Vivid Electromech Limited is an Indian engineering company originally incorporated on August 10, 1990, and subsequently converted into a public limited company on February 12, 2025. 

The company is based in Navi Mumbai, Maharashtra, with its registered office located in the T.T.C Industrial Area, MIDC, Kharine. Its promoters are Mr Sameer Vishvanath Attavar, Mrs Meeta Sameer Attavar, and Mr Hardik Dinesh Shah. The company has launched an SME IPO consisting of a fresh issue of up to 18.84 lakh equity shares and an offer for sale of up to 4.68 lakh equity shares. The proposed listing is on the NSE Emerge (SME platform of NSE), making this the company’s first public market offering.

Let’s deep dive into the company

Industry analysis 

India’s capital goods manufacturing industry plays a crucial role across engineering, construction, infrastructure, and consumer sectors, contributing 1.9% to GDP. The Quick Estimates of IIP reached 150.9 in October 2025, with mining at 126.2, manufacturing at 151.1, and electricity at 193.4. The heavy engineering and machine tools segment remains vital, with production rising from Rs. 2,29,533 crore in CY15 to Rs. 4,29,001 crore in CY24. Electrical equipment leads the sector and is projected to grow from US$ 52.98 billion in 2022 to US$ 125 billion by 2027. Government initiatives and strong exports of Rs. 9,86,328 crore in FY25 support sustained industrial expansion and infrastructure development. Simultaneously, India has emerged as a leading global data-centre market, with capacity projected to triple from ~870 MW in 2023 to 2,500 MW by 2027, and the market expected to reach US$ 15 billion by 2030.

Business Model 

The company is an ISO 9001:2015 certified manufacturer of Low-Voltage (“LV”) and Medium-Voltage (“MV”) electrical panels and automation systems, with over 30 years of operational history. We provide end-to-end solutions, including design, fabrication, assembly, testing, and commissioning of control and automation systems. Our LV electrical panel product range includes PCC, IMCC, MCC, DG Synchronization, Power Distribution Board, and Outdoor Panels, while our MV electrical panel product range covers 3.3 kV to 33 kV panels and includes specialised products such as VCB Panel, Control & Relay Panels, RMG, and APFC Panels. Our products, type-tested under IEC standards, cater to sectors including Data Centre & Technology, Infrastructure, Construction & Real Estate, including Metro Projects, Solar & Renewable Energy, Industrial Manufacturing and Machinery, etc.

Working Capital Cycle 

With a cash conversion cycle of ~5 days in FY25 (vs negative cycle in FY23–FY24), the business reflects a relatively efficient working capital structure, supported by strong supplier credit offsetting receivables and inventory requirements

Structural Characteristics
Vivid Electromech Limited operates in a fragmented, SME-dominated electromechanical and electrical equipment segment characterised by high competition and moderate pricing power, where differentiation is limited unless supported by execution capability, technical expertise, or client relationships. The business is capital-intensive and project-driven, with revenues dependent on order inflows and execution timelines rather than recurring demand, leading to inherent cash flow variability. As a result, performance in this industry is largely driven by execution efficiency, cost management, and working capital discipline, rather than strong structural entry barriers or durable moats.

Business Segment
Vivid Electromech operates in the electromechanical equipment and electrical control systems segment, manufacturing and supplying electrical panels, control systems, and automation solutions for industries such as power distribution, infrastructure, and industrial manufacturing. The business is B2B and order-driven, with demand linked to industrial capex, infrastructure development, and power sector investments, making it dependent on project cycles and client-specific requirements.

FY25 Highlights
 • Revenue from Operations: ₹155.29 Cr
 • Cost of Material Consumed: ₹100.24 Cr
 • Gross Spread: ₹43.10 Cr
 • Gross Margin: ~27.8%

The company operates with a material-heavy cost structure, where procurement of electrical components and raw materials forms the majority of expenses. The gross margin reflects value addition through manufacturing, system integration, and customisation of electromechanical solutions, driven by project-based execution and engineering capabilities.

The cost structure has shifted materially from FY23–FY25, with FY25 introducing a meaningful trading component — Purchase of Stock-in-Trade scaling from a negligible ₹0.09 Cr in FY23 to ₹11.95 Cr in FY25 (7.7% of revenue) — altering margin comparability across years. Simultaneously, raw material intensity has compressed meaningfully, with the cost of materials as a proportion of revenue declining from ~84.6% in FY23 to ~64.5% in FY25, reflecting favourable product mix evolution and improved procurement leverage on a higher revenue base. While EBITDA has expanded sharply from ₹1.76 Cr to ₹28.39 Cr, with margins widening from 2.96% to 18.28%, this improvement is driven not just by scale but also by the progressive dilution of high-intensity manufacturing costs as the trading segment scales. Finance costs have, on a reported FY23–FY25 basis, declined from ₹1.13 Cr to ₹0.52 Cr, supported by disciplined debt reduction; however, the balance sheet as at 30-Sep-25 reveals a sharp surge in long-term borrowings to ₹9.68 Cr (vs. ₹0.23 Cr at 31-Mar-25), signaling that near-term capacity expansion will be increasingly leverage-supported and warrants close monitoring of debt-service coverage going forward.

Working Capital Movement

• Inventory: ₹8.86 Cr (FY23) → ₹6.34 Cr (FY24) → ₹18.95 Cr (FY25)
 • Trade Receivables: ₹18.06 Cr (FY23) → ₹26.18 Cr (FY24) → ₹60.55 Cr (FY25)
 • Total Borrowings (FY25): ₹4.23 Cr (Short-term: ₹4.01 Cr + Long-term: ₹0.23 Cr)

The growth in operations has been accompanied by a disproportionate increase in trade receivables — scaling 3.4x from ₹18.06 Cr in FY23 to ₹60.55 Cr in FY25 — indicating that revenue growth is significantly outpacing collections and placing meaningful pressure on operating cash flows. Inventory, while relatively contained in FY24 (₹6.34 Cr), has since expanded to ₹18.95 Cr in FY25, consistent with the company's increasing material procurement activity as the traded goods segment scales. Encouragingly, total on-balance-sheet borrowings remain moderate at ₹4.24 Cr as at 31-Mar-25

Financial Analysis (₹ in Crores)

*Certain metrics have been derived based on available financial data from RHP

Peer Comparison

*Certain metrics have been derived based on available financial data from RHP

Sector Specific Ratios Peer Analysis

Structural Analysis
The business exhibits a procurement-heavy manufacturing and trading structure, with raw materials and purchased stock-in-trade collectively accounting for approximately 72% of FY25 revenue, indicating that value addition — while improving — remains closely tied to input cost dynamics. The working capital cycle data reinforces this: receivable days have extended to 102 days in FY25 (vs. 91 days in FY24), and while payable days of 127 days provide some offset, the cash conversion cycle has turned positive at 5 days in FY25 versus a negative cycle in prior years — a structural tightening that warrants attention as scale increases.

While revenue has grown 2.6x and EBITDA nearly 14x over FY23–FY25, this expansion is accompanied by a sharp and accelerating build-up in receivables, reflecting a model that requires significant working capital to sustain scale. The relatively lean employee cost base (6.2% of revenue in FY25) and contained overheads suggest an operationally efficient setup, but also confirm that margin sustainability is primarily contingent on execution discipline and material cost management, rather than structural pricing power or service-led differentiation.

The concurrent rise in receivables and inventory — alongside the H1FY26 debt escalation — highlights a capital-intensive growth model where internal accruals alone are unlikely to be sufficient to fund the next phase of expansion. This creates a structure where growth remains closely linked to funding availability, and operating cash flows may continue to lag reported profits due to capital being locked in the working capital cycle. Overall, the business is characterised by high-growth supported by working capital deployment, moderate operating leverage, and a demonstrable dependence on efficient capital and receivables management for long-term sustainability.

Primary Business Strategy – Vivid Electromech Limited

1. Working Capital Management & Balance Sheet Support: As of FY25, the business reflects elevated working capital deployment, with inventory (~₹18.95 Cr) and receivables (~₹60.55 Cr) forming a significant portion of total assets. The company carries borrowings of ~₹4.24 Cr, indicating moderate dependence on external funding at present; however, the sharp rise in receivables highlights increasing capital lock-up. The IPO proceeds (fresh issue component) are expected to support working capital requirements and strengthen liquidity, enabling smoother execution of higher order volumes.

2. Procurement Efficiency & Margin Sustainability: In FY25, material cost (~₹100.24 Cr), along with the purchase of stock-in-trade (~₹11.95 Cr) together account for a substantial portion of revenue, making procurement efficiency and vendor management critical. The company reported an EBITDA margin of ~18.5%, reflecting improved operating leverage and cost absorption. Sustaining these margins will depend on input cost control, product mix, and execution efficiency in a competitive, project-driven environment.

3.  Volume-Led Growth Strategy: Revenue has scaled from ₹59.33 Cr (FY23) to ₹155.29 Cr (FY25), indicating strong expansion in operations. The relatively low employee cost base (~6.1% of revenue) suggests scope for operating leverage as volumes increase, provided execution capacity and order inflows remain stable. Growth remains order-driven and linked to industrial and infrastructure demand cycles.

4.  Cash Flow & Execution Focus: Despite reporting PAT of ₹20.24 Cr in FY25, operating cash flow stood at ~₹6.89 Cr, indicating partial cash conversion due to working capital absorption, particularly in receivables. The business model, being project-based and execution-driven, requires continued focus on timely execution, receivable collections, and inventory management to align cash flows more closely with reported profitability.

Promoters
Vivid Electromech Limited is promoted by Mr Sameer Vishvanath Attavar, Mrs Meeta Sameer Attavar, and Mr Hardik Dinesh Shah, who are actively involved in the company’s operations and management. The promoters play a key role in business development, execution oversight, and strategic decision-making, supported by the senior management team. The company has demonstrated strong growth in revenue (₹59.33 Cr to ₹155.29 Cr) and profitability (₹0.06 Cr to ₹20.24 Cr) over FY23–FY25. Post-IPO, the promoters are expected to retain majority control, ensuring continuity in business operations and strategic direction.

Promoter Holding 

Working Capital Intensity

Vivid Electromech exhibits high working capital intensity as indicated by the company’s FY25 inventory levels at ₹18.95 Cr and trade receivables at ₹60.55 Cr, while revenue for the period was at ₹155.29 Cr. The company’s cash conversion cycle for FY25 stands at 5 days, indicating a significant reduction from negative operating cash flow in FY23 and FY24. This shows that while Vivid Electromech continues to benefit from supplier credit to offset part of the working capital requirements, the company now utilises slightly higher levels of capital to support operations. The company’s receivable days remain at 102 days, indicating that a significant portion of capital continues to be locked in as Vivid Electromech’s operating cash flow continues to lag behind accounting profits.

Asset-Heavy and Capital Absorbing Model

Vivid Electromech, unlike most asset-light peers, maintains a moderate fixed assets base at ₹23.08 Cr in FY25. The company also maintains Capital Work in Progress at ₹0.52 Cr as at 30-Sep-25. This indicates that Vivid Electromech continues to invest in manufacturing assets. However, unlike most peers, the major capital absorbers for Vivid Electromech are working capital requirements, in the form of trade receivables at ₹60.55 Cr and inventory at ₹18.95 Cr. This shows that while an asset-intensive model may exist in theory for Vivid Electromech, the actual capital absorbers are working capital requirements. The H1FY26 increase in long-term borrowings to ₹9.68 Cr (from ₹0.23 Cr) as at the end of FY25 also indicates that incremental capacity additions are now funded through higher levels of debt

Balance Sheet & Leverage Profile

As of FY25, the company’s net worth stood at ₹41.79 Cr, while total borrowings aggregated to ₹4.23 Cr (including short-term borrowings of ₹4.01 Cr and long-term borrowings of ₹0.23 Cr). The resulting debt/equity ratio stood at approximately 0.10x, indicating a relatively conservative leverage position at FY25. However, the picture changes on a trailing basis. As on 30-Sep-25, total borrowings aggregated to ₹14.17 Cr (including short-term borrowings of ₹4.49 Cr and long-term borrowings of ₹9.68 Cr). The resulting debt/equity ratio increases to approximately 0.28x on a net worth of approximately ₹51.24 Cr (H1FY26). The leverage trajectory is upward, although IPO proceeds are expected to provide balance sheet support and moderate debt levels going forward.

Cash Flow Sensitivities

As on FY25, the company’s PAT stood at ₹20.24 Cr, while net operating cash flow stood at ₹6.89 Cr, translating to a cash conversion ratio of ~34%. This gap is primarily driven by a ₹34.37 Cr increase in trade receivables during FY25. As a result, despite strong reported profitability, cash flow generation remains sensitive to receivables cycles, and operating cash flow should be evaluated alongside PAT when assessing earnings quality.

Profitability Matrix

Revenue has increased from ₹59.33 Cr in FY23 to ₹155.29 Cr in FY25, indicating a 2.6x growth over two years, driven by expansion in both manufacturing and traded goods. EBITDA for FY25 was ₹28.39 Cr, implying an EBITDA margin of ~18.28%, a sharp improvement from 2.96% in FY23. PAT of ₹20.24 Cr translates to a net margin of ~13.0%. The company’s profitability is strong relative to SME manufacturing benchmarks, supported by operating leverage, input cost efficiencies, and a lean overhead structure. However, margin sustainability will depend on continued execution discipline and effective management of receivables and input costs as the business scales.

The Opportunity and The Risks- What’s working & What’s not

Investment Thesis

Revenue has scaled aggressively from ₹59.33 Cr (FY23) to ₹155.29 Cr (FY25), driven by strong execution and a strategic pivot into data centre system integration. EBITDA margin at 18.28% and ROE at ~117.61% materially outperform mainboard industry benchmarks (11–15%), but this outperformance requires rigorous scrutiny. The explosive growth is accompanied by a severe working-capital drain, with trade receivables ballooning from ₹18.06 Cr to ₹60.55 Cr over the same period, and total borrowings tripling to ₹14.17 Cr by H1 FY26. Cash flow conversion remains critically weak (CFO ₹6.89 Cr vs PAT ₹20.24 Cr). Crucially, the IPO proceeds are strictly mapped to relieve this balance sheet friction: ₹43.84 Cr for capex, ₹36.00 Cr for working capital, and ₹9.30 Cr for debt repayment. Sustained performance will depend entirely on tightening working capital control and normalising cash flows.

LMVT Framework

The promoter group (Sameer and Meeta Attavar) has driven rapid commercial scale-up over the last three years, successfully compounding net worth entirely from internal accruals before FY25. However, the enterprise now requires rigorous institutional financial discipline. With Debt/Equity climbing to 0.28x pre-IPO and a cash conversion cycle artificially supported by stretching payable days to 127 days, the company must focus on receivable collection and inventory control. Additionally, historical corporate governance deficits—specifically, statutory auditor flags for Section 185/186 violations over five consecutive years and non-traceable corporate records before 2006—necessitate a steep governance discount. As a newly listed entity, transitioning from aggressive, unorganised expansion to capital-efficient, compliant growth is critical.

Moat

The business operates in a highly fragmented, low-pricing-power electromechanical segment completely devoid of structural, technological or consumer brand moats. Competitive positioning is instead derived from localised execution capability and highly concentrated, triple blue-chip OEM credentials (ABB, L&T, Schneider). While these certifications act as strict entry barriers for hyperscaler tendering, they create an exceptionally fragile, single-point failure vector. A severe 84.50% of FY25 LV panel revenue was derived solely from ABB ArTu K licence panels. Furthermore, operational infrastructure suffers from acute geographic concentration, with 88.62% of H1 FY26 revenue generated in Maharashtra and all critical manufacturing and testing siloed in the Navi Mumbai facility.

Valuation

At the upper issue price band of ₹528-555, the company commands an implied market capitalisation of ~₹493.30 Cr. The pricing dictates aggressive valuation multiples:

• P/E: 24.37x

• EV/EBITDA: 17.07x

• ROCE: ~87.34%

• Debt/Equity: 0.28x (H1 FY26)

While optically justifiable by hyper-growth metrics, Vivid is priced at a steep premium compared to established mainboard peers like HPL Electric (EV/EBITDA 8.63x). The IPO is primarily a balance sheet rescue operation, allocating ₹36.00 Cr to working capital and ₹9.30 Cr to debt reduction, rather than pure offensive growth capital. For current valuations to hold, the company must flawlessly execute its ₹43.84 Cr capacity expansion while structurally bridging the gap between its robust accounting accruals and weak free cash flows.

Tailwinds

• Data Centre Supercycle: National capacity is projected to nearly triple to 2,500 MW by 2027. Vivid’s data centre revenue has surged proportionally to ₹41.73 Cr (59.17% of total revenue) in H1 FY26.

• Geographic Convergence: Mumbai is the epicentre of hyperscaler capex, perfectly aligning with Vivid’s localised manufacturing base.

• Visibility: A confirmed, unexecuted order book of ₹200.19 Cr provides ~1.3x trailing revenue coverage and strong short-term execution visibility.

Conclusion

Vivid Electromech is a high-growth, hyper-leveraged proxy for India’s digital infrastructure boom. While reported profitability and return ratios are elite, the underlying financial structure is severely capital-intensive, vendor-financed, and completely execution-dependent. Growth has been achieved through dangerous working capital deployment and pre-IPO debt accumulation, with cash generation trailing far behind reported earnings. At 24.37x P/E, the valuation leaves zero margin of safety for execution missteps, OEM disputes, or continued receivable delays.