# **ANNU PROJECTS LIMITED (APL)** # **Comprehensive IPO Equity Research & Fundamental Analysis Report** **Listing Exchanges**: BSE & NSE (Mainboard) | **Date of Report**: August 20, 2026 | # **1\. Executive Summary & Investment Thesis** Company Overview Annu Projects Limited (APL), incorporated in 2003 and headquartered in New Delhi, is an integrated Engineering, Procurement, and Construction (EPC) infrastructure enterprise specializing in essential underground and overhead utilities infrastructure. APL operates across four core verticals: urban sewerage networks & wastewater treatment, optical fibre cable (OFC) telecom networks, city gas distribution (CGD) pipelines, and railway signalling/telecommunication. Over 21 years, the company has completed 362 infrastructure projects across India. **Core Investment Thesis** * **Massive Multi-Year Revenue Visibility**: Robust unexecuted order book of ₹1,005.10 Crore as of June 30, 2026, representing a high book-to-bill ratio of 4.17x FY26 revenue, providing clear multi-year cash flow visibility across government urban development and telecom rollouts. * **Consistent Top-Line & Profit Compounding**: Revenue from operations grew from ₹153.98 Cr in FY24 to ₹180.20 Cr in FY25, reaching ₹241.25 Cr in FY26 (+25.2% CAGR), while Profit After Tax (PAT) expanded at a 30.6% CAGR from ₹19.35 Cr to ₹33.00 Cr, supported by healthy operating EBITDA margins of 17.74%. * **100% Primary Capital Deployment**: The entire ₹175.06 Cr issue comprises fresh primary equity (zero Offer for Sale). The corporate treasury will deploy ₹115.00 Cr directly into working capital and ₹15.40 Cr into specialized horizontal directional drilling (HDD) and trenchless equipment, accelerating project execution speed. * **High Return Efficiency & Low Debt**: Operates with a Return on Capital Employed (ROCE) of 28.04% and Return on Net Worth (RoNW) of 21.27% in FY26, alongside a conservative Debt-to-Equity ratio of 0.18x. **Valuation & Outlook** Priced at a post-issue FY26 P/E of 19.64x (and 14.33x on pre-issue EPS) with a post-issue equity market capitalization of ₹648.38 Crore at ₹99/share. This compares favorably against listed utility EPC peers such as Likhitha Infrastructure (23.2x P/E), EMS Limited (29.4x P/E), and Vishnu Prakash R Punglia (24.5x P/E). **Core Investment Risks** Working capital intensity and negative operating cash flow (-₹35.45 Cr in FY26) due to contract retention money; Right-of-Way (RoW) approval delays for urban pipe-laying; and substantial contingent liabilities (₹111.30 Cr) primarily consisting of performance bank guarantees. # **2\. Issue Structure & Deal Parameters** | Parameter | Details / Metrics | | :---- | :---- | | **Issuer** | Annu Projects Limited (APL) | | **Issue Structure** | 100% Fresh Mainboard Book Built Issue (BSE & NSE) | | **Total Issue Size** | ₹175.06 Crore (1,76,83,000 Equity Shares at ₹99) | | **Fresh Issue** | ₹175.06 Crore (100% Primary Capital) | | **Offer for Sale (OFS)** | Nil (0 Shares) | | **Price Band** | ₹94.00 – ₹99.00 per equity share (Face Value: ₹10.00) | | **Lot Size** | 151 Equity Shares (Min Retail Application: ₹14,949) | | **Subscription Period** | August 25, 2026 – August 28, 2026 | | **Basis of Allotment** | August 31, 2026 | | **Tentative Listing Date** | September 02, 2026 | | **Post-Issue Market Cap** | ₹648.38 Crore (at upper price band) | | **Book Running Lead Manager** | Mefcom Capital Markets Limited | | **Registrar** | KFin Technologies Limited | | **Pre-Issue Share Capital** | 4,78,09,670 Equity Shares | | **Post-Issue Share Capital** | 6,54,92,670 Equity Shares | | **Issue Allocation** | QIB: 50% | NII / HNI: 15% | Retail: 35% | ### **Objects of the Fresh Issue (Net Proceeds Utilization)** 1. **Funding Purchase of Specialized Equipment & Trenchless Machinery**: ₹15.40 Crore for acquiring advanced HDD rigs, excavators, and fusion jointing sets. 2. **Funding Working Capital Requirements for EPC Contracts**: ₹115.00 Crore. 3. **General Corporate Purposes & Issue Expenses**: \~₹44.66 Crore. # **3\. Business Model, Infrastructure Verticals & Order Book** **Core Operating Verticals** * **Sewerage Infrastructure (52.7% of FY26 Revenue)**: Turnkey execution of underground sewerage networks, sewage pumping stations (SPS), sewage treatment plants (STPs), and storm-water drainage under AMRUT and Smart Cities schemes. * **Telecom Infrastructure (41.5% of FY26 Revenue)**: Trenchless optical fibre cable (OFC) laying, dark fibre construction, FTTH rollouts, mobile tower infrastructure, and long-term network operations/maintenance. Over 26,200 km OFC laid and 62,800+ km under active maintenance contracts. * **City Gas Distribution (CGD) Pipelines**: Medium Density Polyethylene (MDPE) pipeline laying, carbon steel pipeline grid installation, and domestic/commercial Piped Natural Gas (PNG) connections (over 537 km pipeline laid and 38,300+ connections). * **Railway Signalling & Telecommunication**: Electronic interlocking, track circuiting, and railway communication network integration. **Robust Order Book Structure** * Total outstanding order book stands at ₹1,005.10 Crore across 23 ongoing projects as of June 30, 2026\. * Telecom infrastructure contracts comprise 82.9% of the unexecuted order book, supplemented by multi-year municipal sewerage and city gas projects. # **4\. Financial Statement Analysis (3-Year Restated Financials)** *Values in ₹ Crore unless otherwise stated* | Financial Metric | FY24 (Audited) | FY25 (Audited) | FY26 (Audited) | 3-Yr CAGR / Growth | | :---- | :---- | :---- | :---- | :---- | | **Revenue from Operations** | ₹153.98 | ₹180.20 | ₹241.25 | \+25.17% CAGR | | **Total Income** | ₹155.40 | ₹181.80 | ₹243.80 | \+25.26% CAGR | | **Civil Construction Costs** | ₹112.50 | ₹128.40 | ₹168.20 | \- | | **Employee Benefits Expense** | ₹12.40 | ₹14.80 | ₹19.60 | \- | | **Operating EBITDA** | ₹21.40 | ₹28.50 | ₹42.80 | \+41.42% CAGR | | **EBITDA Margin (%)** | 13.90% | 15.82% | 17.74% | \+384 bps expansion | | **Finance Costs** | ₹2.80 | ₹3.40 | ₹3.90 | Low debt load | | **Depreciation** | ₹2.10 | ₹2.80 | ₹3.80 | \- | | **Profit Before Tax (PBT)** | ₹16.50 | ₹22.30 | ₹35.10 | \+45.85% CAGR | | **Profit After Tax (PAT)** | ₹19.35\* | ₹28.40 | ₹33.00 | \+30.59% CAGR | | **PAT Margin (%)** | 12.57% | 15.76% | 13.68% | Industry-leading | | **Net Worth / Equity** | ₹98.20 | ₹126.60 | ₹159.20 | \+27.32% CAGR | | **Total Borrowings** | ₹24.50 | ₹29.80 | ₹28.40 | Debt/Equity: 0.18x | | **Return on Net Worth** | 19.70% | 22.43% | 21.27% | Sustained \>20% | | **Return on Cap. Employed** | 22.40% | 26.80% | 28.04% | \+564 bps exp. | | **Diluted Pre-Issue EPS (₹)** | ₹4.05 | ₹5.94 | ₹6.91 | \+30.61% CAGR | | **Diluted Post-Issue EPS (₹)** | ₹2.95 | ₹4.34 | ₹5.04 | Post-dilution basis | *\*Note: FY24 PAT includes deferred tax adjustments; FY26 net margin of 13.68% reflects core operational performance.* # **5\. Peer Benchmarking & Valuation Analysis** | Company Name | Market Cap (₹ Cr) | FY26 Revenue (₹ Cr) | EBITDA Margin (%) | Post-Issue P/E (x) | ROE (%) | ROCE (%) | | :---- | :---- | :---- | :---- | :---- | :---- | :---- | | **Annu Projects Limited** | **₹648.38** | **₹241.25** | **17.74%** | **19.64x** | **21.27%** | **28.04%** | | Likhitha Infrastructure | ₹940.00 | ₹421.68 | 15.20% | 23.17x | 9.37% | 14.80% | | EMS Limited | ₹2,250.00 | ₹793.31 | 24.80% | 29.38x | 8.62% | 16.50% | | Bondada Engineering | ₹2,840.00 | ₹800.72 | 12.40% | 16.60x | 28.82% | 29.40% | | Vishnu Prakash R Punglia | ₹3,400.00 | ₹1,480.00 | 13.80% | 24.50x | 18.20% | 21.40% | ### **Valuation Synthesis** * At the upper price band of ₹99, APL commands an equity valuation of ₹648.38 Crore and an EV of \~₹665 Crore. * Based on FY26 post-issue annualized EPS of ₹5.04, the issue is priced at 19.64x P/E (and 14.33x on pre-issue earnings), representing an attractive 15–30% discount compared to listed utility peers like EMS Limited (29.4x) and Likhitha Infrastructure (23.2x). * APL commands superior return ratios (ROCE of 28.04% vs peer average of \~18%) and higher net margins (13.68%), providing solid fundamental valuation support. # **6\. Scenario Analysis & 12-Month Target Price Projections** **Bull Case (Target Price: ₹138 – ₹148 | \+39% to \+49%)** * High-speed order conversion on the ₹1,005 Cr order book drives 35%+ revenue growth in FY27; working capital infusion eliminates execution bottlenecks. * EBITDA margins sustain at 18.0%+; PAT reaches ₹45–48 Cr in FY27. * Valuation multiple re-rates toward 22–24x P/E in line with established water/utility EPC peers. **Base Case (Target Price: ₹115 – ₹125 | \+16% to \+26%)** * Revenue grows at 20–25% CAGR; net margin normalizes around 12.5–13.0%. * P/E trades in the 19–21x range on FY27 estimated EPS of \~₹6.0–₹6.3. **Bear Case (Target Price: ₹80 – ₹86 | \-13% to \-19%)** * Right-of-Way clearances and municipal election cycles delay project billing milestones. * Operating cash flows remain negative; multiple de-rates to 14–15x. # **7\. Key Investment Risks & CFA Compliance Disclosures** 1. **Working Capital & Cash Flow Divergence**: Operating cash flow was negative (-₹35.45 Cr in FY26) due to capital tied up in contract retention money, security deposits, and unbilled revenue milestones. 2. **Right-of-Way & Regulatory Approvals**: Underground utilities (trenchless OFC and city sewerage lines) require multi-agency municipal and highway permissions, which are susceptible to administrative delays. 3. **High Contingent Liabilities**: Contingent liabilities stood at ₹111.30 Crore, primarily comprising performance bank guarantees issued to government authorities and corporate telecom clients. 4. **Client & Sector Concentration**: Telecom and municipal sewerage projects generate \~94% of total revenue. Any reduction in 5G fiberization capex or urban municipal funding would impact order inflows. **Disclosure**: This report has been prepared for research and investment evaluation following VPW standards. Valuation projections and scenario targets represent probabilistic financial models based on RHP data and peer market multiples. Past financial performance does not guarantee future market returns.