Financial Performance Highlights

Revenue: Q1 FY27 revenue stood at INR18.4 billion versus INR13.3 billion in Q1 FY26, representing 38% year-on-year growth.

Order Intake: Order book for Q1 FY27 was INR11.4 billion, down 30% year-on-year compared to INR16.2 billion in Q1 FY26. The primary reason for lower order intake was due to lower realization of TBCB (Tariff Based Competitive Bidding) in market in Q4 FY26.

Order Backlog: Order backlog moderated to INR209.3 billion as of June 2026 versus INR214.6 billion as of March 2026, down by 2.5% quarter-on-quarter. The order backlog represents more than 3 years of FY26 revenue.

Profitability: Profit before tax and exceptional items for Q1 FY27 was INR4.9 billion compared to approximately INR3.9 billion in Q1 FY26, growing by more than 1.25x.

Margins: Gross margins moderated to 41.3% from 48.4% a year ago and 47% in the previous quarter. Compared to full-year FY26 gross margin of 45.3%, the current quarter represents a 4% delta. EBITDA margin for the quarter was 25.1%.

Cash Position: The company generated INR4.3 billion of cash during the quarter, taking total available cash (including funds lent to cash pool) to INR29.3 billion. The company maintains zero debt position with negligible finance costs.

Margin Analysis Breakdown

The 4% gross margin reduction compared to FY26 is attributed to three factors:

  • 1-1.5% reduction due to lower export revenue share (30% in Q1 vs 33% in FY26) and execution of very high profitable export orders in previous financial year
  • Impact from elevated commodity prices resulting in lower execution savings than anticipated
  • 2-2.5% reduction due to ramping up of HV business revenues which have lower gross margins but better operating leverage at EBITDA level

Approximately 50% of the gross margin impact is mitigated at the EBITDA level.

Operational Highlights

Project Commissioning:

  • Commissioned first 400 kV substation in Nepal for NEA Khimti site
  • Partnered with Adani for building substations for renewable power evacuation from Khavda solar park
  • Augmented power transformation capacity for PGCIL, Resonia, NLP
  • Commissioned new bays for customers including Renew, Tata Projects, Adani, DVC

Order Quality and Diversification:

  • Export diversification now stands at 46% of Q1 orders
  • Secured CTs and CVTs from GE Vernova entity in North America
  • Secured 400 kV GIS order from GE Vernova entities in Spain and Morocco
  • Won 155 MVA 245 kV transformers for a semiconductor customer
  • Multiple orders for grid automation packages from state utilities, EPCs and data centers
  • Private customers account for 77% of backlog, central utilities and PSUs contribute 21%, state utilities exposure at 2%

Capital Allocation Plan

The company has announced utilization plan of approximately INR13 billion from available cash:

  • INR10 billion for capacity expansion program announced in previous financial year
  • Approximately INR2.5 billion dividend in Q2 FY27, subject to shareholder approval

Management continues to evaluate options for utilization of remaining INR16.3 billion balance cash to optimize shareholder returns.

Related Party Transaction (RPT) Updates

INR1,300 crore RPT Approval: For US data center order - group entities still under discussion and negotiation with end customer. Expected finalization in next 3-6 months. No part booked in current quarter.

INR3,000 crore RPT Approval: Project put on hold by customer. Will require revalidation from shareholders when opportunity becomes live again. No possibility of order closure by September AGM.

Market Outlook and Guidance

Domestic Ordering: TBCB pipeline was soft January-March 2026 but improved June-July 2026. Management expects market to remain at same level or show 6-7% growth in overall market.

HVDC Pipeline: Pipeline remains strong though pace slightly delayed. South Kalamb project bidding underway with developer decision expected August-September 2026. Expect 1-2 more projects in upcoming NCT. HVDC backlog has back-ended execution with meaningful growth expected from FY29 onward.

Margin Guidance: Maintains full-year EBITDA margin guidance of mid-20s. No deviation from guidance despite Q1 margin pressures.

Capacity Utilization: Consistent with previous calls - some factories well loaded, others have growth opportunity. Capacity expansion largely within existing plants using surplus land at lower historical cost.

Competitive Landscape

Chinese suppliers recently approved for participation but with 60-70% local content requirements. Impact on pricing and delivery capabilities yet to be determined as negotiations with private TBCB winners haven't started. Competition from Tier 2 suppliers exists but varies by product domain.

Commodity Price Impact

Commodity prices elevated and volatile due to geopolitical challenges. Transformer business has price escalation clauses embedded in contracts. Other businesses build estimated commodity costs based on past trends and future expectations. Lag between new pricing and execution means current cost increases will be compensated in future periods.

Data Center Business

Current order intake has insignificant data center portion. Pipeline shows larger data center capacities planned at higher voltages. Working with customers on opportunities but timing of materialization uncertain (next 2-3 quarters).

Future Growth Outlook

Backlog of INR209 billion provides multi-year visibility. Growth not linear - FY27 and FY28 expected to see healthy growth in core portfolio. HVDC projects to drive meaningful growth from FY29 onward. Export market expected to absorb additional capacity alongside domestic demand growth.