Press Release June 20, 2025 UMSL LIMITED Rating Assigned and Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	95.00	ACUITE BBB- | Negative | Downgraded | Stable to Negative	-
Bank Loan Ratings	100.00	-	ACUITE A3+ | Assigned
Bank Loan Ratings	178.00	-	ACUITE A3+ | Downgraded
Total Outstanding	373.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­Acuite has downgraded its long-term rating to 'ACUITE BBB-' (read as ACUITE triple B minus) from 'ACUITE BBB' (read as ACUITE triple B) and a short-term rating to 'ACUITE A3+' (read as ACUITE A three plus) from 'ACUITE A2' (read as ACUITE A two) on the Rs.273.00 Cr. bank facilities of UMSL Limited. The outlook revised to 'Negative' from 'Stable'. Acuite has assigned its short-term rating of 'ACUITE A3+' (read as ACUITE A three plus) on the Rs.100.00 Cr. bank facilities of UMSL Limited. Rationale for the rating The rating action factors the company's declining operating performance as reflected by dip in operating income to Rs. 358.03 Cr. in FY25 (prov.) against Rs. 480.36 Cr. in FY24 and Rs. 493.01 Cr. in FY23. This has mainly been due to delay in booking revenues by the Company and slow down in execution of orders due to Central & State Elections. Furthermore, the current order book of Rs. 539.77 Crore approximately as on 28th May 2025 provides lower revenue visibility over the medium term with an OB/OI of 1.51 times. The operating profitability declined to 6.63 per cent in FY2025 (prov.) as against 7.67 per cent in FY2024 largely since fixed costs could not be absorbed fully. The ratings also factor in company’s intensive working capital operations. However, the rating get comfort from the healthy financial risk profile and experience of the promoters in the business since decades.

About the Company

­Incorporated in 1991, UMSL Limited is engaged in infrastructure development like construction of road, highways, bridges, pipelines, etc with its geographical span extending to Odisha, Jharkhand, Chhattisgarh and Maharashtra. The company was initially involved in providing specialised logistics solutions to various companies, however, since 2012, the company diversified into infrastructure construction segment which has been contributing a large share of the revenues over the past few years. The company also provides logistics services, which contributes a miniscule percentage of the total revenue, majorly to its group companies.

Unsupported Rating

­Not applicable

Analytical Approach

­Acuite has considered the standalone business and financial risk profile of UMSL Limited to arrive at the rating.

Key Rating Drivers

Strengths

­Long track record of operations and experienced management The company has a long operational track record of around three decades in the road transportation of minerals and metal products and more than one decade of experience in executing EPC contracts like construction of road, bridges, buildings, canals, etc. It also caters to the logistics requirements of its Group company, Indian Metal & Ferro Alloys Limited (IMFA), which is India’s largest fully integrated producer of ferro alloys. Further, the Whole time Director and Vice Chairperson, Ms. Paramita Panda has over 2 decades of professional expertise and has served as Director on the Board of Indian Metals and Ferro Alloys Limited (IMFA). UMSL Limited has hired renowned professionals from the industry in the recent years at various leadership positions across business verticals and project divisions, which augur well for the future growth prospects of the company. Acuite believes that the long operational track record and highly experienced professionals on the Board shall support the business risk profile of the company to an extent. Healthy Financial Risk Profile albeit decline in debt protection metrices The financial risk profile of the company is healthy albeit decline in net-worth of Rs. 371.54 Crore as on 31st March 2025 (prov.) against Rs. 373.81 Crore as on 31st March 2024 due to company incurring losses in FY25(prov.). Further, the total debt of the company stood at Rs. 145.88 Crore as on 31st March 2025 (prov.) against Rs. 135.02 Crore as on 31st March 2024. The capital structure of the company is comfortable marked by gearing ratio of the company which stood at 0.39 times as on 31st March 2025 (prov.) against 0.36 times as on 31st March 2024. However, the coverage indicators of the company reflected by interest coverage ratio and debt service coverage ratio of the company which stood at 1.14 times and 0.82 times respectively as on 31st March 2025 (prov.) against 1.66 times and 1.02 times respectively as on 31st March 2024 due to lower profits. The debts have been repaid from earlier cash reserves of the Company. The TOL/TNW ratio of the company stood at 0.89 times as on 31st March 2025 (prov.) against 0.84 times as on 31st March 2024 and DEBT-EBITDA of the company stood at 6.14 times as on 31st March 2025 (prov.) against 3.73 times as on 31st March 2024 as the Company has borrowed both working capital loans and equipment finance loans albeit low EBDITA. Acuité believes that going forward the financial risk profile of the company is a key monitorable.

Weaknesses

­Decline in scale of operations The company witnessed a decline in its scale of operations marked by an operating income of Rs. 358.03 Cr. in FY2025 (prov.) as against Rs. 480.36 Cr in FY2024 due to slowdown in execution of order book due to the Central & State Election. The Company had an order book of Rs. 539.77 Crore approximately as on 28th May 2025, with an OB/OI of 1.51 times, which provides it lower revenue visibility over the medium term. Going forward, the ability of the company to bag new orders and timely execution of the existing orders will remain a key rating monitor able. The EBITDA margin of the company stood at 6.63 per cent in FY2025 (prov.) as against 7.67 per cent in FY2024 due to higher fixed costs. The PAT margin of the company stood at (0.65) per cent in FY2025 (prov.) against 0.79 per cent in FY2024 due to high interest cost. Acuité believes that going forward the company’s ability to ramp up operations alongwith improvement in profitability will remain a key monitorable. Intensive Working Capital Operations Company has intensive working capital operations as evident from gross current assets (GCA) of 320 days in FY2025 (prov.) as compared to 229 days in FY2024. Intensiveness of Working capital is on account of high Receivable Days. Debtor days stood at 252 days in FY2025 (prov.) as against 155 days in FY2024 due to delay in the release of fund by the Government departments and build up of unbilled revenue which increased to Rs. 184.57 Cr. in FY25 (prov.) from Rs. 132.06 Cr. in FY24. Inventory days stood at 31 days in FY25 (prov.) against 29 days in FY24 whereas, creditor days stood at 184 days in FY2025 (prov.) against 113 days in FY2024. Acuité believes that the working capital operations of the company will remain intensive over the medium term. Susceptibility to tender-based operations Revenue and profitability entirely depend on the ability of civil construction companies to win tenders. Also, intense competition among civil contractors prompts players to bid aggressively to bag contracts and thus, restricts the operating margin. Amidst cyclicality inherent in the construction industry, ability to maintain the margin through operating efficiency becomes critical.

Rating Sensitivities

­Movement of the scale of operations and margins Timely execution of order book and ability to bag new orders Movement of working capital operations Movement in debt protection metrices

Liquidity Position

Stretched

The liquidity profile of the company is stretched. The net cash accruals of company stood at Rs. 3.01 Cr. in FY25 (prov.) against the CPLTD of Rs. 8.38 Cr. for the same period. The repayments were met out of cash reserves of the Company. The company is undertaking debt funded capex for funding equipment. The company has cash & bank position of Rs. 0.88 Cr. and current ratio stood at 1.27 times for FY25 (prov.). The average fund based bank limit utilization is at ~91.25% and non-fund based bank limit utilization is at ~82.92% for the 9 months’ period ending March 2025. Acuite believes that the liquidity of the company will remain key monitorable over the medium term reflected by low accruals versus repayments and expectation of high dependence on bank lines to fund working capital requirements.

Outlook: Negative

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	358.03	480.36
PAT	Rs. Cr.	(2.32)	3.81
PAT Margin	(%)	(0.65)	0.79
Total Debt/Tangible Net Worth	Times	0.39	0.36
PBDIT/Interest	Times	1.14	1.66

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 22 Mar 2024 Bank Guarantee (BLR) Short Term 63.00 ACUITE A2 (Assigned) Bank Guarantee (BLR) Short Term 40.00 ACUITE A2 (Assigned) Bank Guarantee (BLR) Short Term 40.00 ACUITE A2 (Assigned) Bank Guarantee (BLR) Short Term 35.00 ACUITE A2 (Assigned) Cash Credit Long Term 30.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 15.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 30.00 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 20.00 ACUITE BBB | Stable (Assigned)

­

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 63.00 Simple ACUITE A3+ | Downgraded ( from ACUITE A2 ) IDBI Bank Ltd. Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 40.00 Simple ACUITE A3+ | Downgraded ( from ACUITE A2 ) State Bank of India Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 40.00 Simple ACUITE A3+ | Downgraded ( from ACUITE A2 ) Indian Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 35.00 Simple ACUITE A3+ | Downgraded ( from ACUITE A2 ) HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE BBB- | Negative | Downgraded | Stable to Negative ( from ACUITE BBB ) IDBI Bank Ltd. Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 18.00 Simple ACUITE BBB- | Negative | Downgraded | Stable to Negative ( from ACUITE BBB ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE BBB- | Negative | Downgraded | Stable to Negative ( from ACUITE BBB ) Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE BBB- | Negative | Downgraded | Stable to Negative ( from ACUITE BBB ) Not Applicable Not avl. / Not appl. Proposed Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE A3+ | Assigned Not Applicable Not avl. / Not appl. Proposed Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 75.00 Simple ACUITE A3+ | Assigned IDBI Bank Ltd. Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.00 Simple ACUITE BBB- | Negative | Downgraded | Stable to Negative ( from ACUITE BBB )

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Siddharth Garg Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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.