Hindustan Construction Company Ltd Receives Rating Reaffirmation for Bank Facilities and Debentures

Hindustan Construction Company Ltd Receives Rating Reaffirmation for Bank Facilities and Debentures​

Hindustan Construction Company Ltd (HCC) received the reaffirmation of ratings for its bank facilities, Non-convertible Debentures, and Optionally Convertible Debentures from CARE Ratings Limited. The rating review factors in the company's financial risk profile improvement, supported by the fructification of its fundraising plans.

The ratings reaffirmation covered several key financial instruments. The amounts for the rated facilities and instruments are detailed below:


The rationale for the rating reaffirmation points to the continued improvement in HCC's financial risk profile. This is supported by the capital raised through a Rights Issue of ₹1,000 crore in December 2025 and the recovery of arbitration proceeds amounting to ₹720 crore via the issuance of arbitration bank guarantees in FY26. These funds were utilized for working capital requirements and the repayment or prepayment of debt.

Debt levels have shown a reduction, falling from ₹3,279 crore as on March 31, 2025, to ₹2,016 crore as on March 31, 2026.

Key Drivers Impacting Rating​

The ratings also factor in the reduction of the corporate guarantee extended by HCC to its Special Purpose Vehicle (SPV), Prolific Resolution Private Limited (PRPL). This guarantee was reduced from 100% of the carved-out debt to 20% of that value. Consequently, HCC's exposure to PRPL's debt is limited to ₹571 crore, which materially lowers HCC's contingent liability risk. Debt repayment in PRPL is set to commence from September 2026.

For business visibility, the order book of HCC as on December 31, 2025, stood at ₹13,148 crore. CARE Ratings Limited anticipates that these order book additions, along with the timely conversion of projects where HCC is the lowest bidder (L1), will support medium-term business growth.

In terms of financial performance, total operating income (TOI) moderated in FY25 to ₹4,526 crore (compared to ₹4,888 crore in FY24). In 9MFY26, TOI was ₹2,857 crore (compared to ₹3,362 crore in 9MFY25). Despite this revenue moderation, the profit before interest, lease rentals, depreciation, and taxation (PBILDT) margins improved to 13.43% in FY25 (from 10.16% in FY24).

Financial Position and Challenges​

HCC has reported significant debt reduction over the last two years ending FY26. The company raised capital totaling ₹1,950 through rights issues and QIPs, which, along with proceeds from arbitration claims and asset monetization, funded debt repayment and working capital. In FY26, the company repaid ₹1,537 crore of debt obligations (principal and yield), against a scheduled repayment obligation of ₹935 crore.

Despite these improvements, the rating considers that the liquidity profile is constrained by slower-than-envisaged recovery from disputed debtors and sizeable arbitration debtors in the books, leading to elevated gross current asset days. Receivables and gross current asset (GCA) days were recorded at 389 days and 448 days, respectively, in FY25.

The company's total order book position remained satisfactory at ₹13,148 crore as on December 31, 2025, with 65% of orders pertaining to the Transportation Segment, followed by Hydro (19%), Water works (12%), and Nuclear and Special segment (4%).

Historical Financial Data​

The following table presents brief financial figures for the company:


*Note: PBILDT stands for Profit before interest, lease rentals, depreciation, and tax. #Interest coverage is adjusted for actual cash interest paid.

HCC Stock Price Movement​

Shares of Hindustan Construction Company Limited today slipped 1.31% on the slide to settle at ₹16.52 in post-market trading. The stock saw significant activity, with a total traded volume of 20.11 million shares recorded today.

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