1. At a Glance – The EPC Circus Nobody Warned You About
If Indian infrastructure had a reality show, Salasar Techno Engineering Ltd would be that contestant who looks like a future winner in the audition round… but keeps forgetting the choreography during live performance.
Here’s the drama:
- Revenue is growing like a government CAPEX budget.
- Order book is fat (~₹2,198 Cr).
- Clients include big names like PowerGrid, Airtel, DMRC.
And yet…
- Profit just fell 55% YoY in the latest quarter
- ROE is chilling at a sad 4.1%
- Interest coverage is barely 2x (basically “EMI tension mode”)
- Stock is still trading at ~52x earnings
So what’s happening here?
Is this:
- A hidden infra gem waiting for execution leverage, OR
- A classic EPC trap where revenue grows but shareholders get crumbs?
Welcome to the wild world of tender-based, steel-heavy, working-capital-hungry EPC businesses — where growth is loud, but profits whisper.
Now the real question:
👉 If revenue is ₹1,541 Cr but PAT is just ₹20 Cr… where exactly is the money going?
2. Introduction – The Great Indian Infrastructure Dream (With EMIs Attached)
India is building everything right now:
- Railways getting electrified
- 5G towers popping like pani puri stalls
- Transmission lines stretching across states
And companies like Salasar are supposed to be the “builders of Bharat”.
But here’s the catch.
Infrastructure EPC is like running a wedding catering business:
- You get paid late
- Costs keep increasing
- Clients (government) negotiate like it’s Chandni Chowk
And Salasar is right in the middle of this chaos.
On paper:
- Strong order book
- Government-backed contracts
- Growing revenues
But under the hood:
- Margins are falling
- Debt is creeping
- Cash flow is inconsistent
- Promoters are slowly reducing stake
And then… ED raid enters the chat in 2025 (no conclusions yet, but still… spicy).
So the company is not boring. It’s… eventful.
Let’s decode this step by step.
3. Business Model – WTF Do They Even Do?
Salasar is basically doing two businesses pretending to be one:
1. Manufacturing
- Telecom towers
- Transmission towers
- Steel structures
This is the “sell steel, earn money” side.
2. EPC (Engineering Procurement Construction)
- Build power lines
- Electrify railways
- Execute infra projects
This is the “win tender, pray for margin” side.
Simple Explanation (For Lazy Investors)
Think of Salasar like this:
“They make the steel structures AND also go install them… sometimes at fixed price contracts where steel price can ruin everything.”
Revenue Mix (9M FY25)
- Railway EPC → 35%
- Steel structures → ~21%
- Transmission EPC → ~4%
👉 Heavy EPC exposure = low margin + high risk
Key Strength
- Government-backed orders → payment assurance
- Large client base → Airtel, PowerGrid
