💰 Financial Performance

Revenue Growth by Segment

The company recorded a 13.76% YoY growth in total revenue from operations, reaching INR 581.79 Cr in FY25 compared to INR 511.40 Cr in FY24. Growth is driven by the civil construction segment, specifically hospitals, bridges, and roads. Revenue grew at a CAGR of 15-18% over the four-year period ending FY25.

Geographic Revenue Split

Operations are highly concentrated in Northern India, with Punjab accounting for approximately 45% of the unexecuted order book and Haryana accounting for approximately 50%. This 95% concentration in two states exposes the company to regional regulatory and economic shifts.

Profitability Margins

Net Profit After Tax (PAT) margin stood at 9.75% in FY25, a decline from 11.81% in FY24. Reported PAT decreased by 6.06% to INR 56.75 Cr in FY25 from INR 60.41 Cr in FY24. PBILDT margins were moderate at 10.08% in FY23, while operating profitability improved to 22% in FY24 and reached 25.55% in H1 FY25.

EBITDA Margin

Operating profitability improved significantly to 25.55% during H1 FY25 (April-Sept) from 22% in FY24. This improvement is attributed to the execution of higher-margin contracts and the presence of price escalation clauses that protect against raw material volatility.

Capital Expenditure

The company plans debt-funded capital expenditure in the near term to enhance capacity. While specific INR Cr figures for future years are not fully detailed, the company utilized INR 22.85 Cr for the purchase of Property, Plant, and Equipment in H1 FY25.

Credit Rating & Borrowing

CRISIL Ratings maintains a 'Stable' outlook. Borrowing costs are reflected in an interest coverage ratio of 3.9x in FY25. Following the IPO, the Debt-Equity ratio improved significantly to 0.32x in FY25 from 1.00x in FY24, reducing overall financial risk.

⚙️ Operational Drivers

Raw Materials

Key raw materials include cement, steel, and other construction aggregates. Cost of materials consumed was INR 336.84 Cr in FY25, representing approximately 57.9% of total revenue.

Import Sources

Sourcing is primarily domestic, centered around project sites in Punjab and Haryana to minimize logistics costs for heavy materials like cement and steel.

Key Suppliers

Not specifically named in the documents, but procurement is managed through a mix of established vendors for civil construction materials.

Capacity Expansion

The company operates its own plant and machinery to reduce rental expenses. Planned capex is intended to enhance execution capacity to support the INR 1,500 Cr order book.

Raw Material Costs

Raw material costs totaled INR 336.84 Cr in FY25. The company utilizes escalation clauses in the majority of its contracts to pass on incremental raw material cost increases to customers, maintaining margin stability.

Manufacturing Efficiency

Efficiency is driven by high asset ownership. Return on Capital Employed (ROCE) was 17.85% in FY25, down from 31.64% in FY24 due to the enlarged capital base post-IPO.

Logistics & Distribution

Distribution costs are integrated into construction costs; the focus on Punjab and Haryana (95% of orders) keeps logistics expenses localized.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved through the execution of the INR 1,500 Cr outstanding order book (3x FY24 revenue). The company raised INR 196.22 Cr (net proceeds) via an IPO in 2025 to repay debt and fund working capital, which will lower interest costs and improve bidding capacity for larger government projects.

Products & Services

Civil construction services for infrastructure facilities including hospitals, bridges, roads, railway stations, oil refineries, and government buildings.

Brand Portfolio

Deepak Builders & Engineers India Limited (DBEIL).

New Products/Services

Expansion into specialized infrastructure like railway station redevelopment and oil refinery civil works, which now constitute a portion of the top 3 projects (70% of order book).

Market Expansion

The company aims to diversify geographically beyond Punjab and Haryana to reduce state-specific concentration risks over the long term.

Market Share & Ranking

Operates in a highly fragmented civil construction sector; specific market share percentage not disclosed.

Strategic Alliances

The company maintains strong relationships with government agencies and entities like HSCC India Limited.

🌍 External Factors

Industry Trends

The construction sector is growing due to government focus on infrastructure. The industry is shifting toward larger, more complex EPC (Engineering, Procurement, and Construction) contracts, and DBEIL is positioning itself by scaling its order book to INR 1,500 Cr.

Competitive Landscape

Intense competition from a large number of small to medium-sized players in the civil construction space, which limits aggressive pricing.

Competitive Moat

Moat is based on 30+ years of promoter experience and a strong track record of timely execution with government bodies. This 'established market position' is sustainable but faces pressure from intense competition in the fragmented construction industry.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and interest rate cycles. A 1% increase in interest rates would impact the INR 27.72 Cr finance cost incurred in FY25.

Consumer Behavior

Not applicable as the primary customers are government and quasi-government agencies.

Geopolitical Risks

Low direct impact as operations are domestic, but global commodity price spikes (steel/crude) indirectly affect raw material costs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, Indian Accounting Standards (Ind AS 115 for revenue recognition), and specific technical standards for civil engineering and infrastructure safety.

Environmental Compliance

Not disclosed as a specific INR value, but the company must adhere to construction-related environmental norms for government projects.

Taxation Policy Impact

Effective tax rate is approximately 30%, with INR 24.28 Cr provided for tax in FY25 against a Profit Before Tax of INR 81.03 Cr.

Legal Contingencies

The company has disclosed the impact of pending litigations in Note 36.2 of its financial statements. While specific case values are not totaled in the summary, the auditors noted these are disclosed to reflect their impact on the financial position.

⚠️ Risk Analysis

Key Uncertainties

Execution risk of slow-moving projects in the order book and the potential for further working capital stretching (GCA currently at 325 days) could impact liquidity by 10-15%.

Geographic Concentration Risk

95% of the unexecuted order book is concentrated in Punjab (45%) and Haryana (50%).

Third Party Dependencies

High dependency on government departments for project approvals and timely payments, impacting the current ratio which stood at 2.75x in FY25.

Technology Obsolescence Risk

Low risk in civil construction, but failure to adopt modern project management software could lead to cost overruns.

Credit & Counterparty Risk

Exposure is primarily to government agencies, which have low default risk but can cause delays in receivables, as evidenced by a Debtors' Turnover Ratio of 5.33x in FY25.