CARE Ratings Limited has announced the downgrade of credit ratings for Dhruv Consultancy Services Limited (DCSL), an infrastructure consultancy firm, following a comprehensive annual review that revealed significant operational and financial challenges during the nine months ended December 31, 2025.

Rating Downgrades Across All Facilities

The credit rating agency has revised ratings across all bank facilities, reflecting deteriorated financial performance and operational metrics. The downgrades encompass facilities totaling ₹39.50 crore.

Significant Revenue Decline and Operating Losses

The primary driver behind the rating downgrades was DCSL's substantial decline in operational performance during 9MFY26. The company's total operating income recorded a year-on-year decline of 51.62%, reducing to ₹36.52 crore from ₹75.49 crore in 9MFY25.

This decline was primarily attributed to revenue reversals arising from contractual and scope-related adjustments, including replacement of personnel, remuneration linked to attendance thresholds, and descoping of activities. The company also faced cost escalations, execution-related factors such as increases in estimated project costs, and extensions in project timelines.

During Q3FY26, the company reported negative revenue of ₹5.69 crore, with operating and net losses of ₹29.20 crore and ₹30.97 crore respectively. The revenue adjustments included a decrease in revenue recognition by ₹24.97 crore and a corresponding decrease in unbilled revenue of ₹6.13 crore.

Capital Structure and Liquidity Concerns

The operating losses significantly impacted DCSL's capital structure. Tangible net worth declined to ₹71.86 crore as on December 31, 2025, compared with ₹103.38 crore as on March 31, 2025. This resulted in moderation of the capital structure, with overall gearing reaching 0.33x as on December 31, 2025, from 0.17x as on March 31, 2025.

The company's liquidity position remained stretched, characterized by modest unencumbered cash and bank balances of ₹0.62 crore as of December 31, 2025, compared to ₹6.92 crore as of March 31, 2025. The average maximum utilization of fund-based limits stood at 80.43% in the last 12 months ended October 2025.

Order Book Position and Business Strengths

Despite the operational challenges, DCSL maintains several business strengths that support its credit profile. The company's order book position stood at ₹239.55 crore as on September 30, 2025, representing 2.35x of net sales for FY25, providing medium-term revenue visibility.

The company benefits from experienced promoters, with Chief Promoter Pandurang Dandawate having over three decades of industry experience and Managing Director Tanvi Auti bringing over a decade of expertise. DCSL has completed consultancy services for over 175 projects across 21 states in India.

Rating Outlook and Future Prospects

CARE Ratings has maintained a "Stable" outlook, reflecting expectations of continued support from experienced promoters and stable order book generation. The rating agency expects the company to maintain sustainable scale of operations with a comfortable financial risk profile.

Positive rating factors include potential significant increases in unexecuted order book position above 4 times of envisaged total operating income for FY26, improvement in scale of operations with gross cash accruals exceeding ₹15 crore, and better collection periods. However, the agency cautioned about risks from deteriorating profit margins and elongation in operating cycles that could pressure liquidity parameters.

The company operates in the fragmented infrastructure consultancy industry, providing services including detailed project reports, project management consultancy, and technical audits primarily to government bodies, which account for around 95% of revenue.

Source: None/Company/INE506Z01015/4f4802aa-8149-4e03-9911-f89f0a876052.pdf

Dhruv Consultancy Services Limited has secured a significant Project Management Consultancy (PMC) contract from U.P. State Bridge Corporation Ltd., Kanpur, marking another milestone in the company's infrastructure consulting portfolio. The Letter of Acceptance was issued on February 21, 2026, and received by the company on February 24, 2026.

Contract Details

The comprehensive contract encompasses construction supervision services for critical infrastructure development in Kanpur district. The project involves two key components: construction supervision work in district Kanpur (UP) and Project Management Consultancy for the construction supervision of Ganga River Bridge and approach road adjoining Kanpur Nagar to Shuklaganj-Unnao.

Project Scope and Timeline

The contract specifically covers Project Management Consultancy services for construction supervision of the Ganga River Bridge and its connecting approach road infrastructure. This strategic project will enhance connectivity between Kanpur Nagar and Shuklaganj-Unnao, contributing to improved transportation infrastructure in the region.

The company is required to furnish performance security within 10 days of the LOA issuance, demonstrating the project's immediate commencement requirements. The 24-month project timeline indicates a substantial infrastructure development initiative that will require comprehensive project management expertise.

Regulatory Compliance

Dhruv Consultancy Services Limited has disclosed this contract award in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that neither promoter/promoter group/group companies have any interest in the awarding entity, and the contract does not fall within related party transactions.

Strategic Significance

This contract award reinforces the company's position in the infrastructure consulting sector, particularly in bridge construction supervision and project management. The involvement in a major river bridge project demonstrates the company's technical capabilities and experience in handling complex infrastructure assignments. The contract value of Rs 1,68,81,984 represents a significant addition to the company's order book, supporting its business growth trajectory in the infrastructure development sector.