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Aarish Outdoors Limited

Aarish Outdoors Limited - Related Party Transactions

Introduction

Based on the Draft Red Herring Prospectus (DRHP) dated July 23, 2026, and subsequent filings, here are the “Related Party Transactions” (RPT) details of Aarish Outdoors Limited.

Business Model Operations

Business Model: The Company provides Out-of-Home (OOH) advertising solutions, primarily through static hoardings and billboards located at strategic high-traffic locations like arterial roads and highways in Gujarat.


Raw Materials: The Company consumes and trades hoarding materials including iron, MS pipes, GI sheets, and aluminum boards.


Sourcing and Volatility: While specific import/export splits for raw materials are not detailed, the company identifies volatility in raw material prices as an external risk linked to economic slowdowns.


Key Vendors: The Company depends on multiple external vendors for site fabrication and printing. A key identified vendor for proposed CapEx is Rudra Structen.


Comparable Peers: The listed peers are Signpost India Limited and Bright Outdoor Media Limited.


Advances from Customers: The company receives minimal advances; as of March 31, 2026, customer advances stood at ₹0.01 Lakhs.


Order Book: As of June 25, 2026, the Company has an outstanding order book of ₹1,402.88 Lakhs.


Total Addressable Market (TAM): The sources do not provide a specific numerical value for TAM but cite a Dun & Bradstreet report highlighting the growth of the OOH Industry in India driven by urbanization and infrastructure development.


Key Factors Affecting Business: These include site availability, lease rentals, municipal regulations (specifically from the Ahmedabad Municipal Corporation), and seasonal advertising demand.

Financial Performance Health

Sales, EBITDA, and PAT Trends: All three metrics are increasing significantly.

  1. Revenue: Increased from ₹115.27 Lakhs (FY24) to ₹1,198.92 Lakhs (FY26).
  2. EBITDA: Increased from ₹28.34 Lakhs (FY24) to ₹469.65 Lakhs (FY26).
  3. PAT: Increased from ₹27.14 Lakhs (FY24) to ₹301.99 Lakhs (FY26).


Margins Breakdown: EBITDA margins fluctuated from 24.58% (FY24) to 42.76% (FY25) and then slightly decreased to 39.17% (FY26). Net Profit margins increased from 23.54% (FY24) to 25.19% (FY26). The growth is attributed to the scaling up of operations and resource optimization.


Balance Sheet Health: Total Equity and Liabilities grew from ₹207.09 Lakhs (FY24) to ₹728.65 Lakhs (FY26). The Debt-Equity Ratio has improved drastically from 15.73 in FY24 to 0.12 in FY26 due to loan repayments and profit accretion.


Cash Flows: Net Operating Cash Flow was ₹226.02 Lakhs in FY 2025-26.


Financial Ratios (Last 3 Years):

  1. RoCE: 9.16% (FY24) to 93.96% (FY26).
  2. Asset Turnover: Improved from 0.56 (FY24) to 1.64 (FY26) [Calculated from 273, 276].
  3. Debt Raised: The Company took loans of ₹74.57L (FY24), ₹89.63L (FY25), and ₹79.00L (FY26).
  4. CapEx: Incurred ₹77.72L (FY24), ₹93.54L (FY25), and ₹48.78L (FY26).


Conversion and Free Cash Flow Table (₹ Lakhs)

The conversion % is not consistently increasing; while it improved slightly in the last year, it remains below FY 2023-24 levels.

Risks Management Outlook

Key Risks:

  1. Geographical Concentration: 82% of revenue comes from Gujarat.
  2. Trade Receivables: High holding levels (up to 127 days in FY25).
  3. Customer Concentration: The top 10 customers contributed 80.17% of revenue in FY26.
  4. No Long-term Agreements: Business relies on campaign-specific work orders.


Red Flags:

  1. Past Non-compliance: Instances of delays in filing various statutory forms (ADT-1, AOC-4, MGT-7A, etc.) with the RoC.
  2. Trademark Objection: The trademark application for the company logo has been objected to by the Trade Marks Registry.
  3. Litigation: A tax proceeding of ₹0.09 Lakhs against Promoter Amitkumar Patel.


Growth Plans: The company plans to install 31 new hoardings and acquire operational rights for 26 existing hoardings using IPO proceeds.


Government Intervention: The business is heavily regulated by municipal authorities (AMC, GMC) regarding billboard placement, size, and license fees.


Structural vs. Cyclical Trends: Management views growth as driven by structural shifts like rapid urbanization and the integration of digital OOH with mobile/online media, though specific advertising demand remains cyclically influenced by festivals and elections.

Disclaimer

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