Rationale

 The reaffirmation of the rating with continuation of Positive outlook for J. Kumar Infraprojects Limited (JKIL) reflects ICRA’s expectation that its credit profile will strengthen over the near to medium term, supported by a healthy order book (OB) position, stable operating profitability, and comfortable leverage metrics complemented by adequate liquidity. Its order book position stood at Rs. 19,212 crore, translating into a book-bill ratio of 3.37 times of FY2025 OI as on December 31, 2025, providing medium-term revenue visibility. Over the past three fiscals, the aggregate order inflow stood at over Rs. 19,000 crore. However, the same remained muted at Rs. 515 crore in YTD FY2026. The company is an L1 bidder in projects worth Rs. 1,728 crore as on date and a recovery in order inflow is expected, given a strong order pipeline in the metro rail, roads and urban infrastructure segments. In FY2026, the OI is anticipated to remain flat relative to FY2025 owing to slower-thanexpected execution in key projects, nevertheless, this is on account of reasons (weather-related disruptions, delays in the receipt of regulatory approvals etc.) not directly attributable to the company. Consequently, JKIL is expected to receive timely Extension of Time (EoTs) for projects where such issues persist, and ICRA doesn’t expect any adverse financial implications of the same. The operating profit margin has maintained a healthy trajectory of 14.3%-14.7% during the last 11 quarters, and the trend is likely to sustain over the medium term. The rating action favourably factors in the company’s comfortable financial profile, with low leverage (of less than 1.0 times as on March 31, 2025), adequate coverage metrics (interest cover of 5.3 times as on March 31, 2025), moderate working capital intensity coupled with adequate liquidity. It is expected to incur capital expenditure of ~Rs. 500 crore in FY2026 (~Rs. 400-450 crore already incurred in 9M FY2026) and ~Rs. 200 crore each in FY2027 and FY2028, which is anticipated to be partly funded though debt. Nevertheless, ICRA expects its credit metrics to remain comfortable with the interest cover likely to remain above 5.0 times and DSCR above 2.0 times over the medium term. The ratings note the extensive experience of the promoters, spanning over four decades in the civil construction segment and demonstrated capabilities in executing relatively complex infrastructure projects including underground metro projects at geographically diverse locations. The company has a fleet of well-maintained specialised equipment in its portfolio and a strong technical team, which supports its project execution capabilities. The rating is, however, constrained by the moderately concentrated order book position in terms of geography, segment and clients, although it has diversified compared to earlier levels over the last few years. Nevertheless, ~72% of the order book (as on September 30, 2025) is in the nascent stages of execution in terms of financial billing on account of milestone-linked payment cycles in some key projects, though, the execution in terms of physical progress remains relatively better. A strong track record of timely completion of projects and the slow execution being due to reasons beyond the company’s control mitigates the risk to an extent. The construction sector is exposed to stiff competition, along with volatility in input costs (steel, cement, etc.), which could exert pressure on profitability. The company is also exposed to sizeable contingent liabilities in the form of bank guarantees mainly for mobilisation advances, contractual performance and retention money. Any sizeable invocation of BGs would affect the company’s liquidity and financial risk profile. Nonetheless, ICRA draws comfort from JKIL’s execution track record and absence of any invocation of guarantees in the past.