About Vikran Engineering Limited

BUSINESS OVERVIEW

Vikran Engineering is among the fastest-growing Indian Engineering, Procurement and Construction (EPC) companies, achieving revenue growth over FY23–25 that has outpaced the average industry growth estimates and peer benchmarks (Source: CRISIL Report). While relatively smaller in terms of revenue from operations compared to larger listed peers, the company recorded a CAGR of 32.17% in revenue from operations, rising from ₹5,243.05 million in FY23 to ₹9,158.47 million in FY25 (based on Restated Financial Information).

The company has developed a diversified project portfolio, with the majority of revenue derived from the energy and water infrastructure verticals. It provides end-to-end turnkey services covering conceptualisation, design, supply, installation, testing, and commissioning across multiple sectors, including power, water, and railway infrastructure. Within the power sector, the company operates in both power transmission and distribution, while in the water sector, projects include underground water distribution, surface water extraction, overhead tanks, and distribution networks. The company has also executed projects in solar EPC for ground-mounted solar plants and smart metering solutions. In the railway infrastructure vertical, it undertakes 132 kV traction substations and underground EHV cabling projects.

Key competencies lie in in-house design, engineering capabilities, and timely project execution, enabling delivery of high-value projects that adhere to stringent regulatory and quality standards. Projects have been executed for government entities, public sector undertakings, and private companies, with a track record of completion either ahead of schedule or within contractual timelines.

Financially, Vikran Engineering reported the highest operating EBITDA margin of 17.50% in FY25, along with the second-highest PAT margin of 8.44% and second-highest Return on Equity (ROE) among its peer set (Source: CRISIL Report).

As of June 30, 2025, the company has successfully completed 45 projects across 14 states, with an executed contract value of ₹19,199.17 million. On the same date, the company was executing 44 ongoing projects across 16 states, representing an order book of ₹51,202.07 million, of which ₹24,424.39 million was active order backlog. Contracts are secured primarily through competitive bidding and tendering processes.

The client base includes leading government and public sector organisations such as NTPC Limited, Power Grid Corporation of India Limited, South Bihar Power Distribution Company Ltd., North Bihar Power Distribution Company Ltd., Transmission Corporation of Telangana Limited, Madhya Pradesh Power Transmission Company Limited, Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited, District Water and Sanitation Mission (PHED), and State Water and Sanitation Mission (SWSM). In addition, projects are under execution for Assam Power Distribution Company Limited and the Danapur division of the Eastern Central Railway.

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Infrastructure Verticals

Power Transmission and Distribution

The company undertakes projects for high-voltage transmission lines up to 765 kV, substations up to 400 kV (including both Air Insulated Substations (AIS) and Gas Insulated Substations (GIS)), and power distribution networks. Over 30,000 smart metering connections have been executed under this vertical.

Water Infrastructure

Turnkey solutions in water projects include surface and underground drinking water systems, distribution networks, and rainwater harvesting facilities. Capabilities extend to the design and implementation of water treatment plants, intake structures, and overhead service reservoirs. Projects primarily support rural drinking water supply under schemes like the Jal Jeevan Mission, with scope covering ductile iron pipeline laying under multi-village schemes. The company’s first water infrastructure project was awarded in August 2022 in Betul district, Madhya Pradesh, under the Prime Minister Har Ghar Jal Yojana, valued at ₹2,460.24 million. Currently, 12 projects are ongoing in Uttar Pradesh, Chhattisgarh, and Madhya Pradesh.

Railway Infrastructure

In the railway sector, the company has experience in railway electrification and signalling systems. Projects include overhead electrification (OHE 25kV, 50 Hz AC), 220 kV underground EHV cable works, construction of 132 kV transmission lines, and 132 kV railway traction substations.

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Market Opportunity

The power transmission sector has become a critical growth driver due to the need to match expanding generation capacity with transmission infrastructure. The government’s push for 100% rural electrification through last-mile connectivity has led to rapid expansion of India’s transmission and distribution system. The length of domestic transmission lines increased from 413,407 circuit kilometres in FY19 to 494,374 ckm in FY23 (Source: CRISIL Report).

Similarly, substation capacity in India grew from 899,663 MVA in FY19 to 1,337,513 MVA in FY25, at a CAGR of 6.8%, with significant contributions from 220 kV, 400 kV, and 765 kV segments (Source: CRISIL Report).

In the water supply and sanitation sector, growth is being driven by flagship government programmes such as the Swachh Bharat Mission (SBM), Jal Jeevan Mission, and the National Mission for Clean Ganga (NMCG), alongside urban-focused initiatives like the Atal Mission for Rejuvenation and Urban Transformation (AMRUT).

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Financial Performance

Vikran Engineering has demonstrated strong financial momentum. Revenue from operations grew at a CAGR of 32.17%, from ₹5,243.05 million in FY23 to ₹9,158.47 million in FY25 (Restated Financial Information). Profit after tax (PAT) increased at a CAGR of 34.78%, from ₹428.40 million in FY23 to ₹778.19 million in FY25. This growth underscores the company’s ability to scale operations while maintaining profitability.

As of June 30, 2025, the company  had a total of 761 employees. The Bankers to the company are Union Bank of India, Bank Of Maharashtra, Punjab National Bank, Central Bank of India, Canara Bank, Karnataka Bank Ltd, Bank of India and Bank of Baroda.

INDUSTRY ANALYSIS

Overview of EPC Industry in India

The Engineering, Procurement, and Construction (EPC) industry in India has become a cornerstone of the country’s infrastructure development, with its influence spanning across power, transport, industrial, and urban projects. Over the years, the contracting landscape has undergone a major transformation. Traditional project delivery models, where the project owner or developer managed execution, have gradually given way to EPC contracts, under which the contractor takes responsibility for design, procurement, construction, and commissioning. This shift has allowed project developers to reduce risks associated with time delays, cost overruns, and currency or interest rate fluctuations, transferring them to the contractor.

One of the defining features of EPC contracts is their ability to integrate design and procurement, thereby compressing project timelines compared to conventional methods. For large, capital-intensive works, contracts are often broken into smaller EPC packages. A typical EPC project today includes civil works, equipment procurement, installation, and commissioning, with leading players providing customised, end-to-end solutions through a consultative approach.

The growth of EPC in India is strongly supported by favourable government initiatives and a robust pipeline of infrastructure investments, particularly in roads, power, railways, and irrigation. The National Infrastructure Pipeline (NIP), National Monetisation Pipeline (NMP), and the PM Gati Shakti initiative have collectively reinforced the central government’s focus on developing large-scale infrastructure.

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Investments and Growth Outlook

Investments across Indian sectors are projected to rise significantly. According to Crisil Intelligence, overall investments are expected to grow 1.3–1.4 times during fiscals 2026–30 compared with 2019–25, with the infrastructure segment acting as the key growth driver. The share of infrastructure in overall investments is set to climb from 63% in 2019–25 to nearly 67–68% in 2026–30.

At the sectoral level, infrastructure investments are projected to expand 1.4–1.5 times over this period, powered by massive government spending on roads, railways, and urban infrastructure. In contrast, the industrial sector is expected to grow more modestly by 1.1 times, led by investments in oil and gas, capital expansion plans, and incentives under the PLI scheme for auto, textiles, and specialty steel. Meanwhile, building construction is likely to rise 1.2–1.3 times, though its share will fall to 16–18% of total investments, with residential construction providing the primary push.

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Challenges in the EPC Industry

The EPC sector, while promising, faces several regulatory, safety, and environmental challenges. Companies must navigate a complex compliance landscape involving safety norms, environmental laws, and construction standards, which are often revised. These changes can drive up costs, cause project delays, and require new investments in equipment, training, or technology. Non-compliance can result in penalties, reputational damage, or even stoppage of works.

Environmental concerns also weigh heavily on the sector. EPC projects are resource-intensive, involving high energy consumption and significant waste generation, which has led to increased scrutiny and stricter sustainability regulations. Firms are now being pushed to invest in cleaner technologies, waste management systems, and emission control measures, raising costs but also opening avenues for innovation.

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Barriers to Entry

Entering India’s EPC industry requires overcoming substantial barriers. High capital requirements, coupled with the need for advanced equipment, cutting-edge technology, and skilled manpower, make it difficult for smaller firms to compete. Compliance with environmental, labour, and safety regulations adds another layer of complexity.

Additionally, EPC projects demand specialised technical knowledge and robust project management skills, which new entrants may struggle to demonstrate without prior experience. Securing large contracts often requires a proven financial track record, strong creditworthiness, and established client relationships. With the competitive landscape dominated by established players, breaking through requires both scale and differentiation.

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EPC in India’s Power Sector

Within the power sector, EPC contracting has emerged as the preferred project delivery model due to the standardised nature of power plant construction. A typical EPC package encompasses design, civil works, equipment procurement, erection, testing, commissioning, and often 3–5 years of O&M services. After the O&M period ends, developers typically sign separate long-term maintenance agreements.

The scope of EPC work in power includes mechanical, civil, instrumentation, and electrical works, with mechanical erection being the most complex, requiring highly specialised contractors. Civil works demand strong design and construction capabilities, while instrumentation and electrical components, though of medium complexity, follow uniform industry standards. Importantly, environmental clearance is mandatory for all power projects.

Indian EPC players usually subcontract various packages—such as boilers, turbines, and generators (BTG) or Balance of Plant (BOP) systems like coal handling, ash handling, and cooling towers—to specialised vendors. The sector has also seen integration of advanced technologies like waste heat recovery boilers (WHRB), flue gas desulphurisation (FGD), and selective catalytic reduction (SCR) systems, driven by the country’s clean energy agenda.

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Investments in the Power Sector

The Indian power sector is set to witness a major wave of investments. Crisil Intelligence projects ₹29–30 trillion of investments between fiscals 2026–2030, a sharp jump from ₹19–21 trillion in 2019–25. Generation will dominate, making up 69% of investments, followed by transmission (17%) and distribution (14%).

The most significant push will come from renewable energy, which is expected to account for 70% of generation investments as India pursues its COP26 target of 500 GW of non-fossil energy capacity by 2030. This translates into capacity additions of 190–200 GW from renewables and 25–30 GW from coal over 2026–30.

To support this, transmission investments are projected to rise to ₹4.5–5.5 trillion, enabling large-scale renewable integration and inter-regional power flows. Projects such as the North-Eastern System Strengthening Scheme, Ladakh’s renewable evacuation corridors, and even cross-border transmission with Bhutan, Bangladesh, and Sri Lanka are expected to drive this expansion.

Distribution, meanwhile, will benefit from the Revamped Distribution Sector Scheme (RDSS), with investments of ₹3.5–4.5 trillion earmarked for infrastructure upgrades and smart meter installations. Although state discoms remain financially stressed, central and state governments, along with institutions like JICA and ADB, are expected to provide the necessary funding support.

Notably, EPC projects account for nearly 40–50% of total investments in the power sector, underscoring the critical role contractors play in India’s energy transition.

BUSINESS STRENGTHS

1. Fast-Growing EPC Company with Strong Execution Capabilities
Vikran Engineering is among the fastest-growing Indian Engineering, Procurement, and Construction (EPC) companies in terms of revenue growth over FY23–25, significantly outperforming average industry growth estimates and the peer set considered (Source: CRISIL Report). While relatively smaller in terms of revenue compared to listed peers, revenue from operations recorded a CAGR of 32.17%, increasing from ₹5,243.05 million in Fiscal 2023 to ₹9,158.47 million in Fiscal 2025 (based on Restated Financial Information). The company provides end-to-end turnkey EPC services, spanning conceptualisation, design, supply, installation, testing, and commissioning, with a presence across power, solar, water, and railway infrastructure. As of June 30, 2025, the company had successfully completed 45 projects across 14 states with an executed contract value of ₹19,199.17 million, and was executing 44 ongoing projects across 16 states, aggregating orders worth ₹51,202.07 million, including an unexecuted Order Book of ₹24,424.39 million. The company has also delivered 10 Extra High Voltage (EHV) substations and transmission projects up to 765 kV, along with EPC services for EHV Air Insulated Substations (AIS) up to 400 kV.

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2. Diversified Order Book and Consistent Financial Growth
The Order Book is a key strength in the EPC industry as it provides visibility of future revenues (Source: CRISIL Report). Vikran Engineering’s Order Book has remained stable and diversified, moving from ₹20,457.86 million as of March 31, 2023, to ₹21,148.02 million as of March 31, 2024, and ₹20,443.18 million as of March 31, 2025. The portfolio spans power transmission and distribution, water infrastructure, and railway infrastructure, ensuring a balanced revenue stream. Within power, the company holds pre-qualifications for transmission lines up to 400 kV, substations up to 765 kV, and distribution projects of 33 kV and 11 kV, including distribution substations and lines. Additionally, the company is qualified to bid for energy meter service connection projects, strengthening its ability to secure diverse contracts across verticals.

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3. Strong Pan-India Presence Supported by a Robust Supply Chain
Vikran Engineering has executed projects across 22 Indian states, with ongoing projects in 16 states, supported by a robust supply chain network. This extensive footprint provides regional diversification and enhances competitive positioning in government and private sector tenders.

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4. Asset-Light Business Model Ensuring Capital Efficiency
The company operates on an asset-light model, renting equipment from third-party lessors to match project-specific requirements. This approach reduces fixed costs, ensures cost and logistics efficiency, and allows for greater management focus on core business areas rather than asset ownership and maintenance. The model also enables faster scaling of operations in line with demand fluctuations. The efficiency of this strategy is reflected in the fixed asset turnover ratio, which improved consistently—101.27 in FY25, 91.00 in FY24, and 57.38 in FY23. The asset-light nature is expected to continue supporting capital-efficient growth.

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5. In-House Technical and Engineering Capabilities with Strong Quality Control
The EPC business is executed in an integrated manner, backed by in-house technical expertise. The company has a team of 12 designers and engineers with a cumulative experience of over 93 years across business verticals, offering customised turnkey solutions. Dedicated engineering teams are assigned to each vertical, ensuring timely project execution, quality assurance, and adherence to regulatory standards. This integrated in-house capability enables the company to capture a larger portion of the EPC value chain and maintain high-quality delivery.

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6. Experienced Promoters and Proven Leadership
The company’s growth has been guided by Chairman and Managing Director, Rakesh Ashok Markhedkar, who brings 34 years of experience in the EPC sector. He holds a Bachelor’s degree in Electrical Engineering from Samrat Ashok Technological Institute, Vidisha (M.P.), Barkatullah University, and a Master’s degree in Science in Quality Management from Birla Institute of Technology and Science, Pilani. He also attended the General Management Programme at IIM Bangalore during his tenure at Larsen & Toubro Limited. His professional experience spans leadership roles at Larsen & Toubro Limited, Voltage Engineering Limited, EMCO Limited, KEI Industries Limited, ERA Infra Engineering Limited, and Bajaj Electricals Limited. Under his leadership, the company has received prestigious recognitions including the “World’s Best Emerging Leader” award (WCRCFEST 2023), “Most Promising Business Leader of Asia” (Economic Times, 2017), and “Leading Director 2021” (Greentech Foundation).

BUSINESS STRATEGIES

 

1. Strengthening Core Competencies in Power Transmission, Distribution, and Water Infrastructure
Vikran Engineering is focused on executing EPC projects in the power transmission, distribution, and water infrastructure sectors. Between FY26 and FY30, power demand in India is projected to grow at a CAGR of 5–7%, reaching 2,255–2,265 billion units. This growth will be driven by strong economic expansion, improvements in distribution networks, and government-led reforms aimed at enhancing the overall health of the power sector. By concentrating efforts in these core sectors, the company seeks to consolidate its leadership and leverage long-term opportunities.

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2. Selective Expansion of Geographical Footprint
Starting from Madhya Pradesh, Vikran Engineering has progressively expanded operations across 14 states in India and, as of June 30, 2025, is executing 44 projects across 16 states. As part of its growth strategy, the company plans to diversify into private sector EPC projects and selectively explore international markets, with a focus on opportunities in Africa and the Middle East.

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3. Diversifying the EPC Portfolio into New Sectors
To reduce dependency on existing service lines and pursue higher-margin opportunities, Vikran Engineering aims to expand its EPC portfolio into emerging sectors such as railways, metros, and renewable energy. The company has already secured four projects in the railway infrastructure sector and is actively pursuing opportunities in metro projects, which are expected to attract investments of ₹1.5–1.7 trillion between FY25 and FY30 (CRISIL Report). Additionally, expansion into the solar EPC industry is planned, with capabilities to undertake turnkey solar PV projects up to 100 MWp and balance of system projects up to 300 MWp. In the water infrastructure domain, the company is qualified and actively bidding for large-scale irrigation projects.

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4. Leveraging Government Initiatives and Policies
Vikran Engineering is strategically positioned to benefit from government-led infrastructure programs across power, water, and transportation sectors. The company has already executed multiple projects under schemes such as Rajiv Gandhi Grameen Vidyutikaran Yojana, Integrated Power Development Scheme (IPDS), Deendayal Upadhyay Gram Jyoti Yojana (DDUGJY), and Saubhagya. Going forward, the company intends to capitalize on programs including the Revamped Distribution Sector Scheme (RDSS), the National Solar Mission, the Swachh Bharat Mission, and the Accelerated Irrigation Benefits Programme (AIBP).

BUSINESS RISK FACTORS & CONCERNS

1. Dependence on Competitive Bidding and Timely Completion of Projects
The majority of projects are awarded through a competitive bidding process. Failure to qualify, secure, or successfully execute projects may adversely affect future business prospects, growth trajectory, financial condition, and cash flow stability. In the past, several projects were completed within or ahead of contractual timelines; however, there is no assurance that ongoing or future projects will meet stipulated deadlines. Delays in execution may impact reputation and reduce the chances of winning new contracts.

2. Reliance on Revenue Growth Momentum
Vikran Engineering is among the fastest-growing EPC companies in India in terms of revenue growth during FY23–FY25, outpacing industry averages and peers (Source: CRISIL Report). Revenue from operations grew at a CAGR of 32.17%, increasing from ₹5,243.05 million in FY23 to ₹9,158.47 million in FY25. While revenues, EBITDA, and profit after tax have consistently grown over the past three fiscals, there is no certainty that this growth will continue in the future.

3. Ban Imposed by Ministry of Railways
On July 26, 2024, the Executive Director/Gati Shakti (Elect.), Railway Board, passed an order pursuant to findings of CORE/Vigilance, directing that the Ministry of Railways ban Vikran Engineering for two years for breaching the code of integrity and involvement in illegal gratification. The order relates to a contract awarded on November 7, 2021, by Railways Electrification (RE)/Ahmedabad Division, involving supply, erection, testing, and commissioning of a 220 kV line and underground cable system in Kutch, Gujarat. The investigation was initiated by CORE/Vigilance based on findings of the Central Bureau of Investigation (CBI). This order poses reputational and operational risks for future participation in railway projects.

4. Revenue Dependence on Government Tenders
The company’s business is driven by a mix of tenders from government authorities, public sector undertakings, and private sector clients, contributing 61.73%, 18.41%, and 19.86% of FY25 revenue, respectively. Any delays in tender issuance, cancellations, or unfavorable policy changes by government entities could result in contract foreclosures, renegotiations, or terminations. Such events could materially affect revenue, operational stability, and financial performance. Revenue dependence on government entities was 61.73% in FY25, 46.45% in FY24, and 68.82% in FY23. A reduction in government tenders may significantly impact future business.

5. Sector Concentration Risk
A significant portion of the order book and revenues is derived from the power transmission & distribution sector and the water infrastructure sector. Substantial social, political, or economic disruptions in these sectors could adversely impact business operations, financial condition, and cash flow. High sector concentration increases vulnerability to policy shifts, regulatory changes, or funding constraints in these domains.

6. Risks Associated with Joint Ventures
While the company predominantly bids as a sole contractor with full project responsibility, joint ventures are occasionally formed with other EPC entities to qualify for large-scale projects. In such arrangements, failure by a JV counterparty to fulfill contractual obligations could impose additional financial and operational responsibilities, potentially leading to reduced profits or even substantial losses. Such risks may adversely affect overall performance, results of operations, and financial stability.

Summary :
Vikran Engineering’s growth momentum and market position face several risks, including over-dependence on competitive bidding, concentration in government contracts, exposure to regulatory and reputational challenges, and vulnerability to delays in project execution. Additionally, sector concentration in power and water infrastructure, combined with risks from joint ventures, may significantly impact financial stability, cash flows, and long-term growth prospects.