Ramky Infrastructure Limited — Credit Ratings, 20-12-2024: Credit Rating- New

Total Operating Income for Ramky Infrastructure Limited (RIL) experienced a robust year-on-year growth of approximately 31%, reaching ₹2,033.19 crore for FY24, up from ₹1,473.99 crore in FY23. This growth is largely attributed to steady contract execution and expansion in project scale amidst a strong order book of ₹8,170.44 crore as of September 30, 2024, which ensures revenue visibility in the medium term.

In terms of profitability, RIL reported a net profit of ₹360.22 crore for FY24, an increase from ₹214.47 crore in FY23. This aligns with an improved Earnings Per Share (EPS) of ₹9.18, underpinned by enhanced operational efficiencies reflected in EBITDA margins rising from 20.50% to 23.82%. The company's total debt has also reduced significantly to ₹446.48 crore from ₹594.29 crore, showcasing effective debt management and improved financial health, with an interest coverage ratio of 7.09x.

Operational costs are tracking positively, with a focus on high-revenue projects contributing to margin expansion. However, RIL faces challenges from exposure to group companies and ongoing disputes related to bank guarantees, which could influence liquidity and financial flexibility.

In evaluating strategic positioning, RIL appears to be targeting stability through project execution while managing risks associated with competitive pressures and fluctuating raw material costs. Given the healthy outlook, sustained growth, and solid order book, investors may consider adopting a buy stance, factoring in potential risks from project execution delays and market competition.