Oval Projects IPO

The company is ISO 14001:2015 certified for environmental management systems, ISO 45001:2018 certified for occupational health and safety management systems, and ISO 9001:2015 certified for quality management systems.

The company claims to have operations in more than 10 states across India, with a strong presence in the northeastern region. The company’s client base includes established public sector enterprises in the oil and gas industry, as well as central and state government bodies, including those supported by international financing organisations in the infrastructure sector.

The company claims to have completed more than 30 projects in the oil & gas and special projects segments, with a total value of approximately Rs 20,362.74 crore. It further states that its execution capacity has improved significantly, enabling it to handle larger projects and manage multiple assignments at the same time.

The company claims to be continuously working on improving its execution processes, enhancing employee skills, and modernising its plant and machinery to maximise efficiency. The company further states that it regularly reviews procurement policies and project execution methods to address bottlenecks and ensure optimal use of resources.

The company claims that with its in-house teams for design, engineering, procurement, and construction, it is well-positioned to deliver large and complex projects. This end-to-end capability allows it to complete projects at competitive costs while benefiting from economies of scale through an efficient supply chain.

Over the past few years, the company has observed a consistent growth in its revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 59.02 crore in FY23 to Rs 77.96 crore in FY24 to Rs 102.29 crore in FY25. PAT increased from Rs 3.18 crore in FY23 to Rs 4.40 crore in FY24 and Rs 9.33 crore in FY25.

The company reported negative cash flows from operating activities amounting to Rs 16.07 crore in FY25 and Rs 1.13 crore in FY24. This was mainly due to an increase in trade receivables and short-term advances. However, if cash outflows continue to exceed inflows, the company may face liquidity challenges in the future.

The company derives a significant portion of its revenue from government entities, including state and central government bodies. They accounted for Rs 92.23 crore (90.17 percent) of the company’s total revenue in FY25, Rs 60.60 crore (77.73 percent) in FY24, and Rs 50.78 crore (91.06 percent) in FY23. Any reduction in budget allocations, changes in government policies, or delays in awarding projects to the company could negatively affect business performance. Also note that, if such contracts are terminated, compensation is generally provided, but recovery often takes time and may not fully cover incurred costs.

The cost of materials consumed accounted for Rs 63.52 crore (70.25 percent) of the company’s total expenses in FY25, Rs 52.74 crore (73.20 percent) in FY24, and Rs 42.94 crore (71.92 percent) in FY23. Any sudden increase in the price of such raw materials, and if the company is unable to pass on these cost increases to its customers, it could adversely affect its financial condition and cash flows.

The company’s top 5 suppliers accounted for Rs 22.19 crore (43.08 percent) of the company’s total cost of material consumed in FY25, Rs 26.62 crore (38.25 percent) in FY24, and Rs 21.36 crore (42.18 percent) in FY23. Any disruption in supplies from one or more of these suppliers could adversely affect the company’s business and finances.

The company’s top 5 customers accounted for Rs 60.30 crore (58.95 percent) of the company’s total revenue in FY25, Rs 42.74 crore (54.82 percent) in FY24, and Rs 33.73 crore (57.15 percent) in FY23. If the company fails to secure repeat projects from these clients or is unable to retain them, it could adversely affect the company’s operations and financial stability.

The company derives a significant portion of its revenue from 2 sectors: Oil and gas infrastructure projects and specialised infrastructure projects. The oil and gas infra projects accounted for Rs 47.20 crore (46.15 percent) of the company’s total revenue in FY25, Rs 48.04 crore (61.62 percent) in FY24, and Rs 42.23 crore (71.56 percent) in FY23. Specialised infrastructure projects accounted for Rs 51.21 crore (50.06 percent) of the company’s total revenue in FY25, Rs 27.42 crore (35.17 percent) in FY24, and Rs 15.17 crore (25.71 percent) in FY23. If the company fails to expand/diversify its business into other sectors, such as operating and maintenance, or fails to secure projects from the specific sectors or any adverse developments in the government policies or funding, it could adversely affect the company’s operations and finances.

As of FY25, the company reported contingent liabilities of Rs 60.45 crore. If any of these contingent liabilities materialise, it could harm the company’s financial performance.

The company witnessed a sharp increase in its trade receivables. The outstanding receivables increased to Rs 4.93 crore in FY25 from Rs 0.49 crore in FY24. A considerable portion of these receivables has remained outstanding for more than six months. Any failure to collect these receivables on time or at all can negatively impact the business and its financial condition.

Many of the company’s EPC contracts are signed with government bodies, where the terms are usually predetermined and favour the government. These contracts may be terminated prematurely, and restrictions may be imposed on the company’s ability to secure future projects. Such circumstances, which are largely beyond the company’s control, could harm operations and financial results.

The company, its promoter, and directors are involved in certain ongoing legal cases, including criminal and tax-related proceedings. Any adverse judgment in any of these cases could be detrimental to the company’s business prospects.

As of FY25, the company reported total indebtedness of Rs 104.40 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.