Vishnu Prakash R Punglia Limited

Vishnu Prakash R Punglia Limited experienced a challenging Q4 FY25, with revenue from operations declining by 38% YoY to ₹405 crores. EBITDA for the quarter fell by 57% YoY to ₹46 crores, resulting in an EBITDA margin of 11.26%. Net profit saw a significant drop of 76% YoY to ₹16 crores, with a PAT margin of 4%. For the full fiscal year 2025, revenue decreased by 16% YoY to ₹1,237 crores, and net profit was down 52% YoY to ₹59 crores, with a PAT margin of 4.74%. This underperformance was primarily attributed to persistent payment delays.

A major factor contributing to the revenue decline and profitability pressure was the persistent delay in payments, particularly from projects under the Jal Jeevan Mission. Management highlighted that approximately 70-75% of the company's ₹735 crores in receivables for FY25 are stuck in water supply-related projects. These delays have led to significant working capital pressure, increased finance costs, and necessitated an additional provision of ₹30 crore for Expected Credit Loss (ECL), further impacting the company's profitability.

Despite the operational challenges, VPRPL successfully secured new orders worth ₹1,851 crores during FY25, with ₹1,134.05 crores specifically from railway schemes. As of March 31, 2025, the total order book stands at a robust ₹5,362 crores, providing strong revenue visibility for the next three years. The company also maintains a healthy bidding pipeline of ₹4,500 crores, with an average success ratio of 16%, indicating potential for continued order inflow.

Management expressed optimism for FY26, anticipating a significant improvement in execution and stabilization of efficiency. They project a minimum revenue growth of 10-15% for the fiscal year and expect EBITDA margins to be better than FY25, potentially around 13% after adjusting for the ECL provision. This positive outlook is underpinned by the government's extension of the Jal Jeevan Mission and a focus on infrastructure development, particularly in railways and Namami Gange, with expectations of payment normalization within the next two quarters.

VPRPL is actively pursuing diversification beyond its traditional water supply projects. The company is involved in EPC projects for the central and state governments, state-owned enterprises, and public sector undertakings. They are currently working on railway projects, through BHEL for NTPC, and for Coal India. Management is also exploring opportunities in the Namami Gange Mission and considering entry into Effluent Treatment Plant (ETP) and Common Effluent Treatment Plant (CEPT) projects, indicating a strategic move to broaden its project portfolio and mitigate risks associated with single-sector dependencies.