector is marked by the presence of several mid to large sized players. The risk becomes more pronounced as tendering is based on minimum amount of bidding on contracts and there exists susceptibility to inherent cyclicality in the infrastructure segment. Further, project announcements is dependent on state government's thrust on irrigation and other infrastructure works.  Therefore, Acuité believes that SSLC's revenues and margins are susceptible to the competitive bidding scenario, along with the geographical concentration of its projects to the states of Andhra Pradesh and Telangana.

Rating Sensitivities

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

Steady growth in scale of operations with timely execution and growth in order book resulting in revenues above Rs 200.00 Cr coupled with sustaining profitability margin. Improvement in the GCA days.

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

­De-growth in operating performance due to delay in execution leading to revenues falling below Rs 100 Cr. or significant decline in profitability margins. Any further elongation in working capital management leading to deterioration in financials risk profile and liquidity.

Liquidity Position

Adequate

The firm’s liquidity position is adequate marked by sufficient net cash accruals against its maturing debt obligations. The firm's net cash accruals stood higher at Rs.11.09 Cr. in FY26(Prov.) with maturing debt obligations of Rs.1.47 Cr. in FY 26 (Prov.). Going forward, it is expected to generate a sufficient cash accrual in the range of Rs.12-13 Cr against the maturing repayment obligations in the range of Rs.0.34 -0.40 Cr. over the medium term. However, the reliance on working capital is high as evident by the bank limit utilization. The average bank limit utilization for fund-based limits stood at ~ 92 percent for the last 12 months ended May 2026; and the non-fund-based limits stands utilized at 79% during the same period. The company had an unencumbered cash and bank balance of Rs. 1.06 Cr.  as on 31st March , 2026 (Prov.). Further the current ratio stood at 2.54 times in FY 26 (Prov.)

Outlook:

­Stable

Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	135.96	131.23
PAT	Rs. Cr.	8.09	6.39
PAT Margin	(%)	5.95	4.87
Total Debt/Tangible Net Worth	Times	0.16	0.14
PBDIT/Interest	Times	4.20	4.18

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 • 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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 09 May 2025 Bank Guarantee/Letter of Guarantee Short Term 39.00 ACUITE A4+ (Reaffirmed) Proposed Bank Guarantee Short Term 31.00 ACUITE A4+ (Reaffirmed) Proposed Cash Credit Long Term 10.00 ACUITE BB+ | Stable (Reaffirmed) Cash Credit Long Term 10.00 ACUITE BB+ | Stable (Reaffirmed) 09 Feb 2024 Bank Guarantee/Letter of Guarantee Short Term 37.00 ACUITE A4+ (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 8.15 ACUITE A4+ (Reaffirmed) Proposed Bank Guarantee Short Term 13.42 ACUITE A4+ (Reaffirmed) Cash Credit Long Term 10.00 ACUITE BB+ | Stable (Reaffirmed) Cash Credit Long Term 8.00 ACUITE BB+ | Stable (Reaffirmed) Proposed Cash Credit Long Term 13.43 ACUITE BB+ | Stable (Reaffirmed)

­

­

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Roshni Gupta Associate Analyst - Rating 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   1 Includes 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. 3 The 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.