Table of content
Introduction
Founded in 2013, Sathlokhar Synergys E&C Global Limited (formerly known as Lohats Ventures Private Limited) specializes in engineering, procurement, and construction (EPC) services. They offer comprehensive design and build solutions for buildings and infrastructure facilities.
Brief about
Summary of the business
Sathlokhar Synergys is an integrated engineering, procurement and construction (“EPC”) (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. We are having experience in design and construction of various projects across 4 states in India i.e. Tamil Nadu, Karnataka, Uttar Pradesh and West Bengal.
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History
Company was originally incorporated as ‘Lohats Ventures Private Limited’ a private limited company under the Companies Act, 1956 at Chennai, Tamil Nadu, pursuant to a certificate of incorporation dated September, 13, 2013, issued by the Registrar of Companies, Tamil Nadu, Chennai, Andaman and Nicobar Islands (“RoC”). Thereafter, name of our Company was changed from ‘Lohats Ventures Private Limited’ to ‘Sathlokhar Synergys Private Limited’, consequent to name change, pursuant to a special resolution passed by the shareholders of our Company on July 10, 2014, and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on August 06, 2014. Thereafter, name of our Company was changed from ‘Sathlokhar Synergys Private Limited’ to ‘Sathlokhar Synergys E&C Global Private Limited’, consequent to name change, pursuant to a special resolution passed by the shareholders of our Company on December 23, 2023, and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on January 09, 2024. Thereafter, name of our Company was changed from ‘Sathlokhar Synergys E&C Global Private Limited’ to ‘Sathlokhar Synergys E&C Global Limited’, consequent to conversion of our Company from private to public company, pursuant to a special resolution passed by the shareholders of our Company on January 22, 2024 and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on February 15, 2024. Our Company’s Corporate Identity Number is U45400TN2013PLC092969.
Promoters & Board of Directors
- Mr. G Thiyagu and Ms. Sangeethaa Thiyagu are the Promoters of our company
Board of directors
| Name of director | Designation |
| Mr. G Thiyagu | Managing Director and CEO |
| Mr. Dinesh Sankaran | Non-Executive Director |
| Ms. Sangeethaa Thiyagu | Whole Time Director |
| Mr. B.Sivasubramanian | Whole Time Director |
| Mr. Vigneshwaran | Non-Executive Independent Director |
| Mr. R. Thanigaivelan | Non-Executive Independent Director |
| Mr. A. Muthu | Non-Executive Independent Director |
Share Holding pattern
| S.No | Name of the Shareholders | % of Holding |
| Promoters | ||
| 1. | Mr. G Thiyagu | 0.36 |
| 2. | Ms. Sangeethaa Thiyagu | 80.63 |
| Total Promoters Holding | 80.99 | |
| Promoter Group | ||
| 3. | Mr. T S Lokesh Krisna | 2.75 |
| 4. | Ms. T Harshitaa | 2.75 |
| Total Promoter Group Holding | 5.5 | |
| Public | 13.51 | |
Qualitative Factors
- Experienced Promoters having deep domain knowledge to scale up the business
- Diversified Clientele
- Management team having established track record
- Established track record of successfully completed projects
- In-house integrated model
- Strong order books
Strategy
- Geographical diversification
- Enhance attractiveness through quality execution, cost reduction and continuous training of manpower
- Design, Construct Warehouse & Industrial buildings as EPC contractors apart from Solar & MEP projects
- Further enhance our project execution capabilities
- Develop and maintain strong relationships with our clients
- Leverage core competencies with enhanced in-house integration
Industry Outlook
Infrastructure Sector in India
India’s high growth imperative in 2023 and beyond will significantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress.
Infrastructure is a key enabler in helping India become a US $26 trillion economy. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase efficiency and costs. Prime Minister Mr. Narendra Modi also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors.
The government’s focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and effective reforms in the sector, and has already shown a significant headway.
Infrastructure support to the nation’s manufacturers also remains one of the top agendas as it will significantly transform goods and exports movement making freight delivery effective and economical.
The “Smart Cities Mission” and “Housing for All” programmes have benefited from these initiatives. Saudi Arabia seeks to spend up to US$ 100 billion in India in energy, petrochemicals, refinery, infrastructure, agriculture, minerals, and mining.
The infrastructure sector is a key driver of the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from the Government for initiating policies that would ensure the time-bound creation of world-class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for India’s economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.
To meet India’s aim of reaching a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India’ and the production-linked incentives (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the country’s infrastructure spending has gone toward funding for transportation, electricity, and water, and irrigation.
While these sectors still remain the key focus, the government has also started to focus on other sectors as India’s environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness.
Indian Infrastructure Market Size
In Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which would be 3.3 per cent of GDP. As per the Union Budget 2023-24, a capital outlay of Rs.
2.40 lakh crore (US$ 29 billion) has been provided for the Railways, which is the highest ever outlay and about 9 times the outlay made in 2013-14. Starting with 6,835 projects, the NIP project count now stands at 9,142 covering 34 sub-sectors, as per news reports. Under the initiative, 2476 projects are under the development phase with an estimated investment of US$ 1.9 trillion. Nearly half of the under-development projects are in the transportation sector, and 3,906 are in the roads and bridges sub-sector.
The Indian Railways expects to complete total revenue of Rs. 2,64,500 crore (US$ 31.81 billion) by the end of 2023-24. India’s Logistics Market is estimated to be US$ 435.43 billion in 2023 and is expected to reach US$
50.52 billion by 2028, growing at a CAGR of 8.36%.India intends to raise its ranking in the Logistics Performance Index to 25 and bring down the logistics cost from 14% to 8% of GDP, leading to a reduction of approximately 40%, within the next five years.
In December 2022, AAI and other Airport Developers have targeted capital outlay of approximately Rs. 98,000 crore (US$ 11.8 billion) in airport sector in the next five years for expansion and modification of existing terminals, new terminals and strengthening of runways, among other activities. India currently has the fifth-largest metro network in the world and will soon overtake advanced economies such as Japan and South Korea to become the third-largest network. Metro rail network reached 810 kms and is operational in 20 cities as of September 2022.
At almost 20 kms, Mumbai monorail is the third largest route in the world after China with 98 kms and Japan with 28 kms.India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline’ in the next five years. In FY21, infrastructure activities accounted for 13% share of the total FDI inflows of US$ 81.72 billion.
Road Ahead for the Indian Infrastructure Sector
The government has also suggested an investment of $750 billion to strengthen railway infrastructure and envisioned the Maritime India Vision 2030 which estimates massive investments in world-class infrastructure development at Indian ports.
Global investment and partnerships in infrastructure, such as the India-Japan forum for development in the Northeast are also indicative of more investments. These initiatives come at a momentous juncture as the country aims for self-reliance in future-ready and sustainable critical infrastructure.
India, it is estimated, needs to invest $840 billion over the next 15 years into urban infrastructure to meet the needs of its fast-growing population. This investment will only be rational as well as sustainable, if we additionally focus on long-term maintenance and strength of our buildings, bridges, ports and airports.
The market size of the Indian Infrastructure Sector is expected to grow from US$ 186.24 billion in 2023 to US$ 294.12 billion by 2028, representing a compound annual growth rate (CAGR) of 9.57%.
Business Data
Verticals
Engineering, procurement, and construction (EPC) services of below mentioned
- Industrial
- Commercial
- Institutional
- Resort
- MEP Projects
- Solar projects
Revenue contribution from Geography presence
State wise Revenue bifurcation:
| State | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
| Revenue | % of Revenue | Revenue | % of Revenue | Revenue | % of Revenue | |
| Tamil Nadu | 5766.95 | 23.35 | 8632.38 | 99.1 | 5486.03 | 93.78 |
| Karnataka | 15704.12 | 63.58 | – | – | ||
| Uttar Pradesh | 3192.32 | 12.92 | – | – | ||
| Pondicherry | 33.98 | 0.14 | 78.53 | 0.90 | 362.66 | 6.20 |
| Total | 24697.37 | 100 | 8710.91 | 100 | 5848.68 | 100 |
Customer dependency
- Sathlokhar Synergys top ten customers contribute 89.20%, 80.11% and 77.55% of our total sales for the Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.
Supplier dependency
- Sathlokhar Synergys top ten suppliers contribute 45.88%, 40.90% and 53.92% of our total purchase for the Fiscal 2024, Fiscal 2023 and Fiscal 2022 respectively.
Competition
Sathlokhar Synergys operate in a highly competitive market and there are large numbers of players. We operate in the competitive environment; quality of service and price are the main factor for client in making decision to have our services. We may face competition from our peers who have similar one or more division of our business. Competition emerges not only from small but also from regional and national players. The business experience of Promoters and support of management team has enabled us to provide quality work in response to customer’s demand for best quality at a reasonable price. Moreover, there are minimal entry barriers in this industry would further intensify competition.
Peer companies comparison
| Name of the Company | Face Value (₹) | Current Market Price | EPS (₹) | P/E Ratio | RoNW (%) | Net Asset Value Per Share | Total Income (₹ in Lakhs) | |
| Basic | Diluted | |||||||
| Sathlokhar SynergysE&C Global Limited | 10.00 | 140 | 3.12 | 3.12 | 44.87 | 38% | 71.58 | 8,715.66 |
| Peer Group | ||||||||
| K2 Infragen Limited | 10.00 | 145.95 | 18.02 | 15.38 | 9.49 | 81% | 62.04 | 7,490.08 |
| Suraj Estate Developers Limited | 10.00 | 392.65 | 10.1 | 10.1 | 38.88 | 45% | 225.24 | 30,789.00 |
| SRM Contractors Limited | 10.00 | 200.1 | 90.82 | 90.82 | 2.20 | 30% | 37.72 | 30,065.09 |
Group companies
- M/s Sathlokhar Industries Private Limited
Business risk factors
- Sathlokhar Synergys business is majorly concentrated in the state of Tamil Nadu and Karnataka and we are exposed to risks emanating from economic, regulatory and other changes in the state of Tamil Nadu and Karnataka.
- March 31, 2024, Company derives about 64 % of its total revenue from operations in the state of Karnataka and about 23% of its total revenue from the state of Tamil Nadu.
- Sathlokhar Synergys derive a significant portion of our revenues from a limited number of clients. The loss of any significant clients may have an adverse effect on business, financial condition, results of operations, and prospect.
- Sathlokhar Synergys top ten customers contribute 89.20%, 80.11% and 77.55% of our total sales for the Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.
- The Company is dependent on few suppliers for purchase of product. Loss of any of these large suppliers may affect business operations.
- Sathlokhar Synergys top ten suppliers contribute 45.88%, 40.90% and 53.92% of our total purchase for the Fiscal 2024, Fiscal 2023 and Fiscal 2022 respectively.
Financials
Key Financial Ratios
| Particulars | 2024 | 2023 | 2022 |
| Current Ratio | 1.57 | 1.41 | 1.21 |
| Debt-Equity Ratio | 0 | 0.43 | 0.76 |
| Debt Service Coverage Ratio | 109.44 | 7.24 | 2.58 |
| Return on Equity Ratio | 0.96 | 0.47 | 0.10 |
| Trade Receivables Turnover Ratio | 22.81 | 12.04 | 10.27 |
| Trade Payables Turnover Ratio | 7.06 | 3.58 | 3.67 |
| Net Capital Turnover Ratio | 6.42 | 6.65 | 5.68 |
| Net Profit Ratio | 10.61% | 6.26% | 1.50% |
| Return on Capital Employed | 87.82% | 41.07% | 11.14% |
Key Performance Indicators
(Amount in Lakhs, except EPS, % and ratios)
| Key Financial Performance | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Revenue from Operations | 24,697.37 | 8,710.91 | 5,848.68 |
| Growth in revenue from operations (%) | 183.52% | 48.94% | 80.28% |
| Total Income | 24,732.09 | 8,715.66 | 5,851.51 |
| EBITDA | 3,572.45 | 837.32 | 176.49 |
| EBITDA Margin (%) | 14.44% | 9.61% | 3.02% |
| Restated profit for the period/year | 2,621.43 | 545.55 | 87.87 |
| Restated profit for the period/year Margin (%) | 10.61% | 6.26% | 1.50% |
| Return on Net Worth | 64.68% | 38.11% | 9.92% |
| Return on Average Equity (“RoAE”) (%) | 95.59% | 47.08% | 10.28% |
| Return on Capital Employed(“RoCE”)(%) | 87.33% | 40.56% | 10.87% |
| Debt- Equity Ratio | 0.00 | 0.43 | 0.76 |
Balance Sheet
(Amount in Lakhs)
| Particulars | March 31, 2024 | March 31, 2023 | March 31, 2022 |
| EQUITY AND LIABILITIES | |||
| SHAREHOLDERS’ FUND | 4053.08 | 1431.65 | 886.10 |
| NON – CURRENT LIABILITIES | 50.15 | 39.96 | 62.70 |
| CURRENT LIABILITIES | 6379.35 | 3310.67 | 3678.97 |
| TOTAL | 10482.58 | 4782.28 | 4627.77 |
| ASSETS | |||
| NON – CURRENT ASSETS | 465.66 | 126.41 | 176.32 |
| CURRENT ASSETS | 10016.92 | 4655.87 | 4451.45 |
| TOTAL | 10482.58 | 4782.28 | 4627.77 |
Profit & Loss
(Amount in Lakhs)
| Key Financial Performance | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Revenue from Operations | 24,697.37 | 8,710.91 | 5,848.68 |
| Growth in revenue from operations (%) | 183.52% | 48.94% | 80.28% |
| Total Income | 24,732.09 | 8,715.66 | 5,851.51 |
| EBITDA | 3,572.45 | 837.32 | 176.49 |
| EBITDA Margin (%) | 14.44% | 9.61% | 3.02% |
| Restated profit for the period/year | 2,621.43 | 545.55 | 87.87 |
| Restated profit for the period/year Margin (%) | 10.61% | 6.26% | 1.50% |
Cash Flow
(₹ in Lakhs)
| Particulars | FY 2024 | FY 2023 | FY 2022 |
| Net cash (used in)/ generated from operating activities | 1216.90 | 300.26 | (121.06) |
| Net cash generated from/ (used in) Investing Activities | (346.44) | (38.16) | (3.60) |
| Net cash generated from/ (used in) Financing Activities | (628.99) | (150.46) | 231.27 |
Capital structure
(₹ in Lakhs)
| Particulars | Pre-Issue as on March 31,2024(Amount in ₹) |
| Borrowings: | |
| Short term borrowings | 7.92 |
| Long term borrowings | – |
| Total Borrowings | 7.92 |
| Shareholders’ fund (Net worth) | |
| Share capital | 199.99 |
| Other Equity | 3853.09 |
| Less: Revaluation Reserves | – |
| Total shareholders’ fund (Net worth) | 4053.08 |
| Long term borrowings / shareholders’ fund (Net worth) ratio | 0.00 |
| Total borrowings / shareholders’ fund (Net worth) ratio | 0.00 |
SWOT ANALYSIS
- Strengths:
- Rising Net Cash Flow and Cash from Operating Activity: The company has seen significant improvements in its net cash flow and operating cash flow over the last few years.
- Annual Profit Growth: Sathlokhar Synergys E&C Global Ltd. has achieved higher annual profit growth compared to its sector.
- Effective Capital Utilization: The company is efficiently using its capital to generate profits, with an improving Return on Capital Employed (RoCE).
- Low Debt: Sathlokhar Synergys E&C Global Ltd. maintains a low debt level, which is favorable for financial stability.
- Net Cash Generation: The company has been consistently generating net cash, with improvements over the past two years.
- Annual Net Profits: Sustained growth in annual net profits.
- Book Value per Share: The book value per share has been on an upward trend.
- Efficient Asset Management: The company effectively manages its assets to generate profits, as indicated by improving Return on Assets (ROA).
- Shareholders’ Equity: The return on equity (ROE) has shown improvement over the last two years.
- Weaknesses:
- No specific weaknesses were identified in the available data.
- Opportunities:
- Unfortunately, there are no specific opportunities mentioned in the available information.
- Threats:
- No specific threats were identified in the available data.
IPO Details
Sathlokhar Synergys E&C Global IPO Details
| Feature | Details |
|---|---|
| IPO Type | Book Built Issue |
| Issue Size | ₹92.93 Crores |
| Issue Type | Fresh Issue |
| No. of Shares | 66.38 Lakh Shares |
| Issue Price | ₹133 – ₹140 per share |
| Minimum Order Quantity | 1000 Shares |
| IPO Open Date | July 30, 2024 |
| IPO Close Date | August 1, 2024 |
| Allotment Date | August 2, 2024 (Expected) |
| Listing Date | August 6, 2024 (Tentative) |
| Exchange | NSE SME |
| Registrar | Purva Sharegistry India Pvt Ltd |
Object of the issue
(₹ in lakhs)
| Particulars | Amount |
| Working Capital | Upto 7300.00 |
| General Corporate Purposes* |
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