MADHUCON - Madhucon Project

📊 NSE: MADHUCON 🏢 Construction 📅 Last Updated: 12/14/2025 9:24

💰 Financial Performance

Revenue Growth by Segment

Standalone operating income for the road and irrigation construction segments declined by 38.99%, falling from INR 951.24 Cr in FY2024 to INR 580.32 Cr in FY2025. For the half-year ended September 30, 2025, the company reported a standalone profit before tax of INR 2.56 Cr compared to a loss of INR 15.40 Cr in the previous full year.

Geographic Revenue Split

Revenue is primarily generated within India, with major projects located in Telangana, Andhra Pradesh, Bihar (Rajauli-Bakthiyapur), Jharkhand (Ranchi), and Tamil Nadu (Madurai-Tuticorin, Trichy-Thanjavur). Specific percentage split by state is not disclosed.

Profitability Margins

Net profitability worsened significantly as the standalone PAT margin moved from -1.1% in FY2024 to -3.6% in FY2025. The standalone net loss increased by 104.8%, growing from INR 10.27 Cr in FY2024 to INR 21.04 Cr in FY2025.

EBITDA Margin

The OPBDIT/OI margin deteriorated from -27.2% in FY2024 to -48.8% in FY2025, representing a 21.6 percentage point decline in core operational profitability due to rising work expenses and reduced scale.

Capital Expenditure

Consolidated Capital Work-in-Progress (CWIP) stood at INR 138.21 Cr as of September 30, 2025, an increase of 58.7% from INR 87.08 Cr in March 2025. Madhucon Heights Private Limited alone has a CWIP of INR 75.02 Cr which is currently under litigation.

Credit Rating & Borrowing

The company is under default recognition with ICRA. Interest coverage ratio worsened from -26.83x in FY2024 to -128.05x in FY2025. The company entered into a One Time Settlement (OTS) with IFCI Ltd for INR 51 Cr, of which INR 42.50 Cr was paid by September 2025.

⚙️ Operational Drivers

Raw Materials

Key materials include cement, steel, bitumen, and fuel/aggregates, which are categorized under 'Cost of Materials Consumed and Work Expenses'. These expenses are the primary cost drivers for road and irrigation projects.

Import Sources

Not disclosed in available documents; however, sourcing is typically domestic (India) given the nature of civil construction projects in Telangana and Bihar.

Capacity Expansion

The company focuses on project execution rather than manufacturing capacity. Current consolidated intangible assets under development and CWIP total approximately INR 138.21 Cr as of September 2025.

Raw Material Costs

Work expenses and material costs are a major component of the total expense structure. Standalone finance costs were INR 2.21 Cr for FY2025, while depreciation and amortization totaled INR 5.70 Cr.

Manufacturing Efficiency

Not applicable as a manufacturing metric; however, the company faces severe operational hurdles as auditors reported that internal financial controls were not operating effectively as of March 31, 2025.

Logistics & Distribution

Not disclosed as a separate percentage; distribution costs are typically integrated into project-site mobilization and material transport for construction.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The strategy focuses on debt restructuring through OTS, resolving legal disputes regarding attached assets, and attempting to restart projects currently in insolvency. The company is also writing off non-performing investments, including a 12.5% write-off (INR 152.75 Cr) in Madhucon Infra Limited.

Products & Services

Road construction (Highways/Expressways), Irrigation projects, and related infrastructure development services.

Brand Portfolio

Madhucon Projects Limited, Madhucon Infra Limited.

New Products/Services

No new product launches identified; focus remains on existing infrastructure contract execution.

Market Expansion

Market expansion is currently constrained by financial distress; the company is focused on maintaining its existing project portfolio in India.

Strategic Alliances

The company operates through numerous subsidiaries and step-down subsidiaries like Madurai Tuticorin Expressways Limited and PT Madhucon Indonesia for international coal/infra interests.

🌍 External Factors

Industry Trends

The infrastructure industry is shifting toward stricter regulatory oversight and faster insolvency resolutions. Madhucon is currently negatively positioned as its subsidiaries are entering CIRP while the broader industry sees growth in NHAI project awards.

Competitive Landscape

Competes with other major Indian infrastructure firms for NHAI and irrigation tenders; however, current financial distress limits its bidding capacity.

Competitive Moat

The company's moat in large-scale civil engineering is currently eroded by its 'Going Concern' status and the auditor's inability to verify the fair value of investments totaling INR 534.08 Cr.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and interest rate cycles due to high leverage (Total Outside Liabilities/Tangible Net Worth of 1.63x).

Consumer Behavior

Not applicable for B2B/Government infrastructure services.

Geopolitical Risks

Exposure in Indonesia for coal/infrastructure; however, the Indonesian subsidiary reported a total comprehensive loss of INR 3.65 Lakhs for H1 FY2026 with zero revenue.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by NHAI guidelines, PMLA (Prevention of Money Laundering Act) due to ED investigations, and the Insolvency and Bankruptcy Code (IBC) for its subsidiaries.

Environmental Compliance

Not specifically disclosed in INR Cr.

Taxation Policy Impact

The company reported a current tax liability of INR 7.52 Cr as of September 30, 2025.

Legal Contingencies

Pending litigations include the ED attachment of assets worth INR 176.86 Cr. There is also an unpaid dividend of INR 3.73 Lakhs from FY 2009-11 not yet transferred to IEPF. Madhucon Heights Pvt Ltd has a pending case in the High Court of Telangana regarding CWIP of INR 75.02 Cr.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Going Concern' status, as the net worth of several subsidiaries is fully eroded. Auditors have issued a qualified opinion due to the inability to ascertain the basis of partial write-offs in Madhucon Infra Limited.

Geographic Concentration Risk

High concentration in India, specifically in the states of Telangana, Andhra Pradesh, and Bihar.

Third Party Dependencies

High dependency on NHAI for project approvals and toll collections, and on the NCLT/NCLAT for the outcome of insolvency proceedings for Ranchi and Trichy-Thanjavur projects.

Technology Obsolescence Risk

Low risk in civil construction, but the company lacks an effective internal audit system, which was not conducted for the period April 2024 to March 2025.