Parth Electricals & Engineering Ltd IPO

Our commercial success is largely dependent upon our ability to develop and design innovative products suitable for the requirements of our customers. Our inability to effectively utilize and manage our ability to develop and design innovative products would impact our business, revenue and profitability.

Our Company is reliant on the demand from the electrical industry for a significant portion of our revenue. Any downturn in the power generation and distribution industry or an inability to increase or effectively manage our sales or increasing competition could have an adverse impact on our Company's business and results of operations.

The commercial success of our products depends to a large extent on the success of the expansion and consumption of electricity in the territories that we operate in.

We depend on a few customers of our products and services, for a significant portion of our revenue, and any decrease in revenues or sales from any one of our key customers may adversely affect our business and results of operations.

We generate our major portion of sales from our operations in certain geographical regions. Any adverse developments affecting our operations in these regions could have an adverse impact on our revenue and results of operations.

Our major sales revenue is coming from single product, i.e. Ring Main Unit (RMU), which is more that 50% of our total sales. The management is making consistent efforts in producing and selling other products like PSS, MV Panels, Metering Panels, CRP and Earthlink Box etc.

Our Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.

We highly depend on our key raw material and a few key suppliers who help us procure the same. Our Company has not entered into long-term agreements with its suppliers for supply of raw materials. In the event we are unable to procure adequate amounts of raw materials, at competitive prices our business, results of operations and financial condition may be adversely affected.

We also provide our products and our services to various public sector units and undertakings which exposes us to risks inherent in doing business with them and may adversely affect our business, results of operations and financial condition.

Our failure to perform in accordance with the standards prescribed in work order of our client could result in loss of business or payment of liquidated damages and any delay in the schedule of our under-construction projects may be subject to cost overruns and can impact our reputation and future projects.