Parth Electricals IPO

Parth Electricals claims to have worked with more than 100 clients. Its customer base includes clients such as Aditya Birla, Ultratech Cement, L&T, Reliance Industries, Adani, Tata Power, Schneider Electric, Bharat Heavy Electrical Limited (BHEL), Tata Steel, Siemens, Gujarat Fluorochemicals Limited (GFL), and Jindal Steel & Power.

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

The company states that it sources critical raw materials directly from Schneider Electric Infrastructure, while other components are procured from specialised suppliers. The company further claims that it has a structured supply chain system and strong vendor relationships that help ensure timely deliveries.

Parth Electricals claims to be a licensed partner of Schneider Electric and states that it has been authorised to manufacture, assemble, test, and sell ring main units and compact substations based on Schneider’s type-tested designs and transferred technology.

The company claims that it has the required knowledge about Indian Standards (IS) and International Electrotechnical Commission (IEC) standards relevant to its products. The company also states that it operates an in-house quality assurance (QA) lab, which functions as an independent testing unit.

Over the years, the company has observed a consistent increase in its revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 65.53 crore in FY23 to Rs 86.78 crore in FY24 to Rs 174.67 crore in FY25. PAT increased from Rs 2.45 crore in FY23 to Rs 4.61 crore in FY24 and Rs 10.12 crore in FY25.

The company depends heavily on demand from the electrical industry for a major share of its revenue. Any slowdown in the power generation and distribution sector, or a failure to boost sales efficiently, could negatively affect the company’s business and financial performance.

The company’s top 5 customers accounted for Rs 117.88 crore (67.49 percent) of total revenue in FY25, Rs 44.14 crore (50.87 percent) in FY24 and Rs 36.52 crore (55.73 percent) in FY23. Any loss of any of these customers or a decline in demand from them could adversely affect the company’s operations and financial condition.

The company’s revenue is significantly dependent on the sales of one product - the ring main unit. More than 50 percent of the company’s total sales are derived from this product. Any sudden decline in demand for RMU could adversely affect the company’s financial performance.

The company derives a significant portion of its revenue from 3 regions, namely Gujarat, Odisha and Uttar Pradesh, out of which Gujarat is the highest contributor. Gujarat accounted for Rs 158.80 crore (90.92 percent) of the company’s total revenue in FY25, Rs 51.75 crore (59.63 percent) in FY24 and Rs 26.39 crore (40.27 percent) in FY23. Odisha accounted for Rs 10.28 crore (5.88 percent) of the company’s total revenue in FY25, Rs 7.17 crore (8.27 percent) in FY24 and Rs 7.46 crore (11.38 percent) in FY23. Uttar Pradesh accounted for Rs 1.11 crore (0.63 percent) of the company’s total revenue in FY25, Rs 4.24 crore (4.89 percent) in FY24 and Rs 14.41 crore (21.99 percent) in FY23. Any adverse social, political or economic developments in these regions could negatively impact the company’s operations and finances.

All of the company’s manufacturing operations take place at a single facility in Manjusar, Vadodara. Therefore, any adverse developments in this region could negatively impact the company’s operations and affect its financial condition.

The company recorded negative cash flows from investing activities amounting to Rs 10.45 crore in FY25, Rs 7.69 crore in FY24 and Rs 0.92 crore in FY23. Additionally, negative cash flow from financing activities amounted to Rs 1.69 crore in FY23. If cash outflows continue to exceed inflows, the company may face liquidity challenges in the future.

The company’s top 5 suppliers accounted for Rs 96.06 crore (67.37 percent) of the company’s total sales percentage in FY25, Rs 44.05 crore (69.15 percent) in FY24 and Rs 21.66 crore (39.63 percent) in FY23. Any disruption in supplies or any loss of any of these suppliers could adversely affect the company’s business and finances.

As of FY25, the company’s trade receivables amounted to Rs 25.37 crore, a slight increase from Rs 24.87 crore in FY24. Any failure to collect these receivables on time or at all can negatively impact the business and its financial condition.

The company is currently involved in certain tax-related legal proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s reputation and business prospects.

The company has contingent liabilities as of FY25 amounting to Rs 29.61 crore. If any of these contingent liabilities materialise, it could harm the company’s financial performance.

As of FY25, the company’s total fund-based borrowings amounted to Rs 30.75 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.