Press Release

Press Release

December 02, 2025

VDB PROJECTS PRIVATE LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	50.00	ACUITE BBB \| Stable \| Reaffirmed	-
Bank Loan Ratings	104.00	-	ACUITE A3+ \| Reaffirmed
Total Outstanding	154.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has reaffirmed its long-term rating of ‘ACUITÉ BBB' (read as ACUITE triple B) and short-term rating of ‘ACUITÉ A3+’ (read as ACUITE A three plus) on the Rs. 154.00 Cr. bank facilities of VDB Projects Private Limited (VPPL). The outlook is ‘Stable’.

Rationale for reaffirmation:
The reaffirmation of the rating reflects stable profitability albeit decline in revenue. The rating is further supported by company's healthy financial risk profile, strong debt protection metrics, low gearing levels and adequate liquidity. The rating also benefits from the company’s robust order book, established operational track record, and the extensive industry experience of its directors. However, rating remains constrained by working capital intensive operations, intense competition in the construction segment, reliance on tender-based operations, vulnerability of operating margins to fluctuations in input material prices and labour costs.

About the Company

VDB Projects Private Limited(VPPL) was incorporated in 2005. The company is engaged in the business of infrastructure development, construction and project management pertaining to roads and highways, irrigation systems and water drains. The company has its registered office in Bangalore, Karnataka. The directors of the company are Ms. Sridevi Mekapati, Mr. Mekapati Abhishek Reddy and Mr. Mekapati Abhinav Reddy.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered standalone business and financial risk profiles of VDB Projects Private Limited (VPPL) to arrive at the rating.

Key Rating Drivers

Strengths

Experienced management
The company is managed by Mr. Mekapati Abhishek Reddy and Mr. Mekapati Abhinav Reddy, along with Ms. Sridevi Mekapati and a team of experienced personnel. The directors have around two decades of experience in construction business. It has successfully completed various projects with a number of reputed counterparties like NHAI, MoRTH, GHM, BBMP to name a few.

Stable profitability albeit marginal decline in revenues and healthy order book position
The company reported a revenue decline of 23.29% in FY2025 (Prov.), with total income falling to Rs 208.52 crore from Rs 271.82 crore in FY2024 and operating margins show improvement, standing at 16.81% in FY2025 (Prov.), compared to 15.08 % in FY2024. The Profit After Tax (PAT) margin is improved and reported at 5.20% in FY2025 (Prov.) versus 4.97% in FY2024. The company recorded revenue of Rs.144.72 Cr till Oct2025 in the current financial year. As of September 2025, the company’s unexecuted order book stands at Rs.786.97 crore, out of which Rs. 678 Cr. belongs to a contract secured from National Highways Authority India for construction of green filed highway on NH-163G (Warangal - Khammam) and Rs.250 Cr. unexecuted works contract related to infrastructure development as of October 2025, which are expected to be completed over the next two to three years, ensuring medium-term revenue visibility. VPPL has established Katakiya Expressway Private Limited as an SPV for executing the HAM Project for of green filed highway on NH-163G (Warangal - Khammam). Acuité believes that the VPPL shall continue to benefit from established track record of operations and healthy order book position.

Healthy financial risk profile
The financial risk profile of the company stood healthy, supported by healthy net worth, low gearing, and average debt protection metrics. As of March 31, 2025 (Prov.) the net worth stood at Rs.168.66 crore, up from Rs.158.42 crore in the previous fiscal year. This improvement is primarily driven by profit accretion to reserves. Total debt level of the company remained at Rs.90.91Cr. (comprising Rs.27.74 Cr. of long-term debt, short-term debt of Rs.31.50 Cr. and current maturities of long-term debt of Rs.17.15 Cr. and USL of Rs.14.52 Cr.) from Rs.87.17 Cr. as on March 31, 2024. The gearing(debt to equity) ratio Stood low at 0.54x in FY2025 (Prov.) from 0.55x in FY2024. Total outside Liabilities/Tangible Net Worth (TOL/TNW) is improved and stood at 0.58 times as of March 31, 2025 (Prov.) against 0.67 times as of March 31, 2024. The debt protection indicators remain moderate, with the Interest Coverage Ratio (ICR) and Debt Service Coverage Ratio (DSCR) reported at 3.89x and 1.37x, respectively, as on March 31, 2025 (Prov.), compared to 3.87x and 1.73x in FY2024. The net cash accruals to total debt (NCA/TD) stood at 0.28 times in FY2025 (Prov.) as compared to 0.31 times in the previous year. Acuite believes the financial risk profile of the company remain healthy on account of expected steady net cash accruals and absence of any major debt-funded capex over the near term.

Weaknesses

Working capital intensive management

Working capital operations of the company remained intensive marked by gross current assets (GCA) of 259 days in FY2025 (Prov.) as against 201 days in FY2024. GCA days have increased primarily due to disruption in supply mandated by NHAI, leading to slow work progress and inventory accumulations, due to which Inventory holding days stood at 106 days in FY2025 (Prov.), up from 79 days in FY2024. Debtor collection period stood at 40 days in FY2025 (Prov.), compared to 51 days in FY2024. The creditors’ days stood at 7 days in FY2025 (Prov.), compared to 10 days in FY2024. Furthermore, the average utilization of working capital for fund-based limits remained high at 81% respectively over the last 12 months ending Sep 2025 and for Non-fund-based Limits moderate Utilization averaging around 64% respectively. Acuite believes that the working capital operations of the company will continue to remain in similar range due the nature of its business.

Concentrated Order Book
VPPL has an unexecuted order book of approximately Rs.786.97 crore related to Construction of roads and highways, water drains etc as on September 2025 and Rs. 250 Cr. unexecuted works contract related to infrastructure development as on October 2025. The company faces a high level of concentration, with around 61.8% of its unexecuted orders coming from a single client, the National Highways Authority of India (NHAI), valued at Rs.678 crore out of total unexecuted order book of Rs 786.97 Cr. The present status of this HAM project is NHAI has acquired around 80% of land and the project achieved the Provisional appointed date on 03 July 2025 and approx Rs.37 Cr. of work has been completed by VPPL as on September 2025. The concentration risk, however, is mitigated by the long-standing relationship and track record of timely payments from NHAI.

Susceptibility of operating margin due to volatility in input material prices and labour charges
The basic input materials for execution of construction projects and works contracts are steel, stone chips, cement, and structures etc. The prices of which are highly volatile. However, currently government agencies’ work contracts have price escalation clause which mitigate price volatility risk to some extent. Furthermore, the operating margin of the company is exposed to sudden spurt in the input material prices along with increase in labour prices being in labour intensive industry.

Rating Sensitivities

Improvement in scale of operation while maintaining the profitability margins.
Timely execution of orders.
Sustenance of healthy financial risk profile.
Further, elongation in working capital cycle

Liquidity Position:

Adequate

The company’s liquidity position is adequate, supported by sufficient net cash accruals (NCAs) to meet its debt repayment obligations. During FY2025 (Prov.), the company generated cash accruals of Rs. 25.06 crore, against maturing debt obligations of Rs. 15.69 crore for the same period. As on March 31, 2025 (Prov.), the company maintained unencumbered cash and bank balances of Rs. 3.74 crore and FD which has no lean of Rs 15.45 Cr, and the current ratio stood at 2.64x. The average utilization of working capital for fund-based limits remained high at 81% respectively over the last 12 months ending Sep 2025 and for Non-fund-based Limits moderate Utilization averaging around 64% respectively. Acuité expects that the liquidity of the company is likely to be adequate over the medium term on account of healthy cash accruals.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	208.52	271.82
PAT	Rs. Cr.	10.84	13.50
PAT Margin	(%)	5.20	4.97
Total Debt/Tangible Net Worth	Times	0.54	0.55
PBDIT/Interest	Times	3.89	3.87

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
04 Sep 2024	Bank Guarantee (BLR)	Short Term	74.00	ACUITE A3+ (Assigned)
	Bank Guarantee (BLR)	Short Term	30.00	ACUITE A3+ (Assigned)
	Cash Credit	Long Term	30.00	ACUITE BBB \| Stable (Assigned)
	Secured Overdraft	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
Indian Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	74.00	Simple	ACUITE A3+ \| Reaffirmed
Karnataka Bank Ltd	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	30.00	Simple	ACUITE A3+ \| Reaffirmed
Indian Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	30.00	Simple	ACUITE BBB \| Stable \| Reaffirmed
Karnataka Bank Ltd	Not avl. / Not appl.	Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE BBB \| Stable \| Reaffirmed

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Dharmavarapu Sai Kiran
Senior 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.