AKASH - Akash InfraProj.

📊 NSE: AKASH 🏢 Construction 📅 Last Updated: 12/13/2025 18:05

💰 Financial Performance

Revenue Growth by Segment

The Construction segment remains the primary driver, contributing the bulk of revenue. For the half-year ended September 30, 2025, total revenue grew by 137.39% YoY to INR 17.25 Cr from INR 7.27 Cr. However, annual revenue for FY25 saw a sharp decline of 50.35% to INR 26.51 Cr compared to INR 53.36 Cr in FY24. The Fuel and Grocery segment is a secondary contributor with assets valued at INR 6.95 Cr as of September 2025.

Geographic Revenue Split

100% of revenue is generated within India, specifically concentrated in the state of Gujarat. Operations are centered in Gandhinagar and Ahmedabad, serving local government bodies like the Ahmedabad Municipal Corporation (AMC) and the Roads and Buildings Department of Gujarat.

Profitability Margins

Net profit for FY25 was INR 0.36 Cr, a marginal increase of 4.56% from INR 0.34 Cr in FY24, despite the 50% revenue drop, indicating cost optimization. For H1 FY26, the company reported a profit of INR 0.91 Cr compared to a loss of INR 1.37 Cr in H1 FY25. PAT margin in FY23 was 2.27%, down from 3.02% in FY22.

EBITDA Margin

Operating margins have been volatile; estimated at over 4.5% for FY24 compared to 10.9% in FY23. In the first nine months of FY24, the operating margin was negative 0.42% due to slow order execution and lower billing. The company targets a return to margins over 6.5% to 7% for credit rating upgrades.

Capital Expenditure

The company maintains a policy of avoiding major debt-funded capital expenditure to support its financial risk profile. Most recent investments are focused on maintaining its construction equipment fleet, with depreciation and amortization standing at INR 0.28 Cr for H1 FY26.

Credit Rating & Borrowing

Long-term rating was downgraded to 'CRISIL B-/Stable' from 'CRISIL B/Stable' on August 13, 2025. Short-term rating is 'CRISIL A4'. The downgrade reflects a 50% revenue drop in FY25 and stretched liquidity. Bank loan facilities total INR 80 Cr with high utilization levels near 96-98%.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel, cement, bitumen (petroleum products), and other building materials. These constitute the majority of the 'Cost of Material Consumed,' which was INR 12.18 Cr for H1 FY26, representing 70.6% of revenue.

Import Sources

Raw materials are primarily sourced locally within the state of Gujarat to minimize logistics costs for road projects in Gandhinagar and Ahmedabad.

Key Suppliers

Not specifically disclosed in the documents, but the company relies on major regional cement and steel manufacturers and petroleum dealers for bitumen.

Capacity Expansion

Capacity is measured by the order book. As of March 31, 2025, the company had an order book of INR 208 Cr to be executed over 2-3 years, a significant increase from INR 133 Cr in March 2024 and INR 65 Cr in January 2024.

Raw Material Costs

Cost of materials consumed rose to INR 12.18 Cr in H1 FY26 from INR 4.75 Cr in H1 FY25, a 156% increase, tracking the revenue growth. High volatility in steel and cement prices remains a primary risk to project profitability.

Manufacturing Efficiency

Efficiency is driven by the ability to successfully bid for and execute government tenders. The company has been active for over 20 years, providing a competitive edge in technical qualification for Gujarat state projects.

Logistics & Distribution

Distribution costs are primarily related to the movement of heavy machinery and materials to road construction sites across Gujarat.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth is targeted through aggressive bidding for road construction and repair tenders from the Gujarat government. The company aims for a 20% annual revenue improvement by utilizing its INR 208 Cr order book and pursuing new projects in the Irrigation and Commercial Construction verticals.

Products & Services

Road construction and repair services, fuel (petrol/diesel) retailing, and grocery sales.

Brand Portfolio

Akash Infra-Projects, Akash Petroleum, Akash Residency & Hospitality.

New Products/Services

The company is strengthening its business verticals in Irrigation and Commercial Construction as part of a corporate restructuring process to diversify beyond road projects.

Market Expansion

Focus remains on deepening presence in Gujarat, specifically targeting projects from the Ahmedabad Urban Development Authority and the Roads and Buildings Department.

Market Share & Ranking

Not disclosed, but identified as an established player in the Gujarat civil construction industry with over 20 years of experience.

Strategic Alliances

The company operates with subsidiaries and associates including Akash Infra Inc., Akash International LLC, Akash Petroleum Private Limited, and Akash Residency & Hospitality Private Limited.

🌍 External Factors

Industry Trends

The construction industry is cyclical and highly competitive. Current trends show a shift toward larger, integrated infrastructure projects, though AIPL remains focused on regional road maintenance and construction where it has a proven track record.

Competitive Landscape

Intense competition from local and national construction firms which creates pricing pressure and impacts the ability to maintain operating margins above 7%.

Competitive Moat

The moat is based on a 20-year relationship with Gujarat state departments and a proven track record that provides an advantage in the technical bidding process for government tenders. This is sustainable as long as the company maintains its 'AA' class contractor status.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending in Gujarat and national economic developments that influence tax laws and regulation changes.

Consumer Behavior

Demand is driven by government policy and urban development needs rather than individual consumer behavior.

Geopolitical Risks

Limited to national eco-political developments that might affect government contracting and infrastructure budgets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, SEBI Listing Obligations (LODR) 2015, and state-specific construction safety and quality standards set by the Gujarat PWD.

Environmental Compliance

Not disclosed.

Taxation Policy Impact

The company is subject to Indian corporate tax laws. Tax expense for H1 FY26 was approximately INR 0.08 Cr.

Legal Contingencies

A significant arbitration award of INR 85.83 Cr was passed in favor of AIPL in January 2022 regarding pending receivables from AMC. However, AMC has filed an appeal, and the decision remains pending, which is a critical monitorable for liquidity.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the realization of the INR 85.83 Cr arbitration award. A failure to win the appeal could result in a permanent liquidity strain. Revenue volatility is also high, as seen in the 50% drop in FY25.