Vikran Engineering’s INR 772 crore IPO, opening from 26–29 August 2025, has drawn attention because of its strong order book, robust margins, and marquee investors like Ashish Kacholia and Mukul Agrawal. But before you apply, Vikran Engineering IPO analysis provides you with five key factors to evaluate:
1. Business Model & Sector Exposure
Vikran Engineering is a diversified EPC player active in power transmission & distribution, water infrastructure, railway electrification, solar EPC and smart metering. Unlike many niche contractors, it spreads risk across multiple government-backed sectors like Jal Jeevan Mission, Revamped Distribution Scheme and railway electrification.
🔎 Investor View: Diversification reduces dependency on one segment and provides steady revenue visibility. Exposure to infrastructure sectors with high government spending is a positive long-term driver.
2. Financial Strength & Margins
- Revenue Growth: INR 524 Cr (FY23) → INR 786 Cr (FY24) → INR 916 Cr (FY25)
- Net Profit: INR 43 Cr → INR 75 Cr → INR 78 Cr
- EBITDA Margin: 17.5% in FY25 (highest among peers)
- Debt/Equity: Improved to 0.58 in FY25 from 1.18 in FY23
- IPO proceeds of INR 541 Cr are earmarked for working capital, further easing liquidity.
🔎 Investor View: Consistent growth, healthy margins and reducing leverage show strong execution capacity. However, EPC businesses remain working-capital intensive, which can strain cash flows in case of project delays.
3. Vikran Engineering IPO: Order Book Visibility
As of 30 June 2025:
- Completed Projects: 45 worth INR 1,920 Cr
- Ongoing Projects: 44 worth INR 5,120 Cr across 16 states
- Pending Order Book: INR 2,420 Cr (≈2.6x FY25 revenue)
🔎 Investor View: Strong order book ensures 2–3 years of revenue visibility – a key factor in evaluating EPC players. Execution capability will determine if this backlog translates into sustained earnings growth.
4. Vikran Engineering IPO: Valuation vs Peers
At the upper band (INR 97), valuations are:
- EPS (Post-Issue): INR 3.02
- P/E: 30.5–32.1x
- P/BV: 3.8x
- EV/EBITDA: ~13–14x
Peer Lens:
- In line with Kalpataru (31x)
- Lower than Techno Electric (40x)
- Far below Bajel Projects (188x)
- Margins superior to most peers (EBITDA 17.5% vs Kalpataru 8.2%, KEC 6.9%)
🔎 Investor View: Valuations are fair, justified given profitability leadership. Investors should not expect a heavy listing discount, but can see value in long-term positioning.
5. Vikran Engineering IPO: Risks
- Working Capital Intensity: Receivables stood at 190 days of sales in FY25 (168 days in FY24). Projections suggest ~170 days even in FY26–27. Margin money deposits (15–20% of contract value) further strain liquidity.
- Government Dependence: Majority of revenue tied to state/central schemes; any policy delays could impact cash flows.
- Execution Risk: Contracts can be terminated by clients; termination payments, even if contractually due, may not cover costs.
High receivable days and dependence on government projects are real headwinds that investors must not ignore.
Final Word
Vikran Engineering combines diversification, a healthy order book, margin leadership, and marquee investors with fair valuations. It is not a “quick listing pop” IPO, but a medium to long-term infra bet for investors who believe in India’s infrastructure push.
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