KONSTELEC - Konstelec Engg.

📊 NSE: KONSTELEC 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/14/2025 8:59

💰 Financial Performance

Revenue Growth by Segment

Revenue grew 43% YoY in fiscal 2024 to INR 215.4 Cr, but declined 10% in fiscal 2025 to INR 194 Cr due to project disruptions and certification delays. Segments include Petrochemicals, Chemicals, Cement, and Textiles.

Geographic Revenue Split

Primarily India-based operations (100% current). The company recently expanded into Saudi Arabia via a 50% Joint Venture (Degat Alebtikar Co. Ltd) incorporated in February 2025.

Profitability Margins

Operating margins moderated from 8.65% in fiscal 2024 to 6.86% in fiscal 2025. Net cash accruals are expected to remain over INR 9 Cr, sufficient against repayment obligations of INR 2.0-2.05 Cr.

EBITDA Margin

Operating margin was 6.86% in fiscal 2025, a decline from 8.65% in fiscal 2024 due to higher unbilled inventory and project delays.

Capital Expenditure

No major debt-funded capital expenditure is planned over the medium term. The company maintains a comfortable net worth base of INR 98.61 Cr as of March 31, 2025.

Credit Rating & Borrowing

CRISIL BBB-/Stable (reaffirmed) and CRISIL A3. Bank limit utilization is average at 85% for the 12 months ended May 2025.

⚙️ Operational Drivers

Raw Materials

Electromechanical equipment, instrumentation components, and cables (implied by EPC and installation services).

Import Sources

Not specifically disclosed, though the Saudi Arabian JV suggests future regional sourcing for Middle Eastern projects.

Capacity Expansion

Order book increased to over INR 400 Cr as of July 2025, up from INR 350 Cr in April 2024, providing revenue visibility for the medium term.

Raw Material Costs

Not disclosed as a specific percentage of revenue; however, subcontractor expenses were noted at INR 4.70 Lakhs in specific related party transactions.

Manufacturing Efficiency

Capacity utilization is linked to project execution timelines; fiscal 2025 efficiency was impacted by project disruptions and certification delays.

📈 Strategic Growth

Growth Strategy

Execution of a healthy INR 400 Cr+ order book, international expansion through a 50% JV in Saudi Arabia, and leveraging 20+ years of promoter experience to secure high-value orders from reputed clients.

Products & Services

EPC services, installation, testing, commissioning, and maintenance of electrical and instrumentation systems for heavy industries.

Brand Portfolio

Konstelec Engineers Limited.

New Products/Services

Expansion into international EPC services via the Saudi Arabian JV (Degat Alebtikar Co. Ltd).

Market Expansion

Targeting the Middle Eastern market through the Saudi Arabian JV incorporated in February 2025.

Strategic Alliances

Joint Venture with Konstelec Hitech Engineers Private Limited (47% share) and Saudi Arabia Degat Alebtikar Co. Ltd (50% share).

🌍 External Factors

Industry Trends

The engineering services industry is seeing growth in high-value EPC contracts, but remains susceptible to project-specific timelines and regulatory certification delays.

Competitive Landscape

Competes with other industrial electrical and instrumentation EPC firms; market dynamics are driven by technical qualification and project execution track records.

Competitive Moat

Durable advantage through 20+ years of promoter experience and established relationships with Tier-1 PSU and private sector clients, which are difficult for new entrants to replicate.

Macro Economic Sensitivity

Highly sensitive to industrial capex cycles in the petrochemical, steel, and cement sectors.

Consumer Behavior

Not applicable as the company is a B2B industrial service provider.

Geopolitical Risks

Potential trade and operational risks associated with the new Saudi Arabian JV.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with Section 148(1) regarding cost records was not applicable for FY24-25. Adheres to safety and site-specific industrial standards.

Environmental Compliance

Maintains policies for environmentally clean and safe operations; CSR expenditure of INR 18.63 Lakhs in FY25.

Legal Contingencies

No significant material orders passed by regulators or courts affecting going concern status. Managerial remuneration exceeded the 25% net profit ceiling in FY25 due to lower-than-anticipated profits.