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    Lakshya Powertech Q4 FY25 earnings call

    LAKSHYA
    Construction·19 May 2025
    Management Summary

    Lakshya Powertech reported FY25 revenue of ₹160 crores, a 6.7% increase from FY24, despite execution challenges in H2 due to IPO delays. The company holds a ₹275 crore order book and targets 25-30% revenue CAGR. Strategic focus on data centers and renewable energy is expected to drive future growth, with new order inflows anticipated from September and June respectively. Management is addressing working capital intensity and expects positive operating cash flow for the current year.

    Highlights

    5

    • FY25 revenue grew to ₹160 crores from ₹150 crores in FY24, despite IPO-related cash flow challenges.

    • Current order book of ₹275 crores provides strong revenue visibility, with ₹175-180 crores executable in the current year.

    • Strategic entry into data center segment with a planned ₹67 crore manufacturing facility and expansion into new services.

    • Anticipating significant order inflow from data centers starting September and new renewable energy projects from June.

    • Management expects operating cash flow to be positive in the current year, reversing last year's negative trend.

    Concerns

    3

    • H2 FY25 results were substantially below previous year due to a 4-5 month cash flow stoppage caused by IPO delays.

    • Debtors significantly increased in Q4 FY25 (Feb-March) due to major equipment supply for a ₹30-40 crore project.

    • Acknowledged pricing pressure in the EPC sector, though mitigated by in-house execution capabilities.

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹160 Cr+6.7%YoY
    2. 02PAT Margin (Overall)10%
    3. 03PAT Margin (Data Centers)16%
    4. 04PAT Margin (EPCC Oil & Gas)13%
    5. 05PAT Margin (O&M)6%

    Order Book

    high confidence

    Total Value

    ₹ 275 crores

    as of 2025-05-19

    quantified

    Execution

    Approximately Rs. 175 to Rs. 180 crore out of this Rs. 275 crore order book will be covered in the current year revenue.

    Composition

    Mix2 segments
    • EPCC56.0%
    • O&M42.0%

    Share of order book by segment

    Pipeline

    qualified rfp

    Bidding for under Rs. 300 crores worth of projects for oil and gas sector. Qualified for single largest order up to Rs. 500 crores.

    "The current order book provides good visibility for the current year's revenue, with a significant portion expected to be executed."

    Source:
    Prepared remarks

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹67 crores

    Liquidity

    Liquidity disclosed

    Operating cash flow was negative last year but is expected to be positive in the current year. Sufficient working capital limits are available, with potential for negotiation with bankers for enhancement if required. IPO funds received in October helped resolve cash flow issues.

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Revenue CAGR
    25-30%
    		Medium
    Revenue
    Revenue CAGR
    30-35%
    		Medium
    Margin
    PAT Margin
    11-12%
    		Medium
    Data Center Business
    Increase in data center projects
    30%
    		Medium
    Data Center Business
    Overall data center contribution
    40-45%
    		Medium
    Order Inflow
    Data center order inflow
    rise
    		Medium
    Renewable Energy
    New projects
    up to 20 megawatt minimum
    		Medium
    Working Capital
    Debtor days
    80 days
    		Medium

    What to watch in Q1 FY26

    5

    Revenue Growth Achievement

    next quarter / future years
    CurrentFY25 Revenue: ₹160 crores
    Target25-30% CAGR

    Why it matters

    To verify if the company can achieve its stated conservative revenue growth targets after resolving cash flow issues.

    But in future, we will achieve at least a minimum of 30%-35% of the CAGR growth and also whatever our projections we will achieve. ... Not 40% to 45%, but conservatively, we 25%-30% of CAGR.

    Risks & concerns

    3
    RiskSeverity

    IPO delay and cash flow stoppage

    Delay in IPO from May to October 2024 led to 4-5 months of cash flow stoppage, causing the company to miss its revenue targets for FY25. — Management acknowledged

    high

    Increased debtors

    Debtors significantly increased in Q4 FY25 due to a large equipment supply for a ₹30-40 crore Bokaro project, impacting immediate cash flow, but collection is expected by July. — Analyst acknowledged

    medium

    Pricing pressure in EPC sector

    The company acknowledges pricing pressure from other turnkey EPCs but mitigates it by performing most activities in-house, reducing reliance on subcontracting. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Our target was Rs. 180 crores to Rs. 190 crores but due to the delay in the IPO and the fund management, so we have slightly down our actual target. We planned IPO in the month of the May, but actually due to the NSE delay and the procedures, we got fund in the month of October. So due to the 4-5 months cash flow stopped, we were not able to achieve our target.”

    Analyst questioned the significant drop in H2 results and margins; management attributed it to IPO-related cash flow issues.

    asked by Agastya Dave

    2 min read5 chapters

    Detailed Narrative

    01

    FY25 Performance and IPO Impact

    Lakshya Powertech achieved a revenue of ₹160 crores in FY25, an increase from ₹150 crores in FY24. However, the company's H2 FY25 results were significantly impacted by a delay in its IPO. The IPO, initially planned for May, was completed in October, leading to a 4-5 month cash flow stoppage. This disruption prevented the company from achieving its target revenue of ₹180-190 crores for FY25.

    02

    Order Book and Execution Outlook

    The company currently holds an order book of ₹275 crores. This includes ₹154 crores in the EPCC segment and ₹115 crores in the O&M segment. Management anticipates executing approximately ₹175-180 crores of this order book within the current financial year, providing strong revenue visibility. The company is also bidding for new oil and gas projects worth under ₹300 crores and is qualified to handle single orders up to ₹500 crores.

    03

    Strategic Expansion into Data Centers

    Lakshya Powertech is strategically expanding its focus on the data center sector, initially concentrating on power evacuation and fuel gas management systems. The company plans to invest ₹67 crores in a new manufacturing facility for acoustic panels, a key requirement for data centers. This expansion aims to increase the company's addressable market share in data center projects from the current 10-15% to an overall 40-45%, with significant order inflows expected from September onwards, targeting major clients like Amazon.

    04

    Renewable Energy and Margin Profile

    The company is also venturing into the renewable energy sector, with discussions underway to take up new projects of at least 20 megawatts from June. Lakshya Powertech aims to improve its overall PAT margin from the current 10% to a minimum of 11-12% in the coming years. This improvement is expected to be driven by a focus on higher-margin EPCC projects, particularly in data centers (16-18% PAT margin), compared to O&M services (6-8% PAT margin).

    05

    Working Capital Management and Liquidity

    The company experienced a sharp increase in debtors in Q4 FY25 due to a major equipment supply for a ₹30-40 crore Bokaro project in February-March. However, management expects these receivables to be collected by July. While operating cash flow was negative last year, it is projected to be positive in the current year. The company maintains sufficient working capital limits and plans to negotiate with bankers for enhancements if needed, without requiring additional public funds.

    This is an AI-generated summary of a publicly available earnings call transcript.