Acuite Ratings reaffirms ratings of Ashoka Buildconn at 'AA/A1+'

Ashoka Buildcon (ABL) said that Acuite Ratings & Research has removed the ratings of the company from 'Rating Watch' and reaffirmed the ratings at 'ACUITE AA' with 'Stable' outlook.

The agency has also affirmed the companys short-term rating at ACUITE A1+.

AcuitRatings had previously placed the companys rating on 'Rating Watch with Developing Implications' on account of impending asset monetisation transactions.

Acuite notes that ABL has completed the monetization of 5 BOTs (build-operate-transfer) and 5 HAMs (hybrid annuity model) resulting in total proceeds of Rs 2817 crore.

The proceeds have been utilized to provide an exit to SBI Macquarie, reduction in short term borrowings thereby strengthening the capital structure of the company, make payments to Viva Highways (VHL) to acquire stake in Jaora Nayagaon Toll Road Company (JNTCPL) and settle vendor payments to avail cash discounts. Hence, the rating has been removed from rating watch.

 

The remaining monetization of 6 HAM assets are expected to be completed by Q1 FY27 with an inflow of Rs 1100 crore. the timely completion of this transaction will remain key monitorable factor.

The rating reaffirmation reflects a steady scale of operations with comfortable order book albeit subdued operating performance.

The companys unexecuted order book remains robust at Rs.16,477 crore as of 06 February 2026, providing revenue visibility at 2.33x of FY25 revenue. The order book is well-diversified across roads, buildings, power and railways. Additionally, the company has established a subsidiary in Saudi Arabia to tap infrastructure opportunities in the Middle East.

The rating further factors in moderation in the companys financial risk profile due to decrease in debt protection metrics during FY25. The increase in debt has led to higher interest costs, while lower accruals have resulted in a decline in both interest coverage ratio (ICR) and debt service coverage ratio (DSCR).

Despite this moderation, the companys tangible net worth has increased, and gearing remained below unity in FY25. The working capital cycle remains intensive due to inherent nature of the business.

Ashoka Buildcon undertakes engineering, procurement and construction (EPC) contracts for the road, railways, buildings and power sector. The company is also the leading players in the BOT (build, own, transfer) segment and hybrid annuity model (HAM).

The scrip fell 1.82% to currently trade at Rs 137.75 on the BSE.

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