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Rajesh Power
Our verdict on Rajesh Power isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company successfully listed in December 2024 and reported a 189% YoY growth in net worth to INR 322 crore, indicating the successful infusion and utilization of capital to strengthen the balance sheet. (3 met across 3 tracked commitments)
“➢ Raised Rs. 160 Cr ➢ Objects of the Issue: ➢ Capital Expenditure ➢ Additional Working Capital Requirement ➢ General Corporate Purposes”
Management reported significant progress in the distribution segment, specifically noting that 50,000 kilometres of medium voltage covered conductor are currently installed or under progress, which significantly exceeds the previously stated 27,300 km target. (1 in progress, 1 exceeded across 2 tracked commitments)
“Faster Project Execution Projects are completed within 18 to 24 months, faster than traditional multi-year transmission EPC projects.”
The company reported a 99% 3-year CAGR for total revenue in FY26, significantly exceeding the 40% target. (1 exceeded, 1 missed, 1 met across 3 tracked commitments)
“Certainly. Based on current market opportunities and our future projections, we anticipate achieving a CAGR of around 40% across all key metrics over the next few years.”
The EBITDA margin for FY26 was 12.11%, which is below the guided range of 13% to 14%. (1 missed across 1 tracked commitment)
“Yeah, absolutely. I mean, we are targeting to deliver the same level of margins as consistently... So, we are expecting it to be sustainable for the coming time.”
The company has signed MoUs for massive overhead-to-underground HT line conversion projects in Gujarat. — target: ₹4,754 crore
“Signed MoUs worth ₹4,754 crore with the Government of Gujarat during the inaugural Vibrant Gujarat Regional Conference 2025. The projects focus on converting overhead HT lines into underground cable networks across Gujarat”
See the full cited Management analysis of Rajesh Power
How durable is the business?
The segment has seen massive expansion, with consolidated revenue surging 289% year-on-year, driven by urban distribution network upgrades under the Revamped Distribution Sector Scheme (RDSS). (2 expanding)
“Consolidated revenue surged to ₹1,107 crore, representing a 289% year-on-year growth... Our portfolio included... urban distribution network upgrades under the Revamped Distribution Sector Scheme for state utilities.”
The transmission segment is expanding its technical scope, now securing high-value contracts for 220/66kV GIS/AIS Substations and 132kV underground cable systems. (5 expanding)
“These esteemed contracts encompass... design, engineering, manufacturing, and commissioning of 220/66kV GIS/AIS Substations, along with the erection and commissioning of 132kV/66kV underground cable systems throughout Gujarat.”
While still 100% India-focused, the company is actively expanding its geographic footprint from its Gujarat stronghold into Rajasthan and Madhya Pradesh. (2 expanding)
“Presence in states: 5... Class “AA” Rated in Gujarat, Class “A” Rated in Rajasthan & Madhya Pradesh”
The company's financial position has strengthened significantly following its IPO, with the Debt-to-Equity ratio improving from 0.31 to 0.21, indicating very low leverage. (2 expanding)
“Debt to Equity Ratio FY26 0.31”
The company's technology moat is strengthening through HKRP Innovations, which successfully centralized over 1,500 substations onto a single SCADA platform. (4 expanding, 1 stable)
“HKRP offers IoT and SCADA solutions for Smart Grid & Smart RE sector... HKRP executed the project of centralization of more than 1500+ Distribution Substations on a single SCADA platform”
See the full cited Business Model analysis of Rajesh Power
Where does growth come from?
The order book has reached a massive scale of Rs. 3,628 Cr as of May 2025, providing multi-year revenue visibility. This represents a significant jump from the scale of operations in previous years. (5 accelerating across 5 signals, 2 leading indicators)
“Revenue from Operations: FY26 1,627.94 Cr, FY25 1,072.07 Cr, YoY (%) 51.85%”
The company is benefiting from a major government policy (NEP 2026) that mandates underground cabling in large cities, a core area of expertise for the company.
“Underground cabling & N-1 redundancy in cities >10 lakh population by 2032... Underground cabling and network redundancy create new EPC opportunities”
Operating margins are holding steady at approximately 12% despite the massive scale-up in revenue. While there was a slight dip from H1 to H2, the overall annual margin remains consistent with the previous year's performance. (3 steady, 1 accelerating across 4 signals)
“EBITDA Margin (excluding other income): FY26 12.11%, FY25 11.56%”
The company maintains a massive order backlog of ₹3,326 Cr, providing multi-year revenue visibility. This is supported by a strong inflow of ₹2,743 Cr during FY26 alone. (1 steady across 1 signal)
“Unexecuted Consolidated Order Book + L1 Rs. 3,326 Cr* (as of 31st March 2026) ... FY26 Order Inflow : Rs. 2,743 Cr”
The bid pipeline is accelerating rapidly as the company expands into new states like Uttarakhand and Rajasthan, with management expecting the pipeline to reach INR 5,000 crore in the coming months. (2 accelerating across 2 signals)
“Yeah. So, Naman, order bid pipeline currently that are low hanging is roughly around INR 2,000 crore, but we are expecting it to reach around INR 5,000 crore in the coming months”
See the full cited Future Growth analysis of Rajesh Power
What could break the thesis?
Working capital pressure is intensifying. Trade Receivables jumped from ₹114.04 Cr in FY24 to ₹187.49 Cr in FY25. Trade Payables surged even more sharply from ₹31.44 Cr to ₹120.74 Cr, indicating the company is increasingly relying on supplier credit to fund operations. (5 intensifying, 2 high-severity)
“Trade Payables 120.51 328.32 ... Trade Receivables 181.71 348.77”
Concentration in Gujarat is intensifying in the near term due to massive new MoUs signed with the Government of Gujarat worth ₹4,754 crore, further anchoring the company's future revenue to a single state's infrastructure spending. (1 intensifying)
“Gujarat – Transmission & Distribution: Significant T&D opportunity in Gujarat, driven by emerging mega solar cluster”
The company's growth is highly dependent on the continuation of specific government policies and national electricity targets. [REGULATORY]
“Draft National Electricity Policy (NEP) 2026 – Growth Tailwinds for Rajesh Power... Policy direction aligns with Rajesh Power’s execution strength”
Margins are stabilizing but remain under pressure. While EBITDA margin was 12.08% for FY25 (vs 12.26% in FY24), the PAT margin dropped from 9.13% to 8.43% year-over-year, confirming that bottom-line growth is slightly lagging the massive revenue surge. (2 stable, 2 easing)
“PAT Margin 8.80% 9.01%”
STABLE. The company remains heavily reliant on Power Distribution, which still constitutes 71% of its unexecuted order book of ₹3,326 Cr as of March 31, 2026. While they are expanding into transmission, the core business remains concentrated. (1 stable)
“Unexecuted Consolidated Order Book + L1 Rs. 3,326 Cr... Power Distribution at Core (71%)”
See the full cited Risk analysis of Rajesh Power
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