Desco Infratech Limited is an integrated engineering and infrastructure firm providing end-to-end **Engineering, Procurement, and Construction (EPC)** and **Operations and Maintenance (O&M)** services. Since its inception in 2011 as a specialist in **City Gas Distribution (CGD)**, the company has evolved into a diversified energy infrastructure player. Following its **BSE SME listing in April 2025**, Desco has scaled its bidding capacity and expanded its footprint across **55+ cities** in **14 Indian states**, with a growing international presence in the Middle East. --- ### **Core Business Verticals & Revenue Mix** The company operates an **EPC-led model**, with approximately **90%** of revenue derived from construction contracts and **10%** from recurring O&M services. | Segment | Core Activities & Services | |:---|:---| | **Gas Distribution (CGD)** | Installation of **MDPE and Steel pipelines**; domestic, commercial, and industrial **PNG conversions**; gas-leak detection and emergency response. | | **Renewable Energy** | Solar infrastructure development; participation in the **Gujarat Hybrid Renewable Energy Park**; execution of orders for **KP Group**. | | **Water Infrastructure** | Projects under the **Jal Jeevan Mission**, including **HDPE piping**, overhead tanks, and well construction (e.g., Jhabua, MP project). | | **Power Distribution** | Installation of **LT/HT electrical cables** and power transmission infrastructure. | | **Bio-Energy (New)** | Production and distribution of **Biomethane and Bio-CNG**; organic by-products like bio-slurry and compost. | | **Support Services** | **Manpower Supply** (technical/administrative) and **Equipment/Vehicle Leasing** (construction machinery and commercial vehicles). | --- ### **Financial Performance & Growth Trajectory** Desco has demonstrated significant financial scaling, characterized by a **three-year Revenue CAGR of ~44%** and an **EBITDA CAGR of ~98%** leading up to FY25. **Comparative Financials (H1 FY26 vs H1 FY25):** * **Revenue from Operations:** Increased **85.74%** to **₹42.04 Cr** (from ₹22.63 Cr). * **EBITDA:** Grew **80.96%** to **₹8.99 Cr** (from ₹4.97 Cr). * **Profit After Tax (PAT):** Rose **89.93%** to **₹6.17 Cr** (from ₹3.25 Cr). * **EBITDA Margin:** Maintained at a healthy **21.38%**. **FY26 Guidance & Outlook:** * **Full-Year Revenue Target:** Management has guided for **₹108 Cr to ₹115 Cr**, implying a growth run rate of **90%–95%**. * **H2 FY26 Expectations:** Anticipated revenue of **₹65 Cr to ₹70 Cr** driven by project mobilization. * **Long-term Vision:** To become a **₹1,000 Crore** company with sustained high margins. --- ### **Order Book & Operational Scaling** The company’s order book provides high revenue visibility for the next **18–24 months**. * **Current Order Book:** Stands at over **₹345 Crore** (as of late 2025), comprising **₹307.13 Cr** in EPC and **₹26.38 Cr** in O&M. * **Bidding Capacity:** Post-IPO, the company has transitioned from small contracts to bidding for individual projects valued at **₹250 Crore and above**. * **FY25 Operational Milestones:** * **82%** increase in pipeline commissioning (**436.44 km**). * **72%** rise in ready-for-connection units. * **64%** growth in PNG conversions. --- ### **Strategic Expansion: Bio-Energy & Green Hydrogen** In 2025-2026, Desco aggressively pivoted toward the **Compressed Biogas (CBG)** and clean energy sectors: * **Acquisition:** Acquired **75%** of **Shri Green Agro Energies Private Limited** in February 2026 to reduce time-to-market. * **Subsidiary Formation:** Incorporated **Desco Bio Green Private Limited** to focus on waste-to-energy projects under the government’s **SATAT** program. * **Green Hydrogen:** Executed an MoU with **KPI Green Hydrogen** and **Naveriya Gas** to act as a technology partner for hydrogen generation and blending systems. --- ### **Capital Structure & Liquidity Management** Desco maintains a conservative financial profile to support its "front-loaded" working capital model, where capital is deployed for materials before client payments are realized. * **Debt Profile:** Maintains a **debt-free balance sheet** with a **Debt-to-Equity ratio of 0.10:1** (as of Sept 2025). * **Net Worth:** Increased to **₹58.87 Cr** in FY25 from **₹12.11 Cr** in FY24, following the IPO. * **Credit Facilities:** Sanctioned limits were enhanced in March 2026 to **₹18.00 Cr** (including **₹10.00 Cr** in Bank Guarantees) to support high-value contracts. * **IPO Proceeds:** In November 2025, the company reallocated **₹1.68 Crore** of unutilized IPO proceeds to **Working Capital** to accelerate project mobilization. --- ### **Client Portfolio & Geographical Reach** Desco serves **18+ major clients**, including marquee PSUs and private sector leaders: * **Key Clients:** Adani Total Gas, GAIL Gas, BPCL, IOCL, HPCL, Torrent Gas, and Gujarat Gas. * **Recent Mandates:** Secured a multi-state LOI from **BPCL** for pipeline laying across **Karnataka, West Bengal, Bihar, Maharashtra, Jharkhand, and Tamil Nadu**. * **International Expansion:** Established **Desco Global FZ LLC** in the **UAE (RAKEZ)** in March 2026 to explore Middle Eastern and Asian markets. --- ### **Risk Factors & Compliance Challenges** Despite strong growth, the company faces significant regulatory and operational hurdles: **1. Regulatory Enforcement:** * **SEBI Non-Compliance:** Facing penalties regarding **Regulation 33 and 76**. Failure to resolve these could lead to the **freezing of promoter shareholding** or transfer to the **'Z' Group** (trading suspension). * **Taxation:** Pending appeals regarding disputed matters under the **GST Act, 2017**, classified as **Contingent Liabilities**. **2. Operational Risks:** * **Safety:** The hazardous nature of gas and power infrastructure requires strict adherence to HSE standards. Desco is **ISO 9001:2015** certified and a recipient of the **Adani Samarthan Award** for safety. * **Working Capital:** High dependency on timely certification and payments from clients; any delays could strain liquidity. * **Collateral:** Directors have provided **personal properties and guarantees** as collateral for company loans, creating personal financial exposure. **3. External Dependencies:** * Execution is heavily dependent on timely approvals from the **PNGRB**, state governments, and local municipal authorities.