Vikran Engineering IPO

It is a fast-growing EPC company, with revenue from operations increasing at a 32.17% CAGR from ₹524 crore in FY23 to ₹916 crore in FY25, and profit grew at 34.78% CAGR from ₹43 crore to ₹78 crore, over the same period.

It operates an asset-light model, primarily leasing equipment to reduce fixed costs and enable quick scaling. This approach is efficient, reflected in a fixed asset turnover ratio of 101.27 in FY25 (generating ₹101.27 in revenue for every ₹1 invested in fixed assets).

The company has a strong Order Book of ₹2,044 crore in FY25, showing plenty of future work. Its Order Book to Revenue ratio of 223% means it has secured projects worth over twice its yearly revenue, indicating solid income visibility.

The company generates the highest EBITDA margins among listed peers. In FY25, its EBITDA margin stood at 17.50%, which is higher than even the largest listed peers like Kalpataru Projects and KEC International.

It has a strong pan-India presence, executing projects in 16 states and operating 190 active sites and store locations as of June 30, 2025. This, combined with a centralized procurement system and over 3,500 suppliers, ensures efficient project delivery nationwide.

Its strong in-house technical and engineering teams provide end-to-end EPC services, from design to commissioning. Holding ISO 9001:2015, 14001:2015, and 45001:2018 certifications, it ensures high quality, efficient project execution, and adherence to stringent standards.

Its operations are highly working capital intensive, with working capital representing 74.27% of revenue in FY25. It also reported negative net cash flows from operations of ₹129.08 crore in FY25, which could strain liquidity and hinder growth.

It heavily relies on a few clients; its top customer generated 28.79% of revenue in FY25, the top five customers contributed 69.48%, while the top ten formed 88.08%. Losing these key relationships or payment delays could significantly impact its revenue and financial stability.

The company's infrastructure projects are heavily tied to government policies, political stability, and India's economic conditions. With 61.73% of FY25 revenue from government entities, adverse changes, especially in the power transmission and distribution sector, could seriously affect its business and cash flows.

Trade receivables are substantial, representing 85.68% of total assets in FY25, with 190 trade receivable days. An ongoing litigation for ₹29.29 crore highlights collection risks, where failure to manage these effectively could adversely affect cash flow and liquidity.

The company's borrowings increased from ₹155 crore in FY23 to ₹273 crore in FY25, at a CAGR of 32.7%. Despite this, it plans to use IPO funds for working capital and general company needs, not to pay back these growing debts.

The company holds a market share of less than 0.5% in the infrastructure EPC industry as of Fiscal 2025. This explicitly states its position as a relatively minor participant in the overall market, despite its strong revenue growth.