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Supreme Infrastructure India Ltd

| Annual Report for the Financial Year 2024-25

BEARISH SENTIMENT

Report Source

⬤6th Jan 26

Summary : Supreme Infrastructure India Limited faces significant financial distress with negative net worth, substantial losses, and qualified audit opinions, despite government infrastructure initiatives and a debt restructuring plan.

Annual Report Analysis & Insights

Financial Disclosures

  1. Standalone Total Expenses: ₹ 1,50,836.10 Lakhs (FY25).
  2. Consolidated Total Expenses: ₹ 1,50,845.60 Lakhs (FY25).
  3. Standalone Finance Costs: ₹ 1,38,531.80 Lakhs (FY25).
  4. Consolidated Finance Costs: ₹ 1,38,531.80 Lakhs (FY25).
  5. Trade receivables (unsecured, considered good & undisputed) over 3 years: ₹ 78,299.07 Lakhs (March 31, 2025).
  6. Trade receivables (disputed-credit impaired) over 3 years: ₹ 15,016.14 Lakhs (March 31, 2025).
  7. Standalone Revenue from Operations: ₹ 6,616.56 Lakhs (FY25).
  8. Standalone Other Income: ₹ 1,721.76 Lakhs (FY25).
  9. Consolidated Revenue from Operations: ₹ 6,616.56 Lakhs (FY25).
  10. Consolidated Other Income: ₹ 1,721.77 Lakhs (FY25).
  11. Segment Revenue (Engineering and construction): ₹ 6,616.56 Lakhs (FY25).
  12. Standalone Net cash generated from operating activities: ₹ 1,096.59 Lakhs (FY25).
  13. Standalone Net cash used in investing activities: ₹ (302.46) Lakhs (FY25).
  14. Standalone Net cash generated from financing activities: ₹ (825.24) Lakhs (FY25).
  15. Consolidated Net cash generated from operating activities: ₹ 1,096.56 Lakhs (FY25).
  16. Consolidated Net cash used in investing activities: ₹ (302.46) Lakhs (FY25).
  17. Consolidated Net cash generated from financing activities: ₹ (825.24) Lakhs (FY25).
  18. Claims not acknowledged as debts: ₹ 933.76 Lakhs (March 31, 2025).
  19. Corporate guarantees to banks on behalf of subsidiaries/JVs: ₹ 1,53,315.69 Lakhs (March 31, 2025).
  20. Indirect tax liability in appeal: ₹ 11,987.26 Lakhs (March 31, 2025).
  21. Provident Fund liability not determinable due to legal uncertainty.
  22. Standalone Total Assets: ₹ 2,65,573.46 Lakhs (March 31, 2025).
  23. Standalone Total Equity: ₹ (6,22,832.62) Lakhs (March 31, 2025).
  24. Consolidated Total Assets: ₹ 2,67,038.78 Lakhs (March 31, 2025).
  25. Consolidated Total Equity: ₹ (6,23,438.08) Lakhs (March 31, 2025).
  26. Loans taken from KMP and other related parties: ₹ 17,814.79 Lakhs (FY25).
  27. Loans repaid to KMP and other related parties: ₹ 176.75 Lakhs (FY25).
  28. Outstanding trade receivables from related parties: ₹ 6,836.17 Lakhs (March 31, 2025).
  29. Both standalone and consolidated financial statements are presented.
  30. Consolidated statements include parent, subsidiaries, associates, and joint arrangements.
  31. Previous year consolidated figures for SIBPL are unaudited due to non-consolidation.

Corporate Overview

  1. Primarily operates in India.
  2. Tenuous global economy amid persistent uncertainty and geopolitical tensions.
  3. Risks from rising trade policy uncertainty and tariff escalations.
  4. Fiscal vulnerabilities and climate-related extreme weather events.
  5. Significant net loss and accumulated losses, eroding net worth.
  6. Current liabilities exceed current assets, indicating liquidity issues.
  7. Defaults in repayment of principal and interest on borrowings.
  8. Significant reliance on government promoted entities for revenue.
  9. Dependent on government infrastructure projects and policies.
  10. Engaged in Engineering, Procurement, and Construction (EPC) of roads, highways, buildings, bridges.
  11. Operates Ready Mix Concrete (RMC) plants, Asphalt plants, and Crushing plants.
  12. Committed to delivering long-term value for all stakeholders.
  13. Aligning growth with sustainability, governance, and innovation.
  14. Dedicated to building a robust, diverse, and future-ready workforce.
  15. Mainly government promoted entities with strong creditworthiness.
  16. Other customers are also part of the clientele.
  17. Revenue primarily from Engineering and Construction contracts.
  18. Revenue from sale of products.
  19. Owns and operates RMC, Asphalt, and Crushing plants.
  20. Proposed to increase overall borrowing limit to Rs. 5,000 crores.
  21. Commitment to fund infrastructure development through debt and equity.

Risk Factors

  1. Material uncertainty regarding company's going concern.
  2. Qualified audit opinion on financial statements.
  3. Significant defaults in loan repayments.
  4. Subsidiaries under insolvency resolution process.

Key Drivers

  1. Government infrastructure push (PM Gati Shakti).
  2. Preferential equity allotment by promoters/investors.
  3. NCLT approved debt settlement scheme.
  4. Focus on margin discipline and risk management.

Auditor’s Report

  1. Qualified Opinion
  2. Recognition of contract revenue, margin, and costs due to complex contractual obligations.
  3. Material uncertainty related to going concern due to significant losses and negative net worth.
  4. Corporate guarantees to subsidiary/group company lenders where defaults occurred.
  5. Management believes no liability required as guarantees not invoked and part of Scheme of Arrangement.

Board Commentary

  1. Re-appointment of Mr. Bhawani Shankar Harishchandra Sharma as Director.
  2. Appointment of Mr. Chander Prakash Sharma as Independent Director for five years.
  3. Appointment of M/s Amruta Giradkar and Associates as Secretarial Auditor for five years.
  4. Ms. Mamta Chaoji resigned as Company Secretary; Mr. Sandeep Lengare appointed.
  5. No dividend recommended for the year to conserve resources.
  6. Business Risk Management Framework identifies enterprise and project level risks.
  7. Key risk categories include strategic, financial, and operational risks.
  8. Material uncertainty regarding going concern due to financial distress.
  9. Scheme of Arrangement with financial creditors approved by NCLT on March 28, 2025.
  10. Six subsidiaries are currently under CIRP or Liquidation Process.
  11. Delayed filing of certain forms with ROC, resulting in fines.
  12. Non-submission of Large Corporate entity declaration to stock exchange.
  13. Three directors disqualified under Companies Act, 2013.
  14. Chairman continued directorship beyond 75 years without special resolution.
  15. Failure to upload trading window closure intimations for multiple quarters.
  16. Company Secretary office vacant for over six months.
  17. Delayed filing of Form SH-7 and PAS-3 for share capital changes.
  18. Non-filing of Form DPT-3 (annual return of deposits) for FY 2024-25.
  19. AGM for FY 2023-24 not held within stipulated time, impacting statutory filings.
  20. Defaulted in repayment of borrowings to banks and financial institutions.
  21. Not filing quarterly returns due to NPA classification of accounts.
  22. Increased borrowing limit to Rs. 5,000 crores from Rs. 3,000 crores.
  23. Raised equity through preferential allotment to settle existing lenders.
  24. Issued 7,10,37,388 equity shares and 2,21,12,953 warrants.
  25. Lenders being issued 45,43,363 equity shares by converting loans.

Corporate Governance

  1. Policy on Prevention and Redressal of Sexual Harassment in place.
  2. Internal Complaints Committee duly constituted.
  3. Code of Conduct for Prohibition of Insider Trading implemented.
  4. Whistle Blower Policy/Vigil Mechanism formulated and accessible.
  5. Board comprises 6 Directors, with 3 being Independent Directors.
  6. All Independent Directors meet prescribed independence criteria.
  7. Four statutory committees: Audit, Nomination & Remuneration, Stakeholders’ Relationship, CSR.
  8. Audit Committee comprises four directors, mostly independent, with financial literacy.
  9. Board meetings exceeded maximum permissible gap.
  10. AGM not held on schedule, statutory filings delayed.
  11. Failure to upload trading window closure intimations.
  12. Company Secretary vacancy exceeded six months.
  13. Delayed filings for authorized share capital and share allotments.
  14. Non-filing of annual return of deposits (Form DPT-3).
  15. Disqualification of three directors under Companies Act, 2013.
  16. Chairman continued directorship beyond 75 years without special resolution.

Management Discussion & Analysis

Future Strategy

  1. Leverage multi-sector presence and execution expertise.
  2. Prioritize margin discipline, prudent risk management, and sustainable practices.
  3. Capitalize on opportunities from India’s infrastructure push.
  4. Deliver long-term value by aligning growth with sustainability and innovation.

Industry Overview

  1. India's infrastructure sector is a vital growth driver, contributing 7-8% to GDP.
  2. PM Gati Shakti and Bharatmala Pariyojana to drive strong demand for EPC services.
  3. Rising urbanization, industrial corridors, and green mobility create multi-year opportunities.

Macroeconomic Outlook

  1. Global growth projected at 3.0% in 2025, rising to 3.1% in 2026.
  2. Global inflation expected to moderate to 4.2% in 2025 and 3.6% in 2026.
  3. India's GDP growth projected at 6.5% in 2025–26, driven by domestic demand.
  4. Indian inflation aligned with RBI's 4% target band.
  5. External sector resilient with narrowed current account deficit.

Operational Focus Areas

  1. Building a robust, diverse, and future-ready workforce.
  2. Streamlining structures and embracing digital technologies.
  3. Reinforcing a value-driven culture.
  4. Launching specialized recruitment campaigns and tailored learning programs.

Performance Drivers

  1. Sustained public investment in infrastructure.
  2. Union Government’s record capital expenditure outlay.
  3. Structural reforms like PM Gati Shakti and Bharatmala.

Risk Control Measures

  1. Developing appropriate strategies to mitigate identified risks.
  2. Management confident in resolving trade receivables and subsidiary CIRP issues.
  3. Believes net-worth of subsidiaries does not reflect true market value.

Critical Risks

  1. Land acquisition delays causing project delays and resource idling.
  2. Increasingly stringent contract terms exerting pressure on working capital.
  3. Prolonged timelines for statutory approvals creating project schedule delays.
  4. Extreme weather events and construction bans posing operational challenges.
Supreme Infrastructure India Ltd (SUPREMEINF) Annual Report Analysis & Insights | Dhanarthi