Advanced SysTek Limited IPO

Our business is significantly reliant on certain key customers, particularly large oil and gas PSU companies. We have derived Rs. 2,868.90 million, Rs. 2,390.59 million, and Rs. 1,762.85 million constituting 94.91%, 94.57% and 93.65% of our revenue from operations from our top 10 customers during Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Loss of any of these customers or loss of revenue from sales to any key customers could have a material adverse effect on our business, financial condition, results of operations and cash flows.

A significant proportion of our orders are from government related entities which award the contract through a process of tender. We derived Rs. 2,762.20 million, Rs. 2,183.97 million, and Rs. 1,601.31 million constituting 91.39%, 86.40% and 85.07% of our revenue from operations during the Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively, from customers which are public sector undertakings (PSU Customers). Tenders, typically, require pre-qualification and are awarded to the lower bidder once all other eligibility criteria are met. Our performance could be adversely affected if we are not able to successfully bid for these contracts or required to lower our bid value.

We are significantly reliant on a few suppliers, and we do not enter into long-term contracts or arrangements with our suppliers. Our cost of materials from our top 10 suppliers was Rs. 1,112.22 million, Rs. 884.31 million, and Rs. 582.72 million constituting 57.88%, 54.92% and 50.27% of our total cost of materials in Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Any loss of suppliers will have a material adverse impact on our business and our revenue. Further, if we are unable to procure materials of the required quality and quantity, at competitive prices, our business, results of operations and financial condition may be adversely affected.

Our operations are significantly dependent on the petroleum, oil, gas and petrochemical industry in India and overseas in which we provide our Industrial Automation Solutions (IA Solutions). We have derived Rs. 2,827.57 million, Rs. 2,260.70 million and Rs. 1,679.53 million constituting 93.55%, 89.43%, and 89.23% of our revenue from operations during the Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively, from the petroleum, oil and gas industry. Any downturn in this industry may have an adverse effect on our business, revenue from operations and financial conditions. Further, the ongoing geopolitical tensions in West Asia may also adversely affect our business, results of operations and financial conditions.

Revenue from our Industrial Automation solutions business constitutes a significant majority of our revenue from operations. We derived Rs. 2,991.87 million, Rs. 2,519.75 million, and Rs. 1,879.41 million constituting 98.99%, 99.68%, and 99.85% of our revenue from operations during the Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively, from our Industrial Automation business. Failure to maintain and augment our revenue therefrom could have a material adverse effect on our business and financial condition.

Our Company had an order book of Rs. 1,934.79 million, Rs. 1,993.43 million, and Rs. 1,374.11 million, as on March 31, 2026, March 31, 2025, and March 31, 2024, was, respectively. The orders received by our Company in the past and our order book, may not be representative of our future results and our actual income may be significantly less than the estimates, which could adversely affect our results of operations.

Agreements with our PSU Customers allows them to retain certain amounts i.e. retention money, which are due to our Company for a specified period. During Fiscal 2026, Fiscal 2025, and Fiscal 2024, the retention money held back by our PSU Customers was Rs. 1,026.37 million, Rs. 697.30 million, and Rs. 593.13 million, respectively. Any delay or defects in the completion of projects of our PSU Customers may lead to non-release of such retention money which may have an adverse impact on our results of operation.

Contracts with our customers typically carry risks such as invocation of performance bank guarantees and levy of liquidated damages. As on March 31, 2026, March 31, 2025, and March 31, 2024, the outstanding performance bank guarantees of our Company was Rs. 987.05 million, Rs. 878.22 million, and Rs. 601.84 million, respectively. Failure to execute our projects in accordance with the terms of our contracts exposes us to these risks, which have an adverse effect on our business, result of operations and financial condition.

Failure to meet the quality standards required by our customers may lead to cancellation of existing and future orders and expose us inter alia to warranty claims, including monetary liability.

Our Company has a high working capital requirement. Our net working capital requirement constituted Rs. 1,989.77 million, Rs. 1,449.02 million and Rs. 947.49 million, for Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. If our Company is unable to raise sufficient working capital, the operations of our Company will be adversely affected.