A2ZINFRA - A2Z Infra Engg.

📊 NSE: A2ZINFRA 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/13/2025 17:41

💰 Financial Performance

Revenue Growth by Segment

Total operating income for FY25 was INR 336.27 Cr, a 13.44% decrease from INR 388.49 Cr in FY24. The Engineering Services (ES) segment experienced a sharp 43.55% decline to INR 48.55 Cr. The Facility Management Services (FMS) business saw a marginal decline of 1.95%, while the Municipal Solid Waste (MSW) segment revenue decreased by 9.81% YoY.

Geographic Revenue Split

The company operates across India and has a presence in overseas markets to hedge against local business environment risks; however, the specific percentage split between domestic and international regions is not disclosed in available documents.

Profitability Margins

The Net Profit Ratio improved to 0.31% in FY25 from -1.89% in FY24, driven by a shift from a net loss of INR 7.36 Cr to a net profit of INR 1.03 Cr (a 114% improvement). Return on Capital Employed (ROCE) increased to 0.15% from 0.01% YoY. However, the company continues to face high accumulated losses of INR 1,074.53 Cr as of September 2025.

EBITDA Margin

Operating EBITDA (before other income) turned positive at INR 8.65 Cr in FY25 compared to a loss of INR 54.37 Cr in FY24. This improvement was driven by a 72.82% reduction in other expenses and rationalization of direct costs, leading to a 162% increase in PBT before exceptional items.

Capital Expenditure

The company reported capital assets written off for INR 40.75 Cr during FY25. Specific planned capital expenditure for future periods is not disclosed in available documents.

Credit Rating & Borrowing

The company maintains a credit rating of 'CARE D' (Default) for both long-term bank facilities (INR 240.97 Cr) and short-term bank facilities (INR 377.30 Cr). This rating reflects ongoing delays in debt servicing and poor liquidity.

⚙️ Operational Drivers

Raw Materials

Raw materials primarily include components for EPC services in power transmission and distribution, such as conductors, towers, and hardware. Cost of materials consumed was INR 35.70 Cr for the six months ended September 30, 2025, representing approximately 46.8% of total revenue for that period.

Capacity Expansion

The company focuses on Engineering, Procurement, and Construction (EPC) services and Facility Management. Specific physical capacity metrics (MT/MW) or planned expansion timelines are not disclosed in available documents.

Raw Material Costs

Raw material costs were rationalized in FY25 to improve profitability. For the half-year ended September 2025, material costs stood at INR 35.70 Cr compared to INR 21.66 Cr in the previous year's corresponding period, reflecting changes in project execution scales.

Manufacturing Efficiency

The company is focusing on rationalizing employee benefit expenses, which stood at INR 1.60 Cr for the half-year ended September 2025, and reducing other operational expenses by 72.82% to improve EBITDA.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through a one-time settlement (OTS) strategy with banks to reduce debt, which resulted in a gain of INR 93.72 Cr in FY25. The company is also focusing on diversifying into professional Facility Management Services (FMS) for railways and airports and expanding its EPC presence in the power transmission and distribution sector.

Products & Services

Engineering, Procurement and Construction (EPC) services for power transmission and distribution, Integrated Facility Management Services (FMS), and Municipal Solid Waste (MSW) management.

Brand Portfolio

A2Z Infra, A2Z Group.

New Products/Services

The company is targeting opportunities in Integrated Facility Management Services for government-controlled infrastructure like railways and airports.

Market Expansion

The company aims to geographically diversify project presence within India and overseas to hedge against local business environment risks.

Strategic Alliances

Strategic partnerships are utilized to share financial and economic risks on large-scale projects.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward professional Integrated Facility Management Services (FMS) and increased government involvement in railways and airports. However, repeated failures in nursing State Electricity Boards (SEBs) to health pose a threat to power distribution infrastructure investments.

Competitive Landscape

The company faces intense competition from professional FMS players and technology-driven firms, as well as threats from the stressed financial health of telecom and power sector clients.

Competitive Moat

The company's moat is based on a 20+ year track record, a diversified business portfolio, and experience with large-scale government clients. Sustainability is challenged by a stressed balance sheet and 'Default' credit status.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and central bank policy interest rates, which directly impact the cost of capital and project viability.

Consumer Behavior

Increased demand for professional and integrated facility management in public infrastructure is a key trend affecting service demand.

Geopolitical Risks

Geopolitical risks are managed through geographical diversification of projects to hedge against localized business environment disruptions.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, SEBI Listing Regulations 2015, and sector-specific norms for power transmission and civil construction.

Environmental Compliance

The company operates in the Municipal Solid Waste (MSW) segment, which is subject to environmental regulations, but specific ESG compliance costs are not disclosed.

Taxation Policy Impact

The company received an order from the Additional Commissioner (CGST & C. Ex.), Siliguri, demanding tax of INR 3.63 Cr and an equal penalty of INR 3.63 Cr (Total INR 7.26 Cr).

Legal Contingencies

The company is contesting a GST demand and penalty totaling INR 7.26 Cr. Additionally, certain lenders have filed applications under the Insolvency and Bankruptcy Code (IBC) against the company due to debt defaults.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the company's ability to continue as a 'going concern' given accumulated losses of INR 1,074.53 Cr and a net worth erosion. Liquidity is poor with current liabilities exceeding current assets by INR 66.88 Cr.