Hindustan Construction Company Limited — Credit Ratings, 09-04-2025: Credit Rating

Hindustan Construction Company Limited (HCC) has reported the following credit rating updates:

- **Long Term Bank Facilities**: ₹121.12 crore upgraded to CARE BBB-; Stable from CARE BB+; Positive.

- **Long Term / Short Term Bank Facilities**: ₹7,313.28 crore upgraded to CARE BBB-; Stable / CARE A3 from CARE BB+; Positive / CARE A4+.

- **Non-Convertible Debentures**: ₹753.00 crore upgraded to CARE BBB-; Stable from CARE BB+; Positive.

- **Optionally Fully Convertible Debentures**: ₹863.88 crore upgraded to CARE BBB-; Stable from CARE BB+; Positive.

The rating upgrades stem from several factors: an improved liquidity profile bolstered by raising approximately ₹950 crore through a rights issue and Qualified Institutional Placement (QIP) in FY25, enhancing working capital and debt servicing capabilities. The company's order book also remains strong at ₹9,758 crore as of December 31, 2024, providing significant revenue visibility for the ensuing years.

Despite the positive outlook, challenges persist, such as lingering high debtor days primarily from contested amounts and a competitive landscape that pressures margins. The company’s ability to successfully collect disputed receivables and manage its debt repayment obligations will be critical in sustaining its improved ratings and operational performance moving forward.

Investors may consider a **hold** strategy given the company's stabilization and potential growth trajectory amidst existing challenges.