Swastika Infra IPO

Swastika Infra Limited has built a 15-year track record in power distribution infrastructure, mainly serving state government electricity utilities. During this period, the company has laid 18,579.47 kilometres of power lines and completed 36 projects worth ₹764.67 crore across six states. A large part of its contracts is funded through central government schemes or multilateral agencies such as the World Bank. This can provide greater payment security and help support cash flows while projects are being executed.

The company also has a growing unexecuted order book, which increased from ₹391.39 crore in FY24 to ₹916.55 crore as of July 31, 2026. This provides visibility for future revenue over the coming years. Its order book-to-revenue ratio stood at 1.41 times in FY26, while its recent expansion into transmission lines and solar park evacuation projects is opening up additional areas for growth. The company recently secured orders worth ₹170.51 crore from RRVPNL and ₹158.12 crore from RSDCL, helping broaden its revenue base beyond traditional power distribution projects.

Swastika Infra has also grown its financial scale while improving profitability over the last three financial years. Revenue from operations increased at a 55.01% CAGR to ₹503.57 crore in FY26, while net profit grew at a 72.13% CAGR to ₹41.43 crore. In FY26, the company reported a Return on Net Worth of 35.44% and Return on Capital Employed of 25.76%. These figures show that the business generated healthy returns relative to the capital invested in it.

The company follows an asset-light model by leasing heavy machinery and using third-party contractors for on-site execution, while keeping material procurement and engineering supervision in-house. This reduces the need for large investments in machinery and helps keep fixed overheads lower. The model has also supported high fixed asset turnover, which stood at 78.90 times in FY24, 153.67 times in FY25, and 70.72 times in FY26.

Another support for the business is its experienced promoter group, which has more than 50 years of combined experience in power infrastructure execution and management. Promoters Vinay Gupta, Babulal Gupta, Ruchira Gupta, Manoj Modi, Biren Parnami, and Vatsalya Gupta are involved in the company’s day-to-day operations and strategic planning. They are supported by an in-house team of 65 qualified engineers and technicians, giving the company the technical resources needed to handle project requirements across different regions.

Swastika Infra Limited depends heavily on state government electricity distribution utilities, which contributed 96.87% of its operating revenue in FY26. Its top five clients also accounted for 96.87% of revenue, while all of its unexecuted order book as of July 31, 2026, came from government projects. This concentration means that changes in state budgets, policy decisions, or delays in payments could affect project timelines, revenue generation, and the company’s overall operations.

The company also faces project execution and customer concentration risks. Its two largest ongoing projects made up 41.83% of the ₹916.55 crore order book as of July 31, 2026. In earlier financial years, several projects faced delays of around 6 to 12 months because of issues such as delayed site handovers, pending drawing approvals, or slower payments from clients. If such delays continue, they could push up project costs, put pressure on operating margins, and potentially lead to liquidated damages, which are financial penalties for failing to complete a project within the agreed timeline.

Swastika Infra’s business also requires substantial working capital. Net working capital reached ₹255.63 crore in FY26, equal to 50.76% of operating revenue, mainly because of retention money and margin deposits linked to bank guarantees. As the company takes on more projects, more cash can remain tied up in day-to-day operations. Operating cash flow was negative at ₹9.65 crore in FY26 and ₹76.54 crore in FY25. If the company continues to struggle with generating positive operating cash flows, it could face greater liquidity pressure and may need to rely more on debt financing.

As of March 31, 2026, the company had contingent liabilities of ₹272.68 crore, most of which were related to bank guarantees. This amount was nearly seven times its net profit and about 164 times its cash balance. The company is also involved in pending civil writ petitions against state utilities relating to price variation recoveries and disputed audit objections. If bank guarantees are invoked or the legal matters are decided adversely, the resulting cash outflows could put additional pressure on finances and potentially affect relationships with clients.

Swastika Infra relies on third-party subcontractors for on-site project execution and domestic suppliers for raw materials, with no long-term contracts in place with these suppliers. This exposes the company to risks from changes in input prices, supply disruptions, and quality issues. Its total borrowings stood at ₹128.34 crore as of July 31, 2026, with loans secured through personal guarantees and mortgages provided by promoters. Any major disruption in supplier or subcontractor arrangements, or a breach of borrowing conditions, could affect project execution and make it harder for the company to access additional credit in the future.