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| Product | Quantum (Rs. Cr) (SEBI) | Quantum (Rs. Cr) (Other FSR) | Long Term Rating | Short Term Rating | Regulated By |
| Bank Loan Ratings | 0.00 | 400.00 | ACUITE BB+ | Stable | Reaffirmed | - | RBI |
| Total Outstanding | 0.00 | 400.00 | - | - | - |
| Total Withdrawn | 0.00 | 0.00 | - | - | - |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. |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of 'ACUITE BB+' (read as ACUITE double B plus) on the Rs.400.00 Cr. bank facilities of Suprada Constructions Private Limited (SCPL). The outlook is 'Stable'.
Rationale for reaffirmation: The rating reaffirmation factors in the moderation in revenues and profitability while maintaining moderate financial risk profile marked by modest net worth, low gearing and moderate debt protection metrics. The rating also considers extensive experience of the management and established operational track record of the company. The rating, however, remained constrained due to moderate orderbook position as on March 31, 2026 which consist mainly of a legacy order book with low inflow of newly secured orders. The rating is also constrained by working capital intensive operations, high geographical concentration in order book and tender-based nature of business in an intensely competitive construction sector. |
| About the Company |
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Karnataka Based; Suprada Constructions Private Limited (SCPL) was incorporated in 2018. The company is engaged in infrastructure development projects like drinking water projects, canal embankment, underground drainage, road development and construction of buildings for various government and private players. It is promoted by Mr. Madesh Narayan Shetty, Mr. Seetaram Shetty Madayya, Mr. Narayan Madayya Shetty, Mr. Bhujanga Madayya Shetty, Mr. Vasantha Vittal Bhandary, Mr. Prathyaksha Shetty Seetharam and Mr. Charith Bhujanga Shetty.
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| Unsupported Rating |
| Not applicable. |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of SCPL for arriving at the rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established track record of operations
SCPL, a special-class civil contractor, has been into existence with its specialty in laying pipeline for water supply and sewerage under the central government-led scheme ‘Jal Jivan Mission’ (erstwhile known as National Rural Drinking Water Programme), majorly in the state of Karnataka. Mr. U Seetharam Shetty, the promoter of SCPL, is having 50 plus years of experience in the line of civil construction. SCPL has executed multiple orders which included construction work of water supply components, water supply and underground drainage systems, sports complex, bridges, series of residential school complexes, factories and manufacturing plants and others. With promoter's extensive industry experience and timely execution of past projects, SCPL has been able to establish a long-standing relationship with its suppliers and various government bodies. Acuité believes that the promoter's extensive industry experience and established relation with its principal contractors and suppliers will aid SCPL's business risk profile over the medium term.
Moderate financial risk profile SCPL’s financial risk profile remained moderate, marked by healthy net worth, low gearing and moderate debt protection metrics. The net worth of the company stood at Rs.139.66 Cr. as on March 31, 2026(Prov.) as against Rs.128.03 Cr. as on March 31, 2025 . The improvement in net worth is due to accretion of reserves. The company has total debt of Rs. 108.75 Cr, comprising of Rs. 31.06 Cr. long-term debt, Rs. 67.04 Cr. short-term debt, and Rs. 10.65 Cr. of USL as of March 31, 2026(Prov.). Gearing of the company stood at 0.78 times as on March 31, 2026(Prov.), against 0.78 times as on March 31, 2025. Debt protection metrics – Interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at 2.43 times and 1.25 times as on March 31, 2026(Prov.), respectively as against 2.91 times and 1.36 times as on March 31, 2025, respectively. TOL/TNW (Total outside liabilities/Total net worth) stood at 1.38 times and 1.57 times as on March 31, 2026(Prov.), and 2025 respectively. The debt to EBITDA of the company stood at 2.70 times as on March 31, 2026(Prov.), as against 2.35 times as on March 31, 2025. Acuité believes that the financial risk profile will remain moderate in the absence of any major debt-funded capital expenditure plan in the near term.
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| Weaknesses |
| Moderation in revenues along with moderate order book position
The company’s operating performance has moderated with revenues stood at Rs. 244.60 Cr. in FY2026 (prov.) as compared to Rs. 294.43 Cr. in FY2025 and Rs. 424. 92 Cr in FY2024. The moderation was primarily attributable to delays in the payment cycle, the absence of new project awards, and postponements in obtaining forest clearances for certain projects, which collectively impacted project execution. The company achieved an operating margin of 15.96 percent in FY2026(Prov.) as against 13.52 percent in FY2025. The company having an unexecuted order book position of Rs.762.87 Cr. as on March 31, 2026.; however majority of orders are legacy orders delayed since long thus providing limited revenue visibility for the medium term. Acuité believes that SCPL's timely execution and billing of its unexecuted order book in hand will remain key rating sensitivity factor. Working capital intensive operations The company's operations remained working capital intensive, with high gross current assets (GCA) which stood at 396 days in FY2026 (Prov.) as against 295 days in FY2025. The GCA days are impacted mainly on account of increased inventory days and debtor days in FY2026(Prov.). Inventory days stood at 103 days in FY2026(Prov.) as against 72 days in FY2025. Debtor days stood at 164 days in FY2026(Prov) as against 149 days in FY2025. The deterioration in debtor days is on account of due to slow realization of funds by the Karnataka govt. Subsequently, the payable period stood at 307 days in FY2026(Prov) as against 215 days in FY2025. respectively. Furthermore, the average utilization for fund-based limits remained almost fully utilised over the last 12 months ending April 2025. Acuité believes SCPL’s ability to improve its working capital cycle will remain key monitorable. Significant geographical and segmental concentration in revenue profile SCPL presently executes orders in the state of Karnataka thereby, leading to significant geographical concentration risk. The major thrust is on water supply scheme and irrigation works by the Government of Karnataka. However, due to several reasons such as delay in land clearance and stretch in payments from the state government agencies, the company is exploring various projects to diversify its operations into other states. The company intends to diversify its order book position to reduce its dependence from Karnataka to other states such as Madhya Pradesh, Orissa Tripura and Mizoram etc. This will help the company to manage its working capital more efficiently going forward. The company intends to keep 50-60per cent of the work order in Karnataka and rest in other states over the next 2-3 yrs. The company has already participated in few tenders in these states. Going forward, the ability of the company to successfully execute larger projects thereby improving the scale up the operations while maintaining adequate profitability will remain a key rating sensitivity. Tender based nature of operations SCPL executes only tender based projects from government & private players with no major reliance on subcontract work. The business depends on the ability to bid for contracts successfully. SCPL has maintained a success rate of 30 to 40 percent in bidding. Tender based operations further limits pricing flexibility in an intensely competitive industry. |
Rating Sensitivities
| Potential triggers (individual or collective) for an upward rating action: |
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| Potential triggers (individual or collective) for a downward rating action: |
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| Liquidity Position: |
| Adequate |
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Company’s liquidity remained adequate marked by net cash accruals of Rs.19.50 Cr in FY2026(Prov), while its maturing debt obligations were Rs. 12.24 Cr during the same period. Going forward the company is expected to generate net cash accruals of Rs. 26.01- 31.58 Cr in FY 2027-28 against Rs.8.78-11.86 Cr debt obligations. The current ratio stood at 1.68 times as on March 31, 2026(Prov). The GCA days stood high at 396 with the limits remain utilized at 98 percent for fund based and 43 percent for Non-Fund based over the 12 months ended March 2026. The company maintains unencumbered cash and bank balances of Rs.7.35 Cr as on March 31, 2026(Prov). Acuité believes going forward, liquidity is expected to remain adequate, supported by moderate accrual generation in the near to moderate term.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 26 (Provisional) | FY 25 (Actual) |
| Operating Income | Rs. Cr. | 244.60 | 294.43 |
| PAT | Rs. Cr. | 11.63 | 14.56 |
| PAT Margin | (%) | 4.75 | 4.94 |
| Total Debt/Tangible Net Worth | Times | 0.78 | 0.78 |
| PBDIT/Interest | Times | 2.43 | 2.91 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• 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 |
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| 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. |
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Contacts |
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