Globe Civil Projects Limited – Credit Rating Update – ‘Positive’ Outlook Upgrade After Successful IPO

Details of the Rating Action

Infomerics reviewed GCPL’s total bank facilities of ₹110 crore, comprising long-term and short-term borrowings.

The long-term facilities include OCC/ODBD of ₹10 crore and two cash credit limits of ₹6 crore and ₹10 crore. Short-term facilities include various bank guarantees (including proposed ones) and a letter of credit.

Key Reasons for the Outlook Revision

Infomerics Ratings cited the following factors behind the outlook revision:

1. Strengthened Capital Structure: The company’s financial profile improved following the successful mobilization of ₹119 crore through its IPO in July 2025.
2. Debt Reduction: Total debt is expected to decline to around ₹120 crore by FY26, compared to about ₹155 crore in FY25, leading to stronger debt protection metrics.

Financial and Operational Performance

GCPL’s financial performance during FY25 demonstrated consistent improvement across parameters:

• Revenue Growth: Total operating income rose to ₹325.99 crore, an 11% increase from ₹294.90 crore in FY24, supported by a strong order book and better project execution.
• Improved Margins: Operating profit margin expanded to 16.43% in FY25 from 15.10% in FY24, aided by efficient cost management and bulk procurement of key materials.
• Profitability: EBITDA increased by approximately 20% to ₹53.56 crore, while PAT rose by 57% to ₹24.05 crore.

Strong Order Book and Client Base

As of September 30, 2025, GCPL reported an outstanding order book of ₹1,001.28 crore, equivalent to 3.07 times its FY25 revenue, ensuring revenue visibility for the coming years. About ₹481 crore worth of projects are scheduled for execution in FY26 and ₹403 crore in FY27.
The company’s clients include reputed names such as CPWD, NBCC, Indian Railways, Delhi Public School (DPS), and the Haryana Cricket Association, highlighting its diversified project portfolio.

Experienced Management and Operational Track Record

Established in 2002, GCPL is promoted by Mr. Ved Prakash Khurana, who brings nearly 40 years of experience in the civil construction industry. Under his leadership, the company has successfully executed projects across India for clients including Delhi Metro Rail Corporation, AIIMS, IITs, and Indian Railways, supported by a skilled management team.

Capital Structure and Coverage Metrics

GCPL’s leverage position improved during FY25:

• Overall gearing declined to 1.49x as of March 31, 2025, from 1.99x a year earlier.
• Interest coverage ratio rose to 2.78x (from 2.01x), and DSCR improved to 1.42x (from 1.12x).

The capital structure is expected to strengthen further with IPO proceeds reducing debt dependence.

Key Rating Challenges

While GCPL’s outlook has improved, certain challenges remain:

• Working Capital Intensity: Operations remain working capital heavy, with average utilization of limits at around 92% and an elongated operating cycle of 131 days in FY25 (vs. 115 days in FY24).
• Competitive Industry Environment: The domestic construction sector is fragmented, exposing the company to input cost volatility in materials like steel and cement. GCPL mitigates this risk through escalation clauses in project contracts.

Liquidity Position

Liquidity is projected to remain adequate over FY2026–FY2028. Expected accruals of ₹36–50 crore are sufficient to cover debt repayments of ₹16 crore in FY26, ₹8 crore in FY27, and ₹3 crore in FY28.

The company’s current ratio stood at 1.28x as of March 31, 2024, and it maintained unencumbered cash and bank balances of ₹27.95 crore as of September 30, 2025. However, fund-based utilization remained high at around 91% during the past twelve months.

Globe Civil Projects Share Price Performance

On Thursday, Globe Civil Projects share price was trading in positive territory. As of 11:53 am IST the stock price was trading at ₹73.50 per share, up by 0.05%.