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Om Infra Ltd Management Discussions

128.66
(3.53%)
Oct 10, 2025|12:00:00 AM

Om Infra Ltd Share Price Management Discussions

For the Fiscal Year Ended March 31, 2025

OM INFRA LIMITED (hereinafter referred to as "the Company") is a leading listed entity engaged in the specialized field of civil construction, with a primary focus on the development, construction, and maintenance of dams and their associated gate systems. This Management Discussion & Analysis (MD&A) provides a comprehensive overview of our operational and financial performance for the fiscal year ended March 31, 2025, along with insights into the industry landscape, future outlook, and key risks.

Overview and Business Highlights

The fiscal year 2025 has been a period of strategic consolidation and focused execution for Om Infra Limited. Despite global economic headwinds and geopolitical uncertainties, the Indian civil construction sector, particularly in infrastructure, has demonstrated resilience driven by robust government spending and a strong pipeline of projects. Our specialized expertise in dam and gate construction positions us favorably to capitalize on the nations increasing focus on water resource management, irrigation, and hydropower generation.

The Company has successfully completed more than 70 projects, some of the significant projects are: Kurichu H.E. project, Bhutan, Upper Krishna project, Almatti Dam. Om Infra wins project worth Rs 410 crores (incl. taxes ) in J&K and Rs 448(incl. taxes) crores in UP. We continued to strengthen our order book with new contracts, reflecting sustained demand for our niche services and our strong reputation for quality and timely execution. Our commitment to sustainable practices and technological adoption remained a cornerstone of our operations, enhancing efficiency and project delivery.

Industry Structure and Developments

The civil construction sector in India continues to be a pivotal driver of economic growth, fuelled by significant government investments in infrastructure development. For the fiscal year 2024-2025, the industry witnessed sustained momentum, particularly in critical areas such as water resource management, rural infrastructure, and urban development.

• Dam & Dam Gates Construction and Maintenance: This segment remains crucial for water security, irrigation, and power generation. Government initiatives focusing on sustainable water management and modernization of existing infrastructure provided a stable pipeline of projects. The emphasis on climate resilience and efficient water utilization continued to drive demand for new construction and rehabilitation of aging dams and their associated gate mechanisms.

The dam and water infrastructure segment, our core area, is particularly influenced by:

• Government Focus: Continued emphasis on water security, irrigation expansion (e.g., Pradhan Mantri Krishi Sinchai Yojana), flood control, and hydropower projects by both central and state governments. The Union Budget 2024-25 continued to allocate substantial funds towards infrastructure development, including water resources. The Indus water treaty in abeyance has opened up the opportunity for new dams in the J&K region.

• Aging Infrastructure: A significant number of existing dams and water infrastructure in India are aging, necessitating extensive repair, rehabilitation, and modernization work, including the replacement of old gate systems. This presents a substantial and consistent opportunity for the Company.

• Technological Advancements: Adoption of Building Information Modeling (BIM), drone technology for surveys and monitoring, advanced construction materials, and automation in gate manufacturing and installation are transforming project execution, enhancing precision, and improving safety.

• Competitive Landscape: The sector remains competitive, with both large domestic players and international firms vying for major projects. Our competitive advantage lies in our specialized expertise, proven track record, and strong relationships with key public sector clients.

• Regulatory Environment: Projects are subject to stringent environmental clearances, land acquisition procedures, and safety regulations. Navigating these complexities efficiently is crucial for project timelines and profitability.

The Indian construction market is projected to reach INR 25.31 trillion by 2025, growing at an annual rate of 11.2%. While the overall construction market is robust, the civil engineering segment, which includes dam construction, is expected to see steady, albeit slightly lower, growth rates compared to the residential sector, primarily driven by government infrastructure spending.

• Jal Jeevan Mission (JJM): The flagship program aimed at providing tap water connections to all rural households continued its aggressive rollout. This mission presented substantial opportunities for companies engaged in water supply infrastructure, including pipeline laying, water treatment plants, and related civil works. The focus remained on timely execution and quality assurance to meet national targets.

• Real Estate Development: The real estate sector experienced a mixed but generally positive trend. While residential demand in tier-1 and tier-2 cities showed resilience, supported by favorable interest rates and government incentives, commercial and industrial real estate also saw steady growth driven by economic expansion and manufacturing initiatives. Sustainable and smart city concepts continued to influence development patterns.

Om Infra Limited with its diversified expertise across these vital segments, is strategically positioned to capitalize on these growth opportunities. Our integrated approach, combining engineering prowess with project management capabilities, allows us to undertake complex projects and contribute significantly to national development goals.

Building Blocks of Om Infra

RESILIENT BUSINESS MODEL

Hydro Projects Pumped Storage Projects Hydro Mechanical Equipment
Providing end to end solution- from river identification to clean water in every tap It is one of the leaders in pumped storage solutions, accelerating the shift to renewable energy Value Chain - Inspection of the Vjfip project, procuring raw material, manufacturing equipment, erection and installation
20% of the order book comprises of JJM Governments Current capacity: 4.7 GW, with potential to reach 176 GW - big opportunities for the company Companys turnover from Engineering was USD 25 million, next target is USD 50 million
Projects - Nokha Water Supply Project. Khajuwala Water Supply Project, State Water Supply and Sanitation Executing one of the Largest PSPs : Kundah Pumped Storage Project in India In House Manufacturing of - Gates, Hoist. Cranes etc

2. Opportunities and Threats Opportunities:

• Government Thrust on Infrastructure: Continued high budgetary allocations for infrastructure, including water resources, rural development, and urban housing, provide a robust project pipeline.

• JJM Phase II & Beyond: The ongoing success and potential expansion of the Jal Jeevan Mission, along with other similar water infrastructure schemes, offer longterm growth prospects.

• Modernization of Existing Infrastructure: The need for rehabilitation and upgrades of aging dams and water infrastructure presents recurring maintenance and renovation opportunities.

• Affordable Housing Initiatives: Government support for affordable housing and smart city projects drives demand in the real estate sector.

• Technological Adoption: Increasing adoption of advanced construction technologies (e.g., BIM, prefabrication, sustainable materials) can enhance efficiency, reduce costs, and improve project delivery.

• Budget allocation to the Ministry of Jal Shakti

Department

2024-25 2025-26(RE)

A. Drinking Water and Sanitation

29,917 74,226

• JJM

22,694 67,000

• SBM-G

7,192 7,192

B. Water Resources

21,641 25,277

• PMKSY

6,621 8,260

• River Linking

3,000 3,400

• Namami Gange

2,000 2,400

• ABY

600 1,780

Sectoral Tailwinds: Government?s focus on Hydro sector Hydropower Projects

• The hydropower capacity to increase from 42 GW to 67 GW by 2031-32.

• 12,340 MW is planned by 2026

• 450 GW renewable energy capacity by 2030

River Linking and Irrigation

• Rs 2,400 crores has been allocated to river linking in Union Budget

• US $270 billion to be invested in water infra in the next 15 years

• River Linking Projects- Namami Gange, Pradhan Mantri Sichai Yojana.

Hydro Pumped Storage Projects

• Aim to install 74 GW capacity by 2031-32

• Potential to reach 176 GW PSPs in the coming years.

• Hydro Pumped Storage Projects (PSPs) to support faster energy transition with large scale integration of renewable capacity

Company?s Leveraging opportunities

• Executing the largest PSP projects in India , the Kundah PSP (1,000 MW)

• The unexecuted value of Kundah project is worth Rs 50 crores as 31st March 2025

Threats:

• Project Delays and Cost Overruns: Large-scale civil projects are susceptible to delays due to land acquisition issues, regulatory hurdles, environmental clearances, and unforeseen geological conditions. This can lead to cost escalations and impact profitability

• Intense Competition: The presence of numerous players, including large domestic and international firms, leads to competitive bidding and pressure on profit margins.

• Regulatory and Environmental Clearances: Delays in obtaining necessary approvals can impact project timelines and costs.

• Raw Material Price Volatility: Fluctuations in prices of key construction materials (cement, steel, aggregates) can affect project profitability.

• Skilled Labour Shortage: Availability of skilled labor and specialized personnel remains a challenge, potentially impacting project execution.

• Economic Slowdown: Any unforeseen economic downturn or liquidity crunch could impact project funding and demand.

• Climate Change Risks: Increased frequency of extreme weather events can pose risks to project sites and ongoing operations, especially in dam construction and maintenance.

3. Segment-wise Performance

A. Engineering Division:

• Performance: This segment demonstrated stable performance, driven by ongoing projects and new tenders from central and state water resource departments. Our expertise in complex hydraulic structures and specialized engineering solutions allowed us to secure key contracts.

• Key Highlights (FY 2024-2025):

The Company secured the following orders under the Financial Year under review -

1. Order win worth Rs 448(incl. taxes) crores in UP from Uttar Pradesh Jal Nigam (Rural) for Survey, design DPR preparation, procurement and construction to ensure the full functionality of defunct, partial operative Rural Water SupplySchemes, including trial run and comprehensive O&M for 10 years for fully functional schemes.

Name of Project

(i) Moradabad Circle (Dist. Amroha and Sambhal)

(ii) Lucknow Circle (Dist. Hardoi, Lakhimpur Khiri, Sitapur & Lucknow)

2. Om Infra wins project worth Rs 410 crores (incl. taxes ) in J&K- KWAR Hydropower Project (540 MW)Under Chenab Valley Project for complete Hydro Mechanical engineering from design to installation.

MAJOR HYDRO PROJECTS BY OM INFRA LIMITED

Major Hydro Projects Under Execution

Showcasing Engineering Excellence: Major Hydro Projects by Om Infra

Koldam Hydro Flertrir Project

• 800 MW project

• Installation and commissioning work of one of the largest vertical lift gates in the world

Gasiklnird Dam -Project

• Executed of one of the largest radial gates in the world

? In a large quantity (33 gates]

MARQUEE ONGOING PROJECTS

Kundali Pump Storage Project

Order received of Rs 142 crores 5* Client - Govt, of Tamil Nadu Location- Niligiri Amravati Irrigation Project

Order received of Rs 240 crores > Client - Govt of Maharashtra P Location- Amravati Shapurkandi Power Project

Order received of Rs 554 crores > Client - WRD Punjab Location- Pathankot State Water Supply and Sanitation Mission, U. P.

Order received of Rs 1,300 crores

Client - State water and sanitation mission Location- UP

Major Hydro Projects Under Execution

With diverse products and niche services Om Infra is making a difference

Hydro power Projects

Pumped Storage Projects

Water & waste water treatment plants

Irrigation systems

• Outstanding Orderbook Value Rs 2,655.75 Cr as at 31st March 2025

Project

Client

Location

Unexecuted (Rs Cr)

Jal Jeevan Mission (JJM)

541
-Uttar Pradesh SWSM - Namami Gange and Rural Water Supply Dept. Uttar Pradesh 541.00

Hydro and Water

2114.75
- Shapurkandi Power Project WRD Punjab Pathankot 225.79
- Isarda Dam Irrigation Project Govt. of Rajasthan Tonk 82.56
- Amravati Irri gation Project Govt. of Maharashtra Amravati 108.53
- Arun 3 Hydroelectric Project, Nepal SJVN Limited Sankhuwasabha 51.84
- Kunda Pumped Storage Power Project (including sub-contract from Patel Engineering) Govt. of Tamil Nadu Niligiri 49.78
- Manipur Barrage and Others Manipur State Manipur 34.82
- Kutchh Canal Power Project, SSNNL Govt. of Gujarat Kachchh 1.85
- Rwanda Irrigation Rwanda Irrigation Board Africa Rwanda 2.90
-Tapovan NTPC Uttarakhand Uttarakhand 48.00
- KWAR Hydropower Chenab Valley Project J&K 410.34
- Rampur Project Govt of UP UP 11.31
-BRCPL-OMIL-DARA (JV) Khajuwala Govt of Rajasthan Rajasthan 193.83
-HCC OMIL (JV) Nokha Project Govt of Rajasthan Rajasthan 327.64
-OMIL JWIL (JV) Muradabad UP Amroha Govt of UP UP 242.27
-OMIL JWIL (JV) Muradabad UP Rampur Govt of UP UP 323.29

Total Order Book

2655.75

• Growth Outlook: The outlook remains positive, with continued government focus on water infrastructure and the need for regular maintenance and upgrades of existing assets.

Revenue Guidance - Rs. 800 cr - Rs. 1000 cr.

EBITDA Guidance - 8-10%

Expected Order Inflow - Rs. 700-1000 crores

- Trageting Hydro Mechnical Projects, Pumped Storageand Water Infrastructure Projects.

Monetization of Non-core Assets/ Arbitration Awards - 700+ crores in the next 2

3 years.

Real Estate Development:

• Performance: Our real estate portfolio showed steady progress, with a focus on sustainable and value-driven developments. The residential projects witnessed healthy absorption rates, while commercial ventures maintained stable occupancy.

Real Estate Segment - Rs 600cr+

High and RERA Compliant apartments, Pallacia Jaipur :

> Project Area - 6,46,150 sq ft

> Considerations Collected - Rs 330 crores

> Revenue Recognized - Rs 244 crores

> Remaining Realizable value (Estimated)- Rs 310 crores

Om Green Meadows, Kota :

> Project Area - 3,53,814 sq ft

> Considerations collected - Rs 83 crores

> Revenue Recognized - Rs 62 crores

> Remaining Realizable value (Estimated)- Rs 30 crores

Slum Rehabilitation, Mumbai:

> FSI allowed for ~2 Mn sq.ft development which has potential for residential & Hotel buildings. This could increase the companys share after partnering with a reputable branded developer.

> Partnered with Valor Estate for their 50% stake and our stake is 17.5%

• Outlook: While market dynamics remain sensitive to economic factors, our strategic land bank and focus on quality and timely delivery position us well for future growth.

4. Financial Performance Review (FY 2024-2025)

5. Ratios

Ratios

Current Period Previous Period % Variance

REASONS FOR SIGNIFICANT CHANGES

Current Ratio

2.39 2.24 6.35%

Debt-equity ratio

0.04 0.04 1.19%

Debt-service coverage ratio

1.46 3.11 -52.92% Companys Profitability has been decreased.

Return on Equity ratio %

4.74% 7.92% -40.17% Companys Profitability has been decreased.

Inventory Turnover ratio

5.18 7.08 -26.93% Companys Turnover has been decreased substantially.

Trade Receivable turnover ratio

2.57 4.45 -42.35% Companys Turnover has been decreased substantially.

Trade Payable turnover ratio

2.89 3.33 -13.43%

Net Capital Turnover ratio

2.04 3.68 -44.59% Companys Turnover has been decreased substantially.

Net Profit Ratio %

5.42% 5.39% 0.44%

Return on Capital Employed %

7.10% 14.43% -50.79% Companys Profitability has been decreased.

Return On Investment %

10.32% 10.93% -5.54%

Return On Asset %

3.36% 5.46% -38.53% Companys Profitability has been decreased.

Interest-service coverage ratio

272.71% 493.36% -44.72% Companys Profitability has been decreased.

EPS

3.56 5.76 -38.21% Companys Profitability has been decreased.

Long Term Debt To Working Capital

3.15% 4.85% -35.02% Companys Long Term Debt has been decreased.

Bad Debts To Account Receivable Ratios

0.54% 1.08% -50.46% Companys Trade Receivables has been increased.

Current Liability Ratios

78.79% 77.16% 2.12%

Operating Margin (%)

16.74% 15.42% 8.56%

Total Debt To Total Assets

2.71% 2.66% 1.79%

Net Worth

77701.69 74752.95

Net Profit After Tax

3610.27 5717.18

*Capital employed includes Equity, Long term Borrowings, Deferred Tax Liabilities, and reduced by Capital Reserve, Investments (other than subsidiary), Cash and Cash Equivalents, Capital Work-in-Progress .

6. Risks and Concerns

Om Infra Limited has a robust risk management framework to identify, assess, monitor, and mitigate various risks that could impact its operations and financial performance.

• Operational Risks:

o Project Execution Delays: Risks associated with delays due to unforeseen site conditions, labor issues, or equipment breakdowns.

o Mitigation: Strict project planning, regular monitoring, deployment of experienced project management teams, and contingency planning.

• Financial Risks:

o Liquidity Risk: Risk of not having sufficient funds to meet short-term obligations.

o Mitigation: Maintaining healthy cash reserves, efficient working capital management, and diversified funding sources.

o Interest Rate Risk: Impact of fluctuations in interest rates on borrowing costs.

o Mitigation: Prudent debt management and hedging strategies where appropriate.

• Regulatory & Compliance Risks:

o Changes in Policies/Regulations: Risks arising from new government policies, environmental norms, or taxation changes.

o Mitigation: Continuous monitoring of regulatory landscape, adherence to all legal and statutory requirements, and strong internal compliance teams.

• Environmental & Social Risks:

o Environmental Impact: Risks related to environmental damage during construction.

o Mitigation: Adherence to environmental impact assessments, adoption of sustainable construction practices, and obtaining necessary clearances.

o Social Impact: Risks related to community displacement or local unrest.

o Mitigation: Proactive community engagement, fair rehabilitation policies, and adherence to social safeguards.

• Market Risks:

o Competition: Intense competition from other players.

o Mitigation: Focus on competitive bidding, technological differentiation, and strong client relationships.

o Economic Downturn: Impact of broader economic slowdown.

o Mitigation: Diversification of project portfolio, cost optimization, and maintaining financial flexibility.

7. Internal Control Systems and their Adequacy

The Company has established a robust framework of internal controls commensurate with the size and complexity of its operations. These systems are designed to ensure:

• Efficient and orderly conduct of business.

• Safeguarding of assets.

• Prevention and detection of frauds and errors.

• Accuracy and completeness of accounting records.

• Timely preparation of reliable financial information.

The Audit Committee, comprising independent directors, regularly reviews the adequacy and effectiveness of the internal control systems and monitors compliance with internal control policies. Internal audits are conducted periodically across all functions and project sites, with findings and corrective actions reported to the management and the Audit Committee.

8. Human Resources and Industrial Relations

Our employees are our most valuable asset. Om Infra Limited is committed to fostering a culture of excellence, safety, and continuous learning. During FY 2024-2025, we focused on:

• Talent Acquisition & Retention: Attracting and retaining skilled engineers, project managers, and technical staff.

• Training & Development: Investing in training programs to enhance technical capabilities, leadership skills, and safety awareness.

• Employee Welfare: Ensuring a safe working environment, competitive compensation, and employee engagement initiatives.

• Diversity & Inclusion: Promoting a diverse and inclusive workplace.

Our employee strength as of March 31, 2025, was more than 1200 permanent employees. We are committed to diversity, equity, and inclusion in our workforce.

9. Outlook

Looking ahead to FY 2025-2026 and beyond, Om Infra Limited is optimistic about the prospects for the civil construction sector. The governments sustained focus on infrastructure development, particularly in water resources and rural connectivity, provides a strong foundation for growth.

Our strategy will continue to revolve around:

• Strategic Project Selection: Focusing on high-margin projects in our core competencies of dam construction, water infrastructure, Pumped Storage , River linking Projects and Irrigation projects.

• Operational Excellence: Enhancing project execution capabilities, optimizing costs, and improving efficiency through technology adoption.

• Diversification & Expansion: Exploring new geographical markets and synergistic segments within the infrastructure domain.

• Sustainability: Integrating sustainable practices and technologies into our projects and operations.

• Client Relationships: Strengthening long-term relationships with government agencies and private clients.

We are confident that our strong fundamentals, experienced management team, and commitment to quality and timely delivery will enable us to navigate challenges and achieve sustainable growth in the coming years.

Cautionary Statement

Statements in this Management Discussion & Analysis describing the Company?s objectives, projections, estimates, expectations, or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company?s operations include, among others, economic conditions affecting demand and supply, changes in government regulations and tax regimes, and other incidental factors.

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