India Ratings Assigns IND BBB-/Stable Rating to Desco Infratech Ltd’s Bank Loan Facilities

India Ratings Assigns IND BBB-/Stable Rating to Desco Infratech Ltd’s Bank Loan Facilities​

India Ratings and Research (Ind-Ra) has assigned a credit rating of IND BBB-/Stable/IND A3 to the bank loan facilities of Desco Infratech Limited (DIL). The assignment relates to an instrument valued at INR 110 million.

The rating reflects DIL’s experienced promoters, established client relationships, and revenue improvement in FY26, supported by a robust and diversified order book. Ind-Ra expects the company’s operating performance to improve in the near to medium term, driven by the execution of existing projects and anticipated new orders.

Financial Health and Rating Metrics​

The rating action was based on a standalone view of DIL. The assessment highlighted several key strengths, including an experienced promoter group with a long track record and established relationships with reputed counterparties such as Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL).

However, the rating is constrained by risks related to project execution due to external factors, along with segment and customer concentration risks.

Key financial indicators for Desco Infratech Ltd across FY26 and FY25 are detailed below:


The company’s EBITDA increased significantly to INR 235.68 million in FY26, up from INR 133.44 million in FY25, driven by strong revenue growth and improved scale of operations. The EBITDA margins moderated to 19.87% in FY26, compared to 22.45% in FY25, which Ind-Ra noted was due to the contribution from lower margin EPC projects in power and renewables alongside core CGD projects.

Business Performance and Risks​

As of March 2026, DIL’s order book stood at INR 3,397.16 million, providing revenue visibility equivalent to about 2.86 times FY26 revenue. In FY26, the company generated revenues of INR 1,186.13 million in the CGD and power segments, which contributed 57% and 29% of the total revenue, respectively.

The company’s five top customers accounted for 71% of its business in FY26, including Sun Drops Energia Limited (about 33%), BPCL (about 18%), and ATGL (about 12%). While diversification into the power segment is underway, Ind-Ra identified this high dependence on the CGD sector as a concentration risk.

From a financial perspective, DIL’s net financial leverage (adjusted net debt/operating EBITDA) was 0.57x in FY26, compared to negative 1.48x in FY25. Gross interest coverage improved to 15.35x in FY26 from 11.18x in FY25 due to the increase in EBITDA.

Liquidity and Facilities​

During the 12 months ended March 2026, DIL’s average month end utilisation of fund-based and non-fund-based limits was reported at 89.13% and 66.52%, respectively. The company plans to enhance its working capital limits to meet additional requirements.

DIL relies on banks and financial institutions for its funding needs, with scheduled debt repayments set at INR 22.36 million in FY27 and INR 11.23 million in FY28, which management expects to be met through internal accruals.

Details regarding the facilities obtained from Yes Bank Ltd are as follows:


Ind-Ra specified that the timely conversion of projects into revenue and sustained credit metrics will be positive for the ratings, while a decline in scale leading to net leverage exceeding 2.5x or deterioration in liquidity would be negative.

Stock Price Movement​

Desco Infratech Ltd shares settled at ₹212.00, ticking up 0.95% at the close of trading today. The stock moved throughout the session between a low of ₹205.05 and an intraday high of ₹216.95.