Sugs Lloyd Makes Modest Debut with 2.3% Gain, Meeting Cautious Market Expectations

Sugs Lloyd Limited, the technology-driven engineering and construction company specializing in renewable energy, made a modest debut on BSE SME on September 5, 2025. After closing its IPO bidding between August 29 - September 2, 2025, the company commenced trading at ₹119.90, declining to ₹125.85 later representing a 2.32% gain over the issue price of ₹123, reflecting cautious investor sentiment towards the renewable energy EPC sector.

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Sugs Lloyd Listing Details

Sugs Lloyd IPO launched at ₹123 per share with a minimum investment of 2,000 shares costing ₹2,46,000. The IPO received a moderate response with a subscription of 3.23 times - NII leading at 5.30 times, individual investors at 2.12 times, and QIB at 2.03 times, indicating mixed investor interest with limited institutional confidence in the renewable energy EPC business.

First-Day Trading Performance Outlook

Listing Price: The Sugs Lloyd share price opened at ₹119.90 on BSE SME, initially declining 2.52% before recovering to ₹125.85, representing a modest 2.32% gain from the issue price of ₹123, delivering minimal returns for investors.

Growth Drivers and Challenges

Growth Drivers:

• Explosive Revenue Growth: Revenue surged by 159% to ₹177.87 crore in FY25 from ₹68.75 crore in FY24, reflecting robust demand for renewable energy infrastructure and successful project execution capabilities.
• Outstanding Profitability Metrics: Exceptional ROE of 55.47%, solid ROCE of 21.58%, healthy PAT margin of 9.52%, and reasonable EBITDA margin of 14.66% indicating strong operational efficiency.
• Diversified Service Portfolio: Comprehensive EPC services across solar energy, electrical transmission and distribution, civil construction, and manpower staffing providing multiple revenue streams.
• Growing Renewable Energy Focus: Strategic positioning in the expanding solar energy sector with ground mount and rooftop solar solutions aligned with government renewable energy initiatives.

Challenges:

• Profit Sustainability Concerns: Quantum jump in profits from FY24 onwards raises questions about consistency and sustainability of such exceptional growth in the competitive EPC market.
• High Debt Burden: Debt-to-equity ratio of 1.94 with total borrowings of ₹74.83 crore creating significant financial leverage concerns affecting cash flow management and expansion capabilities.
• High Valuation Metrics: Price to Book Value of 9.14 and post-IPO P/E ratio of 17.02 indicating aggressive pricing that requires sustained exceptional performance to justify.
• Working Capital Intensive: EPC projects require substantial working capital and involve execution risks, regulatory challenges, and project completion dependencies.

Utilisation of IPO Proceeds

• Working Capital Requirements: ₹64 crore for meeting working capital needs supporting large-scale EPC project execution and business operations in renewable energy sector.
• General Corporate Purposes: ₹9.92 crore for general corporate purposes supporting business expansion and strategic initiatives in engineering and construction.

Financial Performance of Sugs Lloyd

Revenue: ₹177.87 crore for FY25, showing exceptional growth of 159% from ₹68.75 crore in FY24, reflecting explosive demand for renewable energy infrastructure projects. Net Profit: ₹16.78 crore in FY25, representing growth of 60% from ₹10.48 crore in FY24, indicating strong operational improvements though raising sustainability questions. Financial Metrics: Outstanding ROE of 55.47%, solid ROCE of 21.58%, high debt-to-equity ratio of 1.94, strong RoNW of 43.42%, healthy PAT margin of 9.52%, reasonable EBITDA margin of 14.66%, very high Price to Book Value of 9.14, and market capitalisation of ₹285.53 crore.