SFC Environmental Technologies Limited IPO

The company's revenues and operations are dependent upon technology. Failures of these technologies, failures to upgrade or innovate these technologies or failures to identify and develop new technologies could have an adverse impact on its results of operations. The company's products may be displaced by newer technology and any inability or failures to adapt to technological developments, the evolving competitive landscape or industry trends could harm the company's business and competitiveness.

The company derives a significant part of its revenue from the company's top 10 customers and the company does not have long term contracts with most of these customers. If one or more of such customers choose not to source their requirements from the company or to terminate the company's long-term contracts, the company's business, results of operations and financial condition may be adversely affected.

The company's business has grown, including its revenue from operations that has grown at a CAGR of 15.91% from Rs.5,194.47 million in Fiscal 2023 to Rs.6,978.58 million in Fiscal 2025, and the company may fails to manage the company's growth effectively.

The Company has experienced an increase in the company's cash conversion cycle and may experience longer cash conversion cycles in the future.

The company has high working capital requirements, and may require additional financing to meet those requirements, which could have a material adverse effect on its results of operations, cash flows and financial condition. The working capital as a percentage of total revenue from operations was 63.51%, 39.94% and 27.77% for Fiscals 2025, 2024 and 2023, respectively.

The company requires substantial capital expenditure / investment and working capital requirements in relation to the company's SWT business operations, and may require additional financing including working capital to meet those requirements, which could have a material adverse effect on its results of operations, cash flows and financial condition.

The company's Subsidiary, SFC Umwelttechnik GmbH has been, and continues to be, involved in material legal proceedings.

Delays in receiving payment of outstanding dues from third parties may affect its financial condition and results of operations. the Company experienced an increase in trade receivable days from 158 days in Fiscal 2023, to 197 days in Fiscal 2024 and to 262 days in Fiscal 2025.

The company depends on a few suppliers for the supply of majority of its raw materials and the company does not have continuing and exclusive supply agreements with all of them. Any interruptions in the supply of raw materials, fluctuations in raw material prices or any failure by its suppliers to make timely delivery of raw materials could adversely affect the company's business, results of operations and financial conditions.

The assets the company operates, and the handling and treatment of waste expose the company to safety, operational and other risks, including the risk of personal injury to its employees or third parties. Failures to limit the company's exposure to such risks may subject the company to significant disruptions in the company's business, legal and regulatory actions, costs, and liabilities and could have an adverse impact on its results of operations.