Press Release

Press Release

March 19, 2026

V B PRASADA REDDY
Rating Upgraded, Reaffirmed & Withdrawn

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	3.00	ACUITE B+ \| Upgraded & Withdrawn	-
Bank Loan Ratings	2.00	Not Applicable \| Withdrawn	-
Bank Loan Ratings	5.00	-	ACUITE A4 \| Reaffirmed & Withdrawn
Bank Loan Ratings	2.00	-	Not Applicable \| Withdrawn
Total Outstanding	0.00	-	-
Total Withdrawn	12.00	-	-

Rating Rationale

Acuite has upgraded and withdrawn its long term rating to 'ACUITE B+' (read as ACUITE B Plus) from 'ACUITE B' (read as ACUITE B) and reaffirmed and withdrawn its short term rating of 'ACUITE A4' (read as ACUITE A Four) on the Rs.8.00 Cr. bank facilities of V B Prasada Reddy (VBPR).
The rating is being withdrawn on account of request received from the issuer, and NOC (No Objection Certificate) received from the banker.

Further, Acuité has also withdrawn its rating on the proposed long-term and short-term bank facilities of Rs.4.00 Cr. of V B Prasada Reddy (VBPR) without assigning any rating as it is a proposed facility. The rating has been withdrawn on account of the request received from the issuer.

The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument.

Rationale for upgrade:
The rating upgrade takes into account firm’s substantial improvement in the operating performance demonstrated by increasing revenue and profitability over the years. It also reflects a moderate financial risk profile, characterised by improved net worth, comfortable leverage and coverage indicators. The rating further considers the firm’s moderate order book, which provides visibility over the near to medium term, as well as adequate liquidity position supported by sufficient cash accruals and comfortable cash balances. However, the rating remains constrained by the firm’s moderate working capital operations, exposure to an intensely competitive construction industry, and the tender-based nature of operations.

About the Company

V B Prasada Reddy is a proprietorship concern incorporated in 1995, promoted by Mr. V B Prasada Reddy in Karnataka. Mr. V B Prasada Reddy is a qualified civil engineer who holds a B. Tech degree in Civil Engineering. The firm is a registered Class 1 Civil Licensed contractor with Karnataka PWD. Mr. Reddy has 26 years of experience in managing and executing civil contracts works exclusively related to state and central government departments. He is supported by Sai Kiran Reddy who is the project engineer for the firm.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of V B Prasada Reddy to arrive at the rating.

Key Rating Drivers

Strengths

Extensive experience of the firm:
VBPR is a class 1 licensed contractor with KPWD and have more than two decades of experience in civil construction segment mainly handling contracts for institutions like Karnataka Residential Education Institutions Society, Rajiv Gandhi University of Health Sciences, Rail India Technical and Economic Services Ltd etc. Acuité believes that being a class 1 licensed contractor and the experience will help the firm to be eligible for bidding for infrastructural works by different government agencies on medium term.

Improving Scale of operations:
The operating revenue of the firm increased to Rs.112.30 Cr. as on March 31, 2025 as against Rs.65.65 Cr. in the previous year. This growth was driven by a higher volume of orders and their timely execution. Furthermore, the firm has a moderate order book position with unexecuted order in hand to the tune of Rs.70.00 Cr., which is expected to be executed in next 3-4 months thereby providing moderate revenue visibility in the near. Additionally, the operating profit margin declined marginally to 7.17 percent in FY2025, compared to 7.88 percent in FY2024. The decline in operating margin in FY25 is primarily due to higher operating expenses incurred during the year. The Profit After Tax (PAT) margin improved and stood at 5.49 percent in FY2025, compared to 5.04 percent in the previous year.

Moderate financial risk profile:
The financial risk profile of the firm improved yet remained moderate marked by low networth, moderate gearing, and comfortable debt protection metrics. The tangible net worth of the firm stood at Rs. 14.47 Cr. as on March 31st, 2025 as against Rs.10.34 Cr. as on March 31st, 2024. The gearing level stood at 2.05 times as on 31 March 2025 as against 2.00 times as on 31 March 2024. The total debt of the firm stood at Rs. 29.72 Cr. as on March 31, 2025 as against Rs. 20.67 Cr. as on March 31, 2024. Total outside liabilities to tangible net worth (TOL/ TNW) stood at 3.38 times as on 31 March 2025 as against 3.41 times as on 31 March 2024. The debt protection metrics improved marginally yet remain moderate where interest coverage ratio (ICR) stood at 4.46 times in FY2025 as against 3.18 times in FY2024. Debt service coverage ratio (DSCR) stood at 2.02 times in FY2025 as against 1.38 times in FY2024. Net Cash accruals / total debt (NCA/TD) ratio stood at 0.23 times in FY2025 as against 0.20 times in FY2024.

Weaknesses

Moderate working capital operations:
The working capital operations of the VBPR are moderate in nature marked by GCA days of 96 days on March 31, 2025, as against 153 days on March 31, 2024. The high GCA days include the other current asset in form of security deposits and EMD. The inventory days stood at 12 days on March 31, 2025, as against 8 days on March 31, 2024. The debtor days stood at 8 days in FY2025 compared to 9 days in FY2024. The creditor days of the company stood at 86 days in FY2025 compared against 100 days in FY2024.

Inherent risk of tender based operations:
The revenue and profitability depends entirely on the ability to successfully bid for the tenders. Entities in this segment face intense competition, thus requiring them to bid aggressively to procure contracts; this restricts the operating margin to a moderate level. Also, given the cyclicality inherent in the construction industry, the ability to maintain profitability margin through operating efficiency becomes critical.

Inherent risk of capital withdrawal in a partnership firm
The firm is susceptible to the inherent risk of capital withdrawal given its constitution as a partnership. Any significant withdrawal from the partner’s capital will have a negative bearing on the financial risk profile of the firm.

Liquidity Position

Adequate

The firm’s liquidity position is adequate marked by generation of sufficient net cash accruals of Rs. 6.87 Cr. in FY2025 as against maturing debt obligations of Rs.2.41 Cr. in the same tenure. The cash and bank balances of the firm stood at Rs. 10.68 Cr. as on March 31, 2025. The current ratio stood at 0.93 times as on March 31, 2025, as compared to 1.04 times as on March 31, 2024.

Outlook: Not Applicable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	112.30	65.65
PAT	Rs. Cr.	6.17	3.31
PAT Margin	(%)	5.49	5.04
Total Debt/Tangible Net Worth	Times	2.05	2.00
PBDIT/Interest	Times	4.46	3.18

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 Dec 2025	Bank Guarantee (BLR)	Short Term	5.00	ACUITE A4 (Reaffirmed & Issuer not co-operating*)
	Proposed Bank Guarantee	Short Term	2.00	ACUITE A4 (Reaffirmed & Issuer not co-operating*)
	Secured Overdraft	Long Term	3.00	ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+)
	Proposed Secured Overdraft	Long Term	2.00	ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+)
17 Sep 2024	Bank Guarantee (BLR)	Short Term	5.00	ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
	Proposed Bank Guarantee	Short Term	2.00	ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
	Proposed Secured Overdraft	Long Term	2.00	ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-)
	Secured Overdraft	Long Term	3.00	ACUITE B+ (Downgraded & Issuer not co-operating* from ACUITE BB-)
20 Jun 2023	Bank Guarantee (BLR)	Short Term	5.00	ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
	Proposed Bank Guarantee	Short Term	2.00	ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
	Proposed Secured Overdraft	Long Term	2.00	ACUITE BB- (Reaffirmed & Issuer not co-operating*)
	Secured Overdraft	Long Term	3.00	ACUITE BB- (Reaffirmed & Issuer not co-operating*)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Canara Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE A4 \| Reaffirmed & Withdrawn
Not Applicable	Not avl. / Not appl.	Proposed Bank Guarantee	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.00	Simple	ACUITE Not Applicable \| Withdrawn
Not Applicable	Not avl. / Not appl.	Proposed Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.00	Simple	ACUITE Not Applicable \| Withdrawn
Canara Bank	Not avl. / Not appl.	Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	3.00	Simple	ACUITE B+ \| Upgraded & Withdrawn ( from ACUITE B )

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Sahil Sawant
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.

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