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INDEXEL ENGINEERING LIMITED

Indexel Engineering Limited - Related Party Transactions

Introduction

Based on the DRHP (Draft Red Herring Prospectus) dated July 30, 2026, and subsequent filings, here are the “Related Party Transactions” (RPT) details of Indexel Engineering Limited.

Business Model Operations

Business Model: Indexel is an integrated provider of electrical, instrumentation, and automation solutions. Its model integrates product distribution (authorized partner for brands like Schneider Electric), in-house manufacturing of panels, and turnkey project execution (EPC).


Advances from Customers: Yes, the company receives advances, which stood at ₹164.70 lakhs as of January 31, 2026.


Comparable Peers: The primary listed peer identified is Vivid Electromech Limited.


Raw Materials: Key materials include CRCA and stainless-steel sheets, copper and aluminum busbars, switchgear, PLCs, SCADA/HMI hardware, and VFDs.


Sourcing: Procurement is predominantly domestic (99.48% in the period ended Jan 31, 2026), with minimal direct imports.


Price Volatility: Material prices fluctuate based on commodity prices, demand-supply gaps, and international supply-chain disruptions.


Key Vendors: Top 10 suppliers account for 52.40% of purchases (anonymized in sources).


Key Factors Affecting Business: These include turnkey project growth, customer/industry mix, raw material availability, and geographic concentration (Rajasthan and Maharashtra).


Competitive & Regulatory Landscape: The company operates in a fragmented industry competing on technical capability, pricing, and project delivery. It must comply with Companies Act, SEBI regulations, and environmental/labor laws.


Legal Cases:

  1. Company: 3 tax proceedings involving ₹0.24 lakhs.
  2. Directors/Promoters: One criminal complaint filed by a director and one by a promoter under the Negotiable Instruments Act. One criminal case (road accident) filed against a KMP.


Total Addressable Market (TAM): The industrial automation and control systems market is growing, with specific segments like Pharmaceuticals expected to reach USD 57.7 billion by FY 2030.


Order Book: The source highlights turnkey projects as the principal activity but does not provide a specific total backlog figure in the provided excerpts.

Financial Performance Health

Sales, EBITDA, and PAT Trends: All are increasing. Sales grew from ₹5,572.38 lakhs (FY23) to ₹8,956.76 lakhs (FY25). EBITDA grew from ₹537.69 lakhs to ₹1,288.94 lakhs. PAT increased from ₹363.37 lakhs to ₹879.80 lakhs.


Margins: Both EBITDA (9.65% to 14.39%) and Net Profit (6.52% to 9.82%) margins increased between FY23 and FY25. This is attributed to higher operational efficiency, improved cost management, and genuine operating leverage.


Balance Sheet Health: Total Assets grew from ₹3,678.35 lakhs (FY23) to ₹7,009.13 lakhs (Jan 2026). The company's net worth increased significantly to ₹4,268.48 lakhs.


Operating Cash Flows (CFO):

  1. Jan 2026 (10m): ₹240.59 lakhs
  2. Fiscal 2025: (₹134.73) lakhs (Negative due to high receivables)
  3. Fiscal 2024: ₹105.48 lakhs
  4. Fiscal 2023: ₹317.94 lakhs.


Customer Concentration: High. The top 10 customers contributed 64.00% of revenue in the 10 months ended January 31, 2026.


Domestic/Export Mix: Revenue is mainly domestic (99.48%); exports were 0.52% in the period ended Jan 31, 2026.


Debt & Capex:

  1. Total Debt: Increased from ₹373.12 lakhs (FY23) to ₹655.93 lakhs (Jan 2026) [Python calculation].
  2. Capex: Incurred ₹38.73 lakhs (FY23), ₹67.32 lakhs (FY24), and ₹134.69 lakhs (FY25).


Return on Capital (ROCE): Consistently high at 23.27% (FY23), 29.98% (FY24), and 32.97% (FY25).


Asset Turnover: Approximately 1.51x (FY23), 1.66x (FY24), and 1.58x (FY25).


Financial Analysis:Conversion % is not increasing; it saw a sharp drop in FY25 due to receivable spikes but recovered in Jan 2026.

Risks Management Outlook

Red Flags:

  1. Negative Operating Cash Flow in FY 2025.
  2. High Customer Concentration (Top 10 = ~64%).
  3. Increasing Working Capital Cycle (NWC days up from 128 to 163).
  4. Geographic Concentration in Rajasthan and Maharashtra.


Key Business Risks: Dependence on top customers, fixed-price turnkey contracts susceptible to cost overruns, and working capital intensity.


Growth Plans: The company intends to scale its Battery Energy Storage Systems (BESS) business, for which it is setting up a new assembly line in Kota.


Government Intervention: Visible through procurement on the GeM portal and government policies favoring infrastructure and energy security.


Promoter Quality: Promoters Amit Singhal and Rajesh Goenka have 20+ years of experience. They have successfully steered the company through a CAGR of 26.78% in revenue and 55.60% in PAT (FY23-25).


Industry Trends: Management views the move towards industrial automation and green energy (BESS) as a structural shift toward modernization, although certain customer industries (like cement) remain cyclical.

Disclaimer

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