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
Acuite has assigned its long-term rating of 'ACUITE BBB-' (read as ACUITE triple B minus) on Rs.10.30 Cr. bank facilities and short-term rating of 'ACUITE A3' (read as ACUITE A three) on the Rs.19.00 Cr. bank facilities of Y Meenakshi. The outlook is "Stable".
Rationale for rating The assigned rating considers the long-standing experience of the management and established track record of the company in the toll collection industry. The rating further considers the company’s above-average financial risk profile, characterized by a modest net worth base and comfortable debt protection metrics, supported by adequate liquidity and steady cash accruals. However, the rating is constrained by the low operating margins of the business owing to increased competition and significant performance deposit requirements. Further, the rating also considers the revenue vulnerability to traffic movements and renewal risk pertaining to the shorter period of contracts and availability of adequate and timely banking limits, particularly for furnishing security deposits and bank guarantees. The rating also takes into account the inherent risk of capital withdrawal in proprietorship concerns.
About the Company
Y Meenakshi is a sole proprietorship established in 2019 and based in Kurnool, Andhra Pradesh and operated by Yeluri Meenakshi is involved in toll collection operations and maintenance of toll plazas on contractual basis for National Highways Authority of India (NHAI)/ State Government authorities.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has considered standalone business and financial risk profile of Y Meenakshi to arrive at the rating.
Key Rating Drivers
Strengths
Longstanding experience of management in toll collection business The proprietor of the firm has more than a decade of experience in the toll collection business with Y Meenakshi as well as with related entities operating in the similar business. As of April 2026, the company is currently operating 23 toll plazas and has executed almost 36 contracts in FY2026. Acuité believes that the firm will benefit from its established position in toll collections business and its strategy of scaling up through successful bids.
Improvement in operating scale albeit thin profitability
The revenue of the firm improved to Rs. 225.80 Cr. in FY2026 (Prov) from Rs. 99.40 Cr. in FY2025 and Rs 143.55 Cr. in FY2024, driven by an increase in the number of operational toll plazas supported by improved traffic traction, despite the impact of the FASTag annual pass scheme implemented in August 2025 by NHAI for the private vehicles. Further, the operating margins of the company are majorly driven by tender-based nature of operations with increasing competition and the traffic density across the toll asset. Profitability continues to remain constrained by the tender-driven nature of operations and dependence on traffic flows. EBITDA margins improved to ~1.30% in FY2026 (Prov) from 0.38% in FY2025 while subdued at (0.04%) in FY2024, on account of venturing into profitable contracts. PAT improved to Rs. 2.87 Cr. in FY2026(Prov), translating to ~1.27% margin from Rs. 1.28 Cr. in FY2025. Going forward, the firm shall continue to focus on bidding for high value contracts which shall provide healthy revenues. Acuité believes that the firm’s expertise in identifying right tolls based on its extensive surveys and long-standing experience in the business is expected to help them in getting new tender allotments and get repeat/extension on existing contracts leading to sustainable growth in the business.
Above average financial risk profile The firm's financial risk profile is above average, supported by a modest net worth base, healthy leverage and comfortable debt protection metrics. The firm’s net worth improve to Rs.29.36 Cr. in FY2026(Prov) from Rs. 11.75 Cr. in FY2025 (Rs. 10.96 Cr. in FY2024) driven by profit accretion and classification of USL as Quasi equity. Total debt declined to Rs. 4.96 Cr. in FY2026(Prov), comprising of (Rs.4.25 Cr. of short-term borrowings and Rs 0.71 Cr. of long-term borrowings) from Rs. 12.81 Cr. in FY2025 and Rs. 16.20 Cr. in FY2024, indicating an improvement in leverage profile. Accordingly, gearing improved to 0.17x in FY2026(Prov) from 1.09x in FY2025 and 1.48x in FY2024, while TOL/TNW stood comfortable at 0.23x in FY2026(Prov) as against 1.42x in FY2025 and 1.66x in FY2024. Debt protection metrics, though moderated, remained comfortable with interest coverage ratio (ICR)at 4.50x in FY2026 (Prov) compared to 6.44x in FY2025 and 13.83x in FY2024, and debt service coverage ratio (DSCR) at 3.63x in FY2026(Prov) as against 5.05x in FY2025 and 9.94x in FY2024. Further, Debt/EBITDA improved to 1.04x in FY2026(Prov) from 7.01x in FY2025 and 9.49x in FY2024, supported by improved operating performance and lower debt levels. Acuite believes, the financial risk profile would remain above average given lower reliance on external debt.
Weaknesses
Large requirements for fund-based limits and bank guarantees (BG) may hinder revenue growth
The firm is required to furnish a performance security comprising 15 days’ remittance in the form of cash deposit and an additional 15 days’ remittance as bank guarantee for one-year contracts, while for shorter tenure (three-month) contracts, a cash deposit equivalent to 15 days’ remittance is required to be maintained with NHAI. This deposit is released upon completion of the contract tenure. Any significant increase in the number or size of toll contracts would necessitate a corresponding enhancement in working capital limits, and the ability to timely scale up such limits remains a key rating sensitivity.
Susceptibility of toll collection towards traffic movements along with contract renewal risk
Y Meenakshi is involved in toll collection on a short-term contractual basis for NHAI. The contracts are typically awarded for periods of 3 to 12 months, after which the firm has to bid afresh for the project. This creates a renewal risk for Y Meenakshi. Additionally, the firm operates entirely on a tender-based business model, making it vulnerable to strong competition from other bidders. The cash flows are solely dependent on toll collections which are subject to fluctuations in traffic volume, economic slowdown, threat from traffic movement to alternate routes and manpower mismanagement. Any events or regulatory changes impacting the traffic could pressure toll collections, thereby, affecting the firm’s cash flows.
Risk of capital withdrawal
The firm, being a sole proprietorship, remains exposed to the risk of capital withdrawal at the discretion of the proprietor, which could impact its capital structure and liquidity profile. However, the risk is partially mitigated by the management’s track record of profit retention and gradual accretion to net worth, along with the operational necessity of maintaining adequate capital for performance deposits and ongoing contracts. Further, the risk is moderated by the undertaking given by the proprietor to maintain minimum stipulated capital levels (MIB), subject to normal drawings required for business operations and personal maintenance, subject to prior approval from bank.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
• Sustained growth in operating revenues and profitability
• Improvement in operating margins above 2.0% on a sustained basis.
• Improvement in financial risk profile
Potential triggers (individual or collective) for a downward rating action:
• Decline in scale of operations with revenues falling below Rs.100-150 Cr. due to loss/non renewal of contracts with subdued profitability
• Increase in debt levels impacting the financial risk profile
Liquidity Position:
Adequate
The liquidity position of the firm is adequate marked by expected net cash accruals of Rs 2.89 Cr. In FY2026 (Prov) as against Rs 0.03 Cr. maturing debt obligations for the same period. The cash accruals of the firm are estimated to be in the range of Rs. 2-3 Cr. annually during FY26-28 against maturing repayment obligations of Rs. 0.03-0.05 Cr. for the same period. The average utilisation for the non-fund-based limits stood high at ~90% for past twelve months ended March 2026. Further, the firm had an unencumbered cash and bank balances of Rs. 0.60 Cr. as on March 31, 2026 (Prov) and the current ratio stood at 2.98 times as on March 31, 2026 (Prov).
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
225.80
99.40
PAT
Rs. Cr.
2.87
1.28
PAT Margin
(%)
1.27
1.29
Total Debt/Tangible Net Worth
Times
0.17
1.09
PBDIT/Interest
Times
4.50
6.44
Status of non-cooperation with previous CRA (if applicable)
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.
Contacts
List of instruments and names of regulators of the instruments
