| Extensive Experience of Promoters:
SIPL incorporated in 2010, is engaged in civil construction activities including roads, bridges, ROBs, and buildings. The company benefits from the promoters’ extensive experience of over a decade in the construction industry, which has enabled SIPL to establish strong relationships with Govt clients such as NHAI, MPRDC, NHIDCL etc. SIPL’s operations are geographically diversified across states like Madhya Pradesh, Maharashtra, Haryana, and Manipur. Acuite believes that the experience of the promoters in the construction business will likely benefit SIPL in its operational performance going forward.
Scale of Operations:
SIPL’s operating performance in FY25 was reflected by decline in revenue to Rs.136.46 crore from Rs.203.99 crore in FY24, primarily due to delays in project execution following prolonged government approval processes for issuing Letters of Acceptance (LOAs). Despite securing L1 status in March 2024, the company began receiving LOAs only from June 2024, deferring project commencement and revenue realization. However, operating profitability improved, with EBITDA margin rising to 19.53% (FY25) from 15.29% (FY24), supported by a significant reduction in job work expenditure as SIPL transitioned to independent EPC execution. PAT margin has also marginally increased to 8.49% in FY 25 against 8.29% in FY 24, though depreciation and interest costs increased in FY 25 owing to asset additions of around Rs.35 crore in Q4 FY25 through equipment financing. The company currently owns 252 units of heavy machinery and other related equipment and further plans to add 150 more units by FY27, which may keep depreciation and interest costs elevated and profitability slightly volatile. Revenue visibility remains healthy, backed by an outstanding order book of Rs.873 crore as of October 2025 (OB/OI ratio of 6.41x) and healthy execution in FY26, with Rs.130 crore booked during the first seven months. Acuité believes SIPL’s operating performance will improve over the medium term, supported by its unexecuted order book and visibility of revenue traction during 7MFY26, though higher depreciation and interest costs could marginally constrain margins.
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| Intensive Working Capital Management:
SIPL’s working capital management remained intensive in FY25, with GCA days increasing sharply to 232 days from 106 days in FY24, primarily due to elongated debtor days, inventory days, and higher other current assets. Debtor days rose to 42 days in FY25 (FY24: 3 days) driven by high year-end billing, though payments are generally received within 10 days of invoicing. Inventory days increased to 42 days in FY 25 (FY24: 1 day) owing to raw material purchases at year-end and WIPs. Other current assets expanded to Rs.59.52 crore in FY25 from Rs.41.60 crore in FY24, mainly on account of retention money and EMD deposits, with 5– 10% typically retained until project completion. Meanwhile, creditor days rose to 120 days (FY24: 112 days), indicating the company’s ability to stretch supplier payments. Acuité believes the working capital cycle can improve in the medium term through constant monitoring of collections and inventory management.
Moderate Financial Risk profile:
SIPL’s financial risk profile improved in FY25 with tangible net worth rising to Rs.60.68 crore from Rs.34.23 crore in FY24, supported by a quasi-equity infusion of Rs.14.87 crore and healthy internal accruals. Total borrowings increased to Rs.72.94 crore from Rs.40.59 crore in FY24 due to equipment financing; however, gearing remained stable at 1.20 times (1.19 times in FY24). Debt protection metrics were stable, with Interest Coverage Ratio at 5.42 times and DSCR at 1.60 times in FY25. TOL/TNW improved to 1.92 times in FY 25 from 2.54 times in FY 24, while Debt/EBITDA and NCA/TD stood at 2.69 times and 0.25 times respectively in FY25 compared to 1.29 times and 0.56 times in FY24. Acuité believes the financial risk profile will remain moderate over the medium term, given the likelihood of additional long-term borrowings for planned equipment purchases.
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