NIRAJ - Niraj Cement

📊 NSE: NIRAJ 🏢 Construction 📅 Last Updated: 12/14/2025 10:33

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) decreased by 22.32% from INR 605.31 Cr in FY23 to INR 470.22 Cr in FY24, primarily due to a large quantum of completed work remaining uncertified and unbilled at year-end. The company targets a topline of over INR 500 Cr for FY25, having achieved INR 220.40 Cr (44% of target) by September 30, 2024.

Geographic Revenue Split

The company faces high geographic concentration with approximately 72% of FY24 revenue generated from projects in Maharashtra and Manipur. The remaining 28% is distributed across other regions including Gujarat and Northeast states.

Profitability Margins

Profitability margins are improving as the company shifts its mix. Operating margins rose from 1.46% in FY23 to 3.49% in FY24. Net profit margins (PAT) improved from 0.66% (INR 4.02 Cr) in FY23 to 2.15% (INR 10.29 Cr) in FY24, representing a 155.97% increase in absolute PAT.

EBITDA Margin

EBITDA margin stood at 3.49% in FY24, up from 1.46% in FY23. For 9MFY25, the EBITDA margin further stabilized at 3.56%. The low historical margins are a direct result of the outsourcing/JV business model where NCSL often only lends its name for bid qualification.

Capital Expenditure

The company is undergoing a significant capital infusion, raising INR 25 Cr in December 2024 (INR 12.50 Cr via preferential allotment and INR 12.50 Cr via warrants). A total of INR 139.53 Cr is planned to be raised over 18 months to fund business expansion and transition to an in-house execution model.

Credit Rating & Borrowing

Infomerics assigned a rating of IVR BBB/Stable in March 2025 for proposed long-term bank facilities of INR 5.00 Cr. The company is currently virtually debt-free with an overall gearing of 0.00x as of March 31, 2024, down from 0.15x in FY23.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include cement, steel, bitumen, and aggregates, though individual percentage breakdowns are not disclosed. These materials are critical for the construction of highways, bridges, and metro corridors.

Import Sources

Sourced domestically within India, specifically from states where projects are executed such as Maharashtra, Manipur, Gujarat, and Nagaland to minimize logistics costs.

Key Suppliers

Not specifically named in the documents; however, the company maintains long-standing relationships with suppliers to secure repeat orders and manage input costs.

Capacity Expansion

Not applicable in a manufacturing sense, but the company is expanding its execution capacity by transitioning from a 100% outsourcing model to in-house execution, supported by a 3.29x revenue-to-order-book ratio.

Raw Material Costs

Input costs are managed through cost escalation clauses included in government contracts, which protect margins against price volatility in steel and cement.

Manufacturing Efficiency

Operational efficiency is measured by a 28% success rate in tender bidding and an interest coverage ratio that improved significantly from 18.37x in FY23 to 61.05x in FY24.

Logistics & Distribution

Distribution costs are project-specific; the company manages these by focusing on geographical clusters like Maharashtra and Manipur to optimize mobilization.

📈 Strategic Growth

Expected Growth Rate

6.30%

Growth Strategy

Growth will be achieved by transitioning to an 'own execution' model which offers higher margins than JVs. The company is backed by a robust unexecuted order book of INR 1,546.5 Cr (as of Dec 2024), providing 3.29x revenue visibility. Recent major wins include a INR 220.14 Cr NHIDCL order in Nagaland and a INR 82.66 Cr MMRDA order in Mumbai.

Products & Services

Speciality engineering construction services for highways, bridges, flyovers, water supply, drainage, irrigation, BRTS projects, and Metro rail infrastructure.

Brand Portfolio

Niraj Cement Structurals Limited (NCSL).

New Products/Services

Expansion into Metro connectivity projects, such as the new INR 82.66 Cr order for providing connectivity from SGMC monorail to Mahalaxmi metro via FOB with Travellators.

Market Expansion

Expanding presence in the North Eastern states through SARDP-NE projects and increasing footprint in Gujarat with the INR 50.50 Cr Mandvi Bypass project.

Market Share & Ranking

Operates in a highly fragmented industry with a 28% tender success rate; specific market share percentage is not disclosed.

Strategic Alliances

Utilizes Joint Ventures (JVs) primarily to meet bid qualification criteria for large-scale government tenders.

🌍 External Factors

Industry Trends

The infrastructure industry is evolving toward EPC (Engineering, Procurement, and Construction) modes. NCSL is positioning itself to capture this by raising equity to fund the transition from a pure outsourcing firm to an active executor.

Competitive Landscape

Intense competition from both organized and unorganized players in a fragmented market, leading to aggressive bidding and low initial margins.

Competitive Moat

Moat is based on 25+ years of promoter experience and long-standing relationships with government departments, which facilitates repeat orders and successful bidding.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and budgetary allocations for NHAI and MoRTH.

Consumer Behavior

Not applicable as the primary customers are government agencies.

Geopolitical Risks

Internal security risks in Manipur and regional instability in the North East impact project timelines and labor availability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by tender specifications from MoRTH, NHAI, and railway authorities, including strict adherence to EPC contract norms and milestone-based billing.

Environmental Compliance

Infrastructure projects are subject to regulatory clearances and environmental impact assessments, which have caused delays in projects like the BKC-Vakola corridor.

Taxation Policy Impact

Not specifically disclosed, but the company operates under standard Indian corporate tax laws.

Legal Contingencies

The company provided INR 42.44 Cr toward credit-impaired financial assets (bad debts) and withdrew INR 33.80 Cr from general reserves in FY24 to account for these impairments.

⚠️ Risk Analysis

Key Uncertainties

Execution delays due to external factors (site handover, clearances) and the inherent volatility of a tender-based revenue model with a 28% success rate.

Geographic Concentration Risk

High risk with 72% of revenue coming from Maharashtra and Manipur, making the company vulnerable to regional political or environmental disruptions.

Third Party Dependencies

High dependency on subcontractors for current execution and working capital funding, though this is a deliberate strategy to maintain a low-risk balance sheet.

Technology Obsolescence Risk

Low risk in civil construction, but the company must adopt modern engineering techniques for projects like 'FOB with Travellators' and 'PSC Slab' bridges.