AVP Infracon Limited — Credit Ratings, 29-01-2025: Credit Rating

AVP Infracon Limited has secured a long-term credit rating of ACUITE BBB with a stable outlook and a short-term rating of ACUITE A3+ on bank facilities totaling ₹107.00 Cr. This reflects the company's experienced management and strong operational track record, bolstered by a healthy order book and profitability margins.

In FY2024, the group's revenue increased by 40.03%, reaching ₹161.01 Cr compared to ₹114.98 Cr in FY2023. As of H1FY2025, they reported ₹109.22 Cr, a notable rise from ₹66.98 Cr in H1FY2024, indicating robust demand and operational efficiency. Profit After Tax (PAT) showed significant improvement, with a growth to ₹18.67 Cr from ₹11.52 Cr in the prior year, resulting in a PAT margin of 11.59%.

Operational costs have expanded due to the working capital-intensive nature of the business—the gross current asset days rose to 400 from 341. However, the financial profile remains solid, with a net worth increase from ₹42.37 Cr to ₹110.46 Cr, reflecting positive cash flow dynamics.

The outlook for AVP is stable, supported by a strong order book, but it faces challenges from high geographical concentration and the competitive nature of the construction industry. Given these factors, a hold position may be prudent, monitoring for developments in order execution and revenue consistency.