💰 Financial Performance

Revenue Growth by Segment

The company reported a massive 76.5% revenue growth in H1 FY 2025-26. Segmental revenue for H1-FY26 is dominated by Road & Bridge Projects at 84.35%, followed by Water Supply Projects (WSP) at 7.91%, Railway Projects at 5.58%, Power Infrastructure at 1.64%, and Civil Infrastructure at 0.52%.

Geographic Revenue Split

Operations are spread across Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab, Delhi NCR, Odisha, and Bihar. While specific percentage splits per state are not disclosed, the company is actively executing projects in these 10 regions to mitigate geographic concentration risk.

Profitability Margins

Net Profit Ratio decreased from 11.50% in FY24 to 7.94% in FY25, a 30.93% decline, because net profit growth did not keep pace with the 35% revenue increase. However, H1 FY26 saw a 70% jump in profit, with annualized ROCE improving significantly from 22.5% to 29.7%.

EBITDA Margin

EBITDA margin for H1-FY26 stood at 14.85%, showing recovery from the FY25 margin of 12.53%. The FY25 EBITDA was INR 20.31 Cr, a 5% decrease from INR 21.43 Cr in FY24, primarily due to a 45% increase in land development and construction costs.

Capital Expenditure

Gross Fixed Assets increased by 9% to INR 13.07 Cr in FY25 from INR 12.01 Cr in FY24. The company invested in a fleet of 64+ state-of-the-art construction machines, including tippers and excavators, to support its EPC project execution.

Credit Rating & Borrowing

Interest costs rose by 19% to INR 3.20 Cr in FY25. The Debt-Equity ratio stood at 0.72x in FY25 and increased to 0.81x by H1-FY26, reflecting higher borrowing to fund the expanding order book and working capital needs.

⚙️ Operational Drivers

Raw Materials

Specific raw material names are not listed, but 'Land development and construction costs' represent the largest expense at INR 108.02 Cr, accounting for 73.6% of total revenue in FY25.

Import Sources

Materials are sourced domestically from states where projects are active, including Uttar Pradesh, Gujarat, Rajasthan, Karnataka, Madhya Pradesh, Odisha, Bihar, and Haryana.

Key Suppliers

The company works with and serves major industry players including L&T, TATA, HG Infra, GR Infra, and Vindhya Telelinks Ltd., who act as both clients and partners in the project value chain.

Capacity Expansion

The company currently operates a fleet of 64+ construction machines. It is expanding into the renewable energy sector with a planned 2 MW Solar IPP plant in Haryana and aims to further increase RE assets through mergers and acquisitions.

Raw Material Costs

Construction costs rose 45% YoY to INR 108.02 Cr in FY25. The company manages these costs through a well-defined procurement policy for raw materials, consumables, and key spares to ensure availability for planned schedules.

Manufacturing Efficiency

The company achieved an 83% on-time project delivery rate in FY25. Operating leverage improved in H1-FY26 as employee expenses grew only 48% while profits rose 70%, indicating higher workforce productivity.

Logistics & Distribution

Distribution and mobilization costs are integrated into the construction cost of INR 108.02 Cr. The company uses its own fleet of 64+ machines to optimize these logistics costs.

📈 Strategic Growth

Expected Growth Rate

59%

Growth Strategy

Growth will be driven by diversifying into high-margin sectors like Railways and Water (Jal Jeevan Mission), expanding the Renewable Energy portfolio through a 2 MW solar plant in Haryana, and aggressive bidding for NHAI and T&D projects totaling approximately INR 450 Cr.

Products & Services

EPC services for Road & Bridge construction, Water Supply infrastructure, Railway projects, Power Transmission & Distribution, and Solar Power generation (IPP model).

Brand Portfolio

K2 Infragen, Animaus Energy (wholly owned subsidiary), K2 Cloud Private Limited.

New Products/Services

Entry into the Independent Power Producer (IPP) model with solar assets and Tariff-Based Competitive Bidding (TBCB) projects in FY 26-27 to generate regular annuity income.

Market Expansion

Expanding presence in the Transmission & Distribution (T&D) and Railway sectors, with direct biddings for tenders valued at INR 450 Cr in H1 FY 25-26.

Strategic Alliances

The company maintains strategic client relationships with NHAI, North Western Railways, HSIIDC, and Hindustan Copper Ltd.

🌍 External Factors

Industry Trends

India is in a major infrastructure build-out phase across roads, railways, and power. K2IL is positioning itself as a complete solution provider across the value chain to capture this growth.

Competitive Landscape

Faces intense competition in the EPC market which could impact contract win rates. Mitigation involves positioning as a specialized provider for 'challenging' infra projects.

Competitive Moat

Moat is built on an integrated EPC model, a large in-house fleet of 64+ machines (reducing rental costs), and a proven track record of 48 executed projects with an 83% on-time delivery rate.

Macro Economic Sensitivity

Highly sensitive to India's infrastructure build-out. Economic downturns are mitigated by diversifying into multiple sub-sectors like water and railways to maintain a resilient revenue model.

Consumer Behavior

Not applicable for B2B/Government EPC services.

Geopolitical Risks

The company monitors changes in government policies and regulations which could disrupt business operations or impact growth prospects in the domestic infra space.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by NHAI standards, Railway bidding norms, and Jal Jeevan Mission guidelines. The company also complies with SEBI Regulation 30 for investor disclosures.

Environmental Compliance

Maintains ISO 14001:2015 for Environmental Management Systems and ISO 45001:2018 for Occupational Health and Safety.

Taxation Policy Impact

The effective tax rate is approximately 22%, based on FY25 PBT of INR 14.97 Cr and PAT of INR 11.65 Cr.

Legal Contingencies

The company appointed Cost Auditors for FY 2025-26 with a ratified remuneration of INR 2,00,000. No major pending court cases or litigation values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 113% surge in trade receivables (INR 129.66 Cr), which could impact liquidity if collection cycles lengthen further.

Geographic Concentration Risk

While operating in 10 states, the company has a focused presence in North India (UP, Haryana, Rajasthan).

Third Party Dependencies

Low dependency on equipment rentals due to owning 64+ machines, but high dependency on government tender timelines for the INR 450 Cr bidding pipeline.

Technology Obsolescence Risk

Risk of rapid technological advancements rendering current construction solutions obsolete; mitigated by continuous R&D and technology upgrades.

Credit & Counterparty Risk

Exposure to government bodies (NHAI, Railways) and large EPC firms (L&T, TATA), which generally represent high-quality but sometimes slow-paying counterparties.