💰 Financial Performance

Revenue Growth by Segment

The Company operates in three segments: 'Development of Real Estate Property', 'Civil Contracting Business', and 'Investment segment'. Standalone revenue for FY2025 was INR 17.99 Cr, representing a 12.71% decline from INR 20.61 Cr in FY2024. Historically, revenue grew 5.96% in FY2021 to INR 120.92 Cr, but recent performance shows significant contraction due to operational challenges.

Geographic Revenue Split

The Company maintains a strong foothold in the Nashik region of Maharashtra, India, which serves as its primary revenue base. It is expanding into the ECOWAS and COMESA regions of Africa for low-cost housing projects via a 100% subsidiary in the UAE, though specific percentage splits for these new regions are not yet disclosed.

Profitability Margins

The Company is currently loss-making on a standalone basis, reporting a net loss of INR 38.34 Cr in FY2025 compared to a loss of INR 36.57 Cr in FY2024. Historical PAT margins were 16.75% in FY2021, but have since turned negative due to high finance costs and NPA classifications.

EBITDA Margin

EBITDA margin for FY2025 was -0.12%, a slight improvement from -0.71% in FY2024. In Q2 FY2022, EBITDA margins were as high as 44.95%, driven by the introduction of a 'Business Support Services' segment, but current margins are suppressed by declining revenue and fixed costs.

Capital Expenditure

Historical capital expenditure is not explicitly detailed in INR Cr, but the company utilized 950 FCCBs (Foreign Currency Convertible Bonds) issued to Global Focus Fund Ltd for overseas business expansion in the infrastructure sector. 420 FCCBs were converted to equity between April and December 2024 to strengthen the balance sheet.

Credit Rating & Borrowing

The Company's loan accounts have been classified as Non-Performing Assets (NPA), leading to interest being recorded on a provisional basis. As of H1 FY2021, Interest Coverage was 1.32x and Total Debt/OPBDIT was 6.43x. The Debt-Equity ratio stood at 0.08 in FY2025, lowered by the conversion of FCCBs into equity.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include cement, steel, sand, and bricks for real estate and EPC projects. While specific percentage breakdowns are not disclosed, these typically constitute 60-70% of project costs in civil contracting.

Import Sources

Raw materials are primarily sourced locally within Maharashtra (Nashik region) to support domestic projects. For African projects, sourcing is planned through the UAE-based subsidiary.

Key Suppliers

Specific supplier names are not disclosed in the provided documents; however, the company manages day-to-day procurement through its Whole Time Director, Manohar Karda, focusing on raw material cost management.

Capacity Expansion

Current operations are focused on residential projects ranging from 1BHK to penthouses in Nashik. Expansion plans involve low-cost housing development in the ECOWAS and COMESA regions of Africa, funded by the 950 FCCBs issued in November 2022.

Raw Material Costs

Project costs are a significant driver of revenue recognition under Ind AS 115. In FY2021, total expenses were INR 100.53 Cr. Fluctuations in steel and cement prices directly impact the 'cost to complete' estimates, which can lead to overstatement or understatement of revenue.

Manufacturing Efficiency

Efficiency is measured by the 'cost to complete' workings versus budgeted costs. Auditors identified the measurement of revenue over time as a Key Audit Matter due to the high level of management judgment required in estimating these costs.

Logistics & Distribution

Distribution costs are primarily related to the marketing of residential real estate units in Nashik micro-markets, where the company holds a leadership position.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is targeted through geographic diversification into Africa (ECOWAS/COMESA) for low-cost housing and the expansion of the 'Business Support Services' segment. The company is also converting FCCBs to equity to reduce debt pressure and improve the financial position for new project bidding.

Products & Services

Residential apartments (1BHK to penthouses), Civil Contracting services, Real Estate Development, and Business Support Services.

Brand Portfolio

Dharan Infra-EPC (formerly KBC Global Limited).

New Products/Services

Introduction of 'Business Support Services' to the real estate sector, which contributed to a 72.64% increase in EBITDA in Q2 FY2022.

Market Expansion

Targeting the African continent (ECOWAS & COMESA regions) for infrastructure and low-cost housing projects through its UAE subsidiary.

Market Share & Ranking

Market leadership across micro-markets in the Nashik region.

Strategic Alliances

Maintains a robust JD (Joint Development) partnership ecosystem for real estate projects.

🌍 External Factors

Industry Trends

The industry is shifting toward low-cost housing and infrastructure EPC. Dharan is positioning itself to capture this by pivoting from pure real estate to Infra-EPC and expanding into developing African markets.

Competitive Landscape

Competes with local real estate developers in Nashik and mid-sized EPC firms in the civil contracting space.

Competitive Moat

The moat is based on a strong local foothold and market leadership in Nashik. However, this moat is currently threatened by financial instability, NPA status, and modified audit opinions which may limit future project financing.

Macro Economic Sensitivity

Highly sensitive to interest rates and real estate demand in India. The NPA status makes the company particularly vulnerable to changes in banking regulations and credit availability.

Consumer Behavior

Demand in Nashik is driven by residential buyers looking for a range of housing options from affordable 1BHKs to premium penthouses.

Geopolitical Risks

Expansion into Africa (ECOWAS/COMESA) introduces risks related to regional political stability and cross-border regulatory compliance.

⚖️ Regulatory & Governance

Industry Regulations

The Company is subject to RERA for real estate and RBI regulations for FCCBs. It is currently in the process of resubmitting a compounding application to the RBI for violations related to FCCB end-use and reporting.

Environmental Compliance

Not disclosed in absolute INR values.

Taxation Policy Impact

The company reported a tax expense of INR 7.67 Cr in FY2021 on a PBT of INR 27.93 Cr.

Legal Contingencies

The Company has pending litigations as of March 31, 2025, disclosed in Note 51 of the financial statements. There is a material uncertainty regarding the company's ability to continue as a going concern due to accumulated losses and regulatory non-compliance.

⚠️ Risk Analysis

Key Uncertainties

Material uncertainty exists regarding the 'Going Concern' status (100% impact risk) due to persistent losses and RBI compounding issues. The NPA classification of loans prevents accurate financial tracking and increases the risk of asset seizure.

Geographic Concentration Risk

High concentration in Nashik, Maharashtra, though the company is attempting to diversify into Africa to mitigate this.

Third Party Dependencies

Dependent on Global Focus Fund Ltd for FCCB funding and AD Banks for regulatory clearances (LRN 202206106).

Technology Obsolescence Risk

The company's accounting software lacks a mandatory 'audit trail' (edit log) feature, violating Rule 11(g) of the Companies Rules, which poses a significant regulatory and data integrity risk.

Credit & Counterparty Risk

Trade receivables records are inadequate, making it difficult to assess the quality of receivables and the risk of bad debts.