SSEGL - Sathlokhar

📊 NSE: SSEGL 🏢 Construction 📅 Last Updated: 12/14/2025 12:54

💰 Financial Performance

Revenue Growth by Segment

Total revenue reached INR 401.83 Cr in FY25, representing a 62.47% YoY growth from INR 247.32 Cr in FY24. In H1 FY26, turnover increased by approximately 75% YoY, driven by strong execution in core EPC verticals.

Geographic Revenue Split

While specific regional percentages are not fully detailed, the company is expanding beyond its base in Tamil Nadu, with 40% of orders currently coming from diversified regions, including international presence in Sri Lanka.

Profitability Margins

PAT margin improved slightly from 10.56% in FY24 to 10.64% in FY25, with an absolute PAT of INR 42.77 Cr. The company is targeting a PAT margin of 11% for FY26 through operational efficiency and in-house manufacturing.

EBITDA Margin

EBITDA margin stood at 14.92% in FY25 (INR 59.94 Cr), up from 14.53% in FY24 (INR 35.93 Cr). This 39 bps improvement reflects better scale and execution efficiency.

Capital Expenditure

The company is investing in a new 4-line Pre-Engineered Building (PEB) manufacturing facility. The first two lines are scheduled for inauguration by August 31, 2025, with the full 4-line capacity expected by the end of 2026.

Credit Rating & Borrowing

The company maintains a very conservative leverage profile with a Debt-to-Equity ratio of 0.05 Times and a high Interest Coverage ratio of 29.87 Times, indicating minimal reliance on external debt.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel, cement, and construction aggregates, which typically constitute the bulk of EPC project costs. Specific percentage breakdowns per material were not disclosed.

Import Sources

Sourcing is primarily domestic within India, specifically supporting projects in Tamil Nadu and other states where civil works are executed.

Key Suppliers

Not specifically named in the documents, though the company manages a broad vendor base for civil and infrastructure materials.

Capacity Expansion

Currently operating as an EPC contractor; expanding into manufacturing with a 4-line PEB facility. This transition is expected to improve bottom-line margins by 1% to 1.5% by reducing third-party procurement costs.

Raw Material Costs

Raw material costs are managed through project-based procurement. The shift to in-house PEB production is a strategic move to control costs and capture an additional 100-150 bps in margin.

Manufacturing Efficiency

Fixed Asset Turnover is high at 43.11 Times, reflecting an asset-light EPC model that is now transitioning toward integrated manufacturing.

Logistics & Distribution

Distribution costs are integrated into project execution costs for civil works at client sites like Toyota Kirloskar and Reliance Consumer Products.

📈 Strategic Growth

Expected Growth Rate

150%

Growth Strategy

The company aims to reach INR 1000+ Cr in revenue for FY26 (up from INR 401.83 Cr in FY25) by leveraging a record order inflow of INR 830 Cr achieved in H1 FY26. Growth will be driven by expansion into high-demand sectors like data centers, EVs, and renewables, alongside the margin-accretive PEB manufacturing facility.

Products & Services

EPC (Engineering, Procurement, and Construction) services, Civil works, Infrastructure development, and Factory building construction.

Brand Portfolio

Sathlokhar Synergys E&C Global Limited.

New Products/Services

In-house manufactured Pre-Engineered Buildings (PEB) are the primary new offering, expected to contribute to both revenue and a 1-1.5% margin expansion.

Market Expansion

Expanding geographically within India and maintaining a presence in Sri Lanka; targeting 40% of orders from new geographic segments.

Strategic Alliances

Recent business orders worth INR 35.40 Cr secured from Reliance Consumer Products Limited (Campa Cola), Toyota Kirloskar Motor, and Krishca Strapping Solutions.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward 'New Age Sectors' including Data Centers, EVs, and Renewables. SSEGL is positioning itself to capture this demand, which is currently growing at a rapid pace due to digital and green energy transitions.

Competitive Landscape

Operates in the competitive EPC and civil works market, competing with both local and national infrastructure firms.

Competitive Moat

Moat is built on execution scale, a strong ROCE of 24.80%, and deep relationships with blue-chip clients like Toyota and Reliance. The transition to in-house PEB manufacturing creates a cost leadership advantage that is sustainable as it reduces dependency on external vendors.

Macro Economic Sensitivity

Highly sensitive to industrial Capex cycles and FDI inflows, which drive the demand for new factories and infrastructure.

Consumer Behavior

Growth in e-commerce is driving demand for large-scale warehousing and logistics hubs, directly benefiting SSEGL's order book.

Geopolitical Risks

Operations in Sri Lanka expose the company to regional economic stability risks.

⚖️ Regulatory & Governance

Industry Regulations

Complies with Companies Act 2013, SEBI LODR, and building/construction standards. BRSR reporting is not yet applicable as of March 31, 2025.

Environmental Compliance

The company spent INR 29,00,000 on CSR activities (Education, Healthcare, Skill Development) in Tamil Nadu, exceeding the statutory 2% requirement.

Taxation Policy Impact

The company follows standard Indian corporate tax rates; specific effective tax rate % was not disclosed.

Legal Contingencies

Audit reports indicate no material discrepancies in internal financial controls; no specific high-value pending court cases were listed in the provided summaries.