Weak Operating Cash ConversionEarnings are not converting to cash, signaling working-capital pressures or delayed receipts from public clients. Persistent negative FCF growth and poor OCF conversion can constrain capex, bond/bid capacity, and force reliance on financing, raising execution and liquidity risk over the medium term.
Rising Liabilities And Falling Equity RatioA declining equity ratio driven by rising liabilities reduces balance-sheet headroom. For an EPC firm this limits buffer for mobilisation, guarantees and working-capital spikes, increasing dependency on external funding and elevating counterparty and funding risks through the project lifecycle.
Net Margin CompressionA narrowing net margin suggests rising costs or weaker contract pricing, which erodes the cushion for project overruns and reduces retained earnings for reinvestment. Continued margin pressure would impair cash generation and long-term returns despite healthy gross margins.