Vishnu Prakash R Punglia Limited (VPRPL) has had its credit ratings revised by CARE Ratings Limited. The long-term bank facilities amounting to ₹200.00 crore have been downgraded from CARE BBB; Negative to CARE BBB-; Stable. Additionally, the long-term/short-term bank facilities of ₹760.00 crore have been downgraded to CARE BBB-; Stable / CARE A3, with the long-term rating revised from CARE BBB; Outlook Negative and the short-term rating reaffirmed.

The rating revision is attributed to the continued high working capital intensity in the company's operations during H1FY26, primarily due to elongated collection periods and inventory holding caused by delays in work certification and payment releases from water supply projects. The revision also considers the significant dilution of promoters' stake and pledge of shareholding, although the funds raised have been used to support operations, reduce external debt, and improve liquidity.

Key strengths supporting the ratings include a healthy orderbook with geographical and segmental diversification, extensive promoter experience, and a proven track record in water supply projects with low counterparty risk. The company has also seen a reduction in external debt due to promoter funding, leading to a moderate capital structure. However, the ratings are constrained by the company's presence in a competitive construction industry and execution risks associated with nascent or slow-moving projects.

The outlook has been revised to Stable, factoring in the expected sustenance in the scale of operations backed by a healthy order book and a stable capital structure. CARE Ratings anticipates continued promoter support to ease working capital intensity. The company has an outstanding order book of ₹5000 crore as of September 30, 2025, providing healthy revenue visibility.