Modest Return On EquityROE below double digits signals that capital intensity or pricing/asset utilization may limit shareholder returns. In a capital goods business, persistent mid-single-digit ROE can constrain long-term return expectations unless asset turnover or margins sustainably improve.
Margin Sustainability RiskWhile margins improved sharply, equipment and EPC margins are exposed to commodity input costs, competitive bidding and project mix. Maintaining elevated gross and net margins across multiple project cycles is uncertain and may compress profitability if execution or pricing weakens.
Project Execution And Working-capital ExposureHeavy reliance on turnkey projects means multi-stage contracts, milestone-dependent cash flows and execution complexity. Even with low leverage, project delays, disputed claims or concentrated orders can strain working capital and cause durable margin volatility over the medium term.