Inkel Unlisted Share

Business Model

Inkel Ltd is a prominent player in the infrastructure development sector, specializing in the development, investment, and management of various infrastructure projects. The company operates across multiple segments, including real estate, highways, power, and urban infrastructure. Its primary focus is on creating sustainable and technologically advanced infrastructure solutions that drive economic growth and enhance quality of life.

Business segments 

1. PMC/EPC (Project Management Consultancy / Engineering, Procurement, and Construction): Focuses on providing project management and execution services for various infrastructure projects.

2. Renewable Energy/Solar: Engages in the development and management of renewable energy projects, particularly in the solar energy sector.

3. Estate/Leasing: Involves real estate development, property management, and leasing activities.

Ongoing Projects

1. Cochin Cancer Research Center (CCRC): Project Overview: The Cochin Cancer Research Center (CCRC) is a prestigious project aimed at providing state-of-the-art cancer care and research facilities in the region. The project involves the construction and development of advanced infrastructure to support comprehensive cancer treatment, research, and education.

2. Government Medical College, Ernakulam SSB (Super Specialty Block): The Super Specialty Block (SSB) at Government Medical College, Ernakulam, is another significant project by Inkel Ltd. The project is part of the government’s initiative to upgrade existing medical facilities by adding specialized departments and advanced medical infrastructure. The project involves constructing a new block with specialized medical departments, including cardiology, neurology, nephrology, and others.

3. Government Medical College Ernakulam – MLT (Medical Laboratory Technology Block): This project focuses on the development of a dedicated Medical Laboratory Technology (MLT) block at Government Medical College, Ernakulam. The block is intended to house state-of-the-art laboratory facilities for various medical tests and research activities.

 4. District Hospital Mavelikkara (DH Mavelikkara): The project at District Hospital Mavelikkara involves upgrading the existing healthcare facilities to provide better services to the local population. The development aims to enhance the hospital's infrastructure, ensuring it meets modern healthcare standards.

Recent Updates:

• INKEL Limited reported a turnover of ₹115.10 crore for the FY 2023-24, marking a 15% increase compared to the previous year. The company's net profit surged by 114% to ₹30.74 crore.
• INKEL is actively pursuing renewable energy projects both within and outside Kerala. The company plans to establish close to 200 MW of renewable energy plants in Maharashtra, Andhra Pradesh, and Rajasthan over the next two years.
• A new subsidiary, INKEL-Re, has been established in Palakkad for a hybrid renewable energy project, which includes a 32 MW project (14 MW from wind and 18 MW from solar).
• Under its core area, INKEL is currently overseeing the construction of 17 government hospital buildings in Kerala, funded by the Kerala Infrastructure Investment Fund Board (KIIFB), with a total project value of ₹2,279 crore.
• NKEL, a public-private partnership initiative endorsed by the Government of Kerala, has announced a tender for module mounting structures required for a 3.5 MW solar power project in Mylatty, located in the Kasaragode district of Kerala.

Management Details:

1. Chairman: K. M. Abraham – He has held various senior positions in the government and has significant experience in project management and infrastructure development.

 2. Managing Director: K. K. Venu – He is responsible for overseeing the company’s operations and strategic direction.

 3. Director – Finance: Rajesh R. Pillai – He manages the company’s financial affairs, including accounting, budgeting, and financial planning.

 4. Director – Projects: K. R. Shaji – He is responsible for overseeing the execution of various projects and ensuring they meet their objectives.

Subsidaries

Financial Highlights

All Values in INR - Crs (Approx.)

Key takeaways

1.The company experienced significant revenue growth, with an increase of approximately 18.2% from FY23 to FY24, rising from ₹82.58 crore to ₹97.64 crore.

2.The EBITDA more than doubled, increasing by 119.7% from ₹18.06 crore in FY23 to ₹39.68 crore in FY24, indicating improved operational efficiency and cost management.

3. The Profit After Tax (PAT) also more than doubled, growing by 113.1% from ₹14.43 crore in FY23 to ₹30.74 crore in FY24. This reflects a strong bottom-line performance.

4.The PAT margin improved substantially, rising from 17.47% in FY23 to 31.48% in FY24. This indicates better profitability and cost control.

Segment-Wise Revenue for Inkel Ltd

1. PMC/EPC (Project Management Consultancy / Engineering, Procurement, and Construction):

• FY 23-24: The PMC/EPC segment generated a revenue of ₹198.8 Crores
• FY 22-23: The revenue for this segment was ₹131.2 Crores
• Year-on-Year Growth: The PMC/EPC segment experienced a notable increase in revenue of ₹67.5 Crores, reflecting a growth of approximately 51.5%. This rise suggests an expansion in project activities or the acquisition of larger contracts.

2. RE/Solar (Renewable Energy/Solar)

• FY 23-24: Revenue from the RE/Solar segment was ₹318.7 Crores.
• FY 22-23: This segment recorded revenue of ₹444.4 Crores.
• Year-on-Year Change: The RE/Solar segment saw a decrease in revenue of ₹125.6 Crores, a decline of about 28.3%. This decrease may indicate reduced project execution or lower sales in the renewable energy sector, potentially due to market conditions or project delays.

3. Estate/Leasing:

• FY 23-24: The Estate/Leasing segment earned revenue of ₹143 Crores.
• FY 22-23: Revenue for this segment was ₹97.3 Crores.
• Year-on-Year Growth: The Estate/Leasing segment showed a significant increase in revenue of ₹45.6 Crores, reflecting a growth of around 46.9%. This increase indicates improved performance in real estate and leasing activities, possibly due to new leases or successful property sales.

Financial Performance

Consolidated Financial Performance Comparison (2023 vs. 2024):

1.      Revenue from Operations:

• 2023: ₹82.58 Crores
• 2024: ₹97.64 Crores

Change: +18.2%

2.      Profit:

• 2023: ₹14.43 Crores
• 2024: ₹30.74 Crores

Change: +113.3%

3.      Expenses:

• 2023: ₹82.92 Crores
• 2024: ₹75.24 Crores

Change: -9.3%

The company has experienced significant improvements across all key financial metrics. Revenue from operations increased by 18.2%, reflecting robust business growth. Notably, profit has more than doubled, with a remarkable 113.3% increase, indicating enhanced profitability and operational efficiency. Additionally, the company successfully reduced expenses by 9.3%, contributing to overall financial health. These positive changes underscore a highly favorable performance trajectory for the company.

Balance Sheet Highlights

• Total Assets: ₹672.34 Crores, with an increase in fixed assets driven by investments in property and equipment.
• Debt-Equity Ratio: The company reduced its debt-equity ratio to 0.55 from 0.65, reflecting improved financial leverage and reduced dependency on debt.
• Cash Position: Net cash from operating activities was ₹24.14 Crores, reversing the previous year’s negative cash flow

Dupoint Analysis - Return on Equity

Peer Comparision

SWOT Analysis

Strenghts:

Strong Government Backing: Significant shareholding by the Government of Kerala (22%) provides stability and access to state-sponsored projects.
Diverse Business Segments: Operates in various sectors including infrastructure, renewable energy, and leasing, offering revenue stability.
Public-Private Partnership (PPP) Model: The PPP approach helps in mitigating risks and leveraging both public and private investments.
Strong Promoter Support: Backed by influential promoters like Mr. Yusuffali M.A., providing financial and strategic strength.

Weakness:

High Dependence on Government Projects: A large portion of revenue depends on government contracts, which could be susceptible to policy changes or delays.
Limited Geographical Presence: Primary operations are focused on Kerala, limiting opportunities for growth beyond the region.
Leverage Concerns: Though improving, the debt-equity ratio is relatively high, indicating reliance on debt for growth.

Opportunites:

Infrastructure Development in Kerala: Increased government spending on infrastructure presents significant growth potential.
Renewable Energy Expansion: Rising demand for renewable energy projects, especially solar, offers new revenue streams.
Urbanization and Smart Cities: Opportunities to participate in urban development and smart city projects in Kerala and potentially in other states.
Diversification: Potential to expand into other states or sectors beyond current operations.

Threats:

Regulatory Risks: Changes in government policies or regulations could impact ongoing and future projects.
Economic Downturn: Economic slowdown could reduce government spending on infrastructure, directly affecting revenue.
Competitive Pressure: Increasing competition from both local and national players in the infrastructure and renewable energy sectors.
Project Delays: Delays in project execution could lead to cost overruns and impact profitability.

Industry Overview

• Industry Sector: Inkel Ltd operates within the infrastructure development and project management sector, a vital industry in India's economy.
• Primary Business Areas: The company is involved in Project Management Consultancy (PMC) and Engineering, Procurement, and Construction (EPC), focusing on large-scale public infrastructure projects.
• Industry Characteristics:
    High capital intensity.
    Long project cycles.
    Significant government involvement.
• Growth Potential: The sector is expected to experience substantial growth due to India's ongoing urbanization and increasing infrastructure needs.
  Strategic Alignment: Inkel Ltd's operations align with national development priorities, such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
  Competitive Position: The company’s expertise in managing complex projects positions it well to benefit from the growing demand for infrastructure modernization and development in India.

Inkel Annual Report 2023-24

Inkel Annual Report 2022-23

Inkel Annual Report 2021-22

Inkel Annual Report 2020-21