Lakshya Powertech (NSE-SME, listed Oct 2024) is a fresh IPO kid in the EPC sector. They do Engineering, Procurement, Construction, and Consultancy (EPCC) plus integrated O&M services. In FY25, they clocked ₹160 Cr sales, ₹16 Cr PAT, and now sit on an unexecuted order book of ₹262 Cr. At CMP ₹140, the stock has already fallen -29% in 6 months (post-IPO hangover), but still flaunts a juicy ROE of 25% and EV/EBITDA of just 7x. In short: fundamentals are tasty, but cash flow is spicier than their DG sets.
2. Introduction
EPC companies are like wedding planners for heavy industries. They don’t own the bride (assets), but they manage everything from stage design (engineering), catering (procurement), dhol wala (commissioning), to post-wedding hangovers (O&M).
Lakshya Powertech was incorporated in 2012 and only recently tapped the capital markets with a ₹49.9 Cr IPO in Oct 2024. Their business mix is balanced: EPC 44%, O&M 53%, Special Services 3%. That O&M chunk is important — it gives sticky annuity-like revenue while EPC gives lumpy project revenues.
But here’s the fun part: their top 5 customers account for 72% of revenue. One PSU tender delay, and profits can evaporate faster than diesel in an open drum.
So, reader poll: would you rather trust an EPC SME with high ROE and a fat order book, or play safe with L&T which at least won’t vanish after one bad quarter?
Commentary: Revenue is climbing, margins are stable, but profits dipped YoY due to higher costs. Still, at sub-10 P/E, market clearly pricing in risk of lumpy earnings.
5. Valuation (Fair Value RANGE only)
P/E Method: EPS ₹15.7 × Industry PE 22 = ₹250–₹300 FV.
EV/EBITDA Method: EV ₹164 Cr / EBITDA ₹23 Cr = 7x. Industry range 10–15x → FV range ₹200–₹280.
