Rajesh Power Service Ltd

1. About the company..

• Rajesh power services limited(RPSL) is a solution provider for the renewable and non-renewable power sectors and operates from ahmedabad,Gujrat. The company offer services such as setting up and maintaining solar power plants, laying extra high voltage cables and transmission lines, establishing EHV Substations, and providing utility services like cable fault rectification and transformer retrofitting.

2.Strengths

1. Rajesh power services claims that it gains expertise in constructing, operating, and maintaining solar power plants in western India. It commissioned a power supply project for Adani's 300 MW solar power plant in Jaisalmer, Rajasthan.

2. The company setup a 1 MW solar power plant in Gujarat in 2012 under the states first solar scheme.

3. Rajesh power services limited is ISO 14001:2015 certified for environmental management systems, ISO 45001:2018 for occupational health and safety management systems, ISO 50001:2011 for energy management system, and 9001:2015 for quality management system.

4. RSPL has invested in HKRP Innovation limited, which provide internet of things and cloud based solution for the energy sector.

5. The company has consistently increase in revenue from operation and profit after tax over the past few years. Revenue from operation increased from Rs. 146.81 Crore in FY22 to Rs. 207.18 crore in FY23 to Rs. 284.97 crore in FY 24. PAT increased from Rs. 3.45 crore in FY22 to Rs. 6.75 crore in FY23 to Rs. 26.02 crore in FY24.

3. Risks

1. Rajesh power services relies heavily on infrastructure projects managed by governmental authorities and agencies. Any failure to qualify for the contracts could be detrimental to the company's business prospects.

2. The company is currently in certain outstanding legal proceedings. Any adverse judgements in any of these cases can be detrimental to the company's business prospects.

3. Any failure to meet the performance standards specified in client work orders could lead Rajesh power services losing business or incurring liquidated damages. Additionally any delays in the timeline of ongoing projects might results in cost overruns, potentially harming the company's reputation and operations.

4. As of September 30,2024. Rajesh power services has outstanding debts of Rs. 81.03 crore and Rs. 79.03 crores, according to the company's restated consolidated and standalone financial statements. Any inability to repay or service these loans can adversely affect the company's financial position.

5. The top 5 customers of Rajesh power Services Limited contributed Rs. 218.47 crore (69.78%), Rs. 192.55 crore(67.57%), Rs. 116.37 crore(56.17%), and Rs. 95.61 crore (65.13%) to its revenue from its operations for the period ending September 30,2024, FY24, FY23, FY22, respectively. Any inability to retain these key clients, expand its customer base , or fall in business from these customers could adversely impact the company's financial standing.

6. A significant portion of Rajesh Power Service Limited operations is concentrated in Gujrat. Any adverse changes in the business environment of the state could hurt the company's financial performance.

4. About the Financials

1. Net Profit - Rajesh Power Service has demonstrated a consistent increase in net profit. In March 2023, the profit was Rs. 7 crore, which rose to Rs. 26 crore by March 2024. As of September 2024, just halfway through the year, the profit has already reached Rs. 28 crore.

2. Borrowings - Borrowing of the company is continuously increasing may this borrowing is taken for the growth of the company. In March 2023, the profit was Rs. 60 crore, which rose to Rs. 78 crore by March 2024. As of September 2024, just halfway through the year, the borrowing has already reached to Rs. 80 crore.

3. Other liabilities - In other liabilities trade payable is continuously increasing i.e. in March 2023, the outstanding trade payable was Rs. 34 crore, which rose to Rs. 31 crore by March 2024. As of September 2024, trade payable of the company is Rs. 88 Crores.

4. Fixed Assets - The company's fixed assets have shown little growth over the past year. In March 2023, the value of fixed assets was Rs. 19 crore. By March 2024, it increased slightly to Rs. 20 crore, but by September 2024, it decreased to Rs. 18 crore.

5. Trade Receivables - Trade receivables of the company is constantly increasing which is not a good symbol of operational cash flow activity. In March 2023 Trade receivable Rs 58 Crore and in March 2024 Trade receivable is Rs. 74 Crore and in September 2024 it is Rs. 97 Crore.

4.Ratios

1. Debtors Days - Debtors days of the company is reduced from 103 days to 94 days which is showing a positive sign of the performance.

2. Inventory Days - Inventory days of the company is reduce from 82 days to 64 days which is also a positive sign of good performance.

3. Days Payable - Days payable is decreasing from 76 to 55 days which is also a good sign of good performance.

4. ROCE(%) - ROCE % is increased from 15% to 31%.