Rationale

 The ratings reaffirmation for Secon Private Limited (SPL) factors in its healthy unexecuted order book position of Rs. 377 crore [viz. 3.6 times based on its operating income (OI) of FY2025] as on January 31, 2026, which provides medium‑term revenue visibility. The ratings derive strength from SPL’s strong financial risk profile, characterised by low leverage, a strong liquidity position and sustained healthy profitability, resulting in robust debt protection metrics. Although the operating profit margin moderated to 18% in FY2025 from 20% in the previous year, due to slower execution of certain key orders, it remains comfortable and is expected to be sustained at the current levels. This is supported by the company’s in‑house survey and investigation capabilities, which enable faster turnaround times and greater control over quality and costs. The ratings factor in SPL’s established track record in engineering and project consultancy, along with its diversified presence across multiple segments, including oil and gas pipelines, irrigation, highways, water supply and land records survey. The ratings, however, remain constrained by SPL’s high working capital intensity owing to the elongated receivable position. Despite YoY improvement, the debtor days remained on a higher side (205 as on March 31, 2025, Vs. FY2024: 231 days) on account of a large share of long-duration design and survey projects, along with dominance of Government entities in its client base, which have long payment approval cycles. Any write-off of receivables, which impacts its profitability and net worth position, would remain a key monitorable. The ratings are constrained by the high sectoral concentration risk, with the pipeline division accounting for 41% of revenues in FY2025 and 31% of the unexecuted order book as on January 31, 2026. While SPL enjoys a strong market position in certain niche segments, its scale of operations remains modest against other established and much larger peers. The company’s revenues remained range-bound within Rs. 80-110 crore over the past five years, indicating stiff competition, which may result in sustained pricing pressure. It does not have any material organic/inorganic growth plans that may constrain its upside potential. The Stable outlook on the long-term rating reflects ICRA’s expectation that despite modest revenue growth, the company will sustain its healthy financial profile, with debt-free position and strong liquidity.