Has IPO-bound Ravi Infrabuild Experienced a 10% Net Profit Decrease in FY24 Due to Rising Expenses?
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Synopsis
Ravi Infrabuild Projects Limited faces a challenging financial landscape as it prepares for an IPO, reporting a significant net profit decline despite revenue growth. Discover how escalating expenses, particularly in employee benefits and material costs, are impacting this ambitious infrastructure firm as it aims to raise Rs 1,100 crore.
Key Takeaways
- Net profit fell by 10.46% in FY24.
- Revenue from operations increased by 32.68%.
- Total expenses surged by 31.99%.
- IPO aims to raise Rs 1,100 crore.
- No offer-for-sale (OFS) component in IPO.
Mumbai, May 9 (NationPress) The infrastructure company Ravi Infrabuild Projects Limited is gearing up for an initial public offering (IPO) aiming to raise as much as Rs 1,100 crore. However, it has registered a 10.46 percent decrease in net profit for the fiscal year 2023-24 (FY24). This decline occurred despite an increase in both income and revenue.
As per the financial information available on the firm’s official website, net profit decreased from Rs 98.49 crore in FY23 to Rs 88.19 crore in FY24.
This drop in profitability is notable, given a remarkable 32.68 percent rise in revenue from operations, which reached Rs 1,285.16 crore in FY24 compared to Rs 968.58 crore in the previous fiscal year.
Total income also saw a significant increase of 33.01 percent year-on-year (YoY), totaling Rs 1,303.89 crore.
However, this income growth came with a steep rise in total expenses, which surged by 31.99 percent to Rs 1,129.16 crore in FY24, up from Rs 855.53 crore in FY23.
Key contributors to these escalating costs included a 53.49 percent increase in employee benefits expenses, rising to Rs 62.79 crore, and a 70.21 percent hike in depreciation and amortization, which reached Rs 31.25 crore in FY24.
Furthermore, the cost of materials consumed surged by 47.21 percent, climbing from Rs 318.19 crore in FY23 to Rs 468.38 crore in FY24.
Based in Udaipur, the company is recognized for its contributions to highways, ropeways, and railway infrastructure. It has submitted its draft red herring prospectus to the market regulator SEBI in a bid to raise Rs 1,100 crore through a fresh issue IPO.
The IPO will not include an offer-for-sale (OFS) component, and the funds will be allocated for purchasing equipment, investing in subsidiaries, repaying debt, and general corporate needs.
The company is led by promoters Narayan Singh Rao, Dilip Singh Rao, and Ravi Singh Rao, who collectively own 84 percent of the pre-issue equity share capital.
Ravi Infrabuild has successfully undertaken projects for the National Highways Authority of India (NHAI), the Ministry of Road Transport and Highways, and various state governments.
Point of View
I believe that Ravi Infrabuild's current financial challenges highlight the broader issues facing the infrastructure industry in India. While growth in revenue is promising, the sharp rise in expenses is a critical concern that investors should closely monitor. The company's upcoming IPO will be a pivotal moment, and transparency in its financial health will be crucial.
NationPress
14/05/2025
Frequently Asked Questions
What caused the decline in Ravi Infrabuild's net profit?
The decline in net profit was primarily due to a significant increase in total expenses, including employee benefits and material costs, which surged alongside rising revenue.
How much is Ravi Infrabuild aiming to raise through its IPO?
Ravi Infrabuild is preparing to raise up to Rs 1,100 crore through its upcoming initial public offering (IPO).
What will the proceeds from the IPO be used for?
The proceeds from the IPO will be utilized to purchase equipment, invest in subsidiaries, repay debt, and for general corporate purposes.
Who are the promoters of Ravi Infrabuild?
The company is led by promoters Narayan Singh Rao, Dilip Singh Rao, and Ravi Singh Rao, who together hold 84% of the pre-issue equity share capital.
What sectors does Ravi Infrabuild operate in?
Ravi Infrabuild is involved in highways, ropeways, and railway infrastructure projects, working with government authorities such as NHAI.
