Swastika Infra IPO

Strengths · 7

• 01Sales grew strongly over the years shown, from Rs 59.54 crore in FY2022 to Rs 154.32 crore in FY2023 and Rs 211.33 crore in FY2024.
• 02Profit grew over the same period, from Rs 2.95 crore in FY2022 to Rs 10.25 crore in FY2023 and Rs 13.98 crore in FY2024.
• 03Return ratios on the data available are good, with RoNW of 32.84% and RoCE of 25.15%.
• 04Net worth grew from Rs 20.57 crore in FY2022 to Rs 55.52 crore as on 30 September 2024.
• 05It offers turnkey capability across cabling, substations, electrification and street lighting, so it can bid for complete packages rather than parts of a job.
• 06Rural and urban electrification work is backed by government schemes, which provides a steady pipeline of tenders.
• 07Gas insulated substation work is more technical than ordinary cabling and fewer contractors can execute it.

Risks · 8

• 01The financial data is two years out of date. The most recent figures available are a half year ending 30 September 2024, for an issue opening in September 2026, and there is no FY2025 or FY2026 data at all. This needs to be read from the RHP before relying on any of it.
• 02The P/E and EPS are not stated, and neither the EBITDA nor the total borrowing rows are present in the available data, so margin and leverage cannot be assessed from here.
• 03The promoter details and the pre and post issue promoter holding are not stated either, so the extent of dilution is not clear.
• 04Rs 145 crore of the Rs 160.87 crore issue goes into working capital. EPC work blocks large amounts of cash in unbilled work and retention money.
• 05The company is young, having been incorporated only in August 2019.
• 06Most customers are state electricity utilities and government bodies, which pay slowly and award work through price-driven tenders.
• 07A part of the revenue comes from trading electrical products, which earns less than the project work.
• 08This is a fresh issue combined with an offer for sale, so a part of the money goes to the selling shareholders and not to the company.

Swastika Infra Limited was started in August 2019. It is an engineering, procurement and construction company, usually called an EPC company, working on power distribution infrastructure. It also sells electrical products.

Its EPC work is turnkey, meaning it handles the whole job from buying the material through to erection, installation, testing and commissioning. The work covers four main areas. Underground cabling involves laying and commissioning high and low voltage power cables, which cuts power losses compared with overhead lines. Substation construction covers both gas insulated and air insulated substations, including installing power transformers, circuit breakers and ring main units. Rural and urban electrification projects extend electricity to underserved areas through distribution networks, service connections and feeder lines, generally under government schemes. It also installs street lighting systems.

Alongside the project work it trades in electrical products, buying and selling power cables and other electrical items. The EPC work is the main business and the trading is secondary.

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