Key Financial Figures (Consolidated, Q2 FY27)

  • Revenue from Operations: INR 285.45 Crore
  • Profit After Tax (PAT): INR 63.33 Crore
  • Year-on-Year PAT Growth: 80.10%
  • Consolidated Order Book: Crossed INR 2,000 Crore (excluding Winwin Specialty Insulators)

Operational and Strategic Updates

Manufacturing Expansions:

  • Sangli Global Coil Factory: Commenced manufacturing operations on October 20, 2026. Three winding machines are operational. The first round of ISO audit is complete. Final customer audits are scheduled to start from the end of November 2026. This facility expands manufacturing infrastructure for high-voltage reactors up to 1,050 kV.
  • Turkey BESS PCS Factory (Nigde): Commenced full manufacturing operations and is aligned to customer projects. Billing may commence in Q3 FY27, subject to completion of contractual milestones and customer acceptance.

Winwin Specialty Insulators (WSI) Acquisition & Performance:

  • The acquisition process is underway, and integration of teams has begun.
  • WSI successfully completed type tests for porcelain insulators up to 400 kV per American and European standards in the last two months.
  • Secured new orders for 800 kV HVDC and 765 kV AC porcelain insulators from large Indian utilities and equipment manufacturers, including Power Grid.
  • Order intake is averaging INR 35 Crore per month, with a negotiation pipeline of approximately INR 1,000 Crore.
  • A new PNG pipeline from GAIL is expected to be operational, enabling full production.
  • FY28 revenue guidance for WSI is approximately INR 200 Crore.

Proposed QIP and Capital Allocation:

  • The company is progressing with preparations for a proposed Qualified Institutions Placement (QIP) of INR 700 Crore, targeting November 2026 subject to regulatory approvals and market conditions.
  • The proceeds are allocated for:
  • INR 175 Crore: Repaying debt to the promoters of Winwin Specialty Insulators.
  • INR 50-70 Crore: Expanding manufacturing capacity at WSI for porcelain and composite insulators.
  • INR 300 Crore: Strengthening working capital to support the execution of larger customer orders and the reverse integration of HVDC CTC cable manufacturing.
  • Remainder: Funding the setup of a US office and potential Class B manufacturing facility in the US.

Division-wise Order Book and Capacity Outlook

  • Coil Products (Quality Power): Order book of ~INR 600 Crore. Anticipated order intake of INR 200-500 Crore in coming months. New Sangli factory peak revenue potential is north of INR 1,500 Crore.
  • Instrument Transformers (Mehru): Order book of ~INR 600 Crore+. Exploring rented capacity to meet immediate demand; a plan to double capacity with a new factory is under consideration for the next 18 months.
  • Power Electronics / BESS (Endoks): PCS factory has a 4 GW capacity. Current orders are for 1 GW. Peak revenue potential for this division is estimated at INR 1,500-2,000 Crore.
  • Insulators (Winwin): Current capacity supports ~INR 300 Crore revenue. With new capex, this is expected to increase to over INR 500 Crore.

Management Commentary and Guidance

  • Margin Outlook: Management expects group-level margins to be stable around 25%. Divisional breakdown:
  • Quality Power (Coils): >25%
  • Mehru (Instrument Transformers): 22-23%
  • Winwin (Insulators): ~25% (orders booked at 20-25% EBIT)
  • Endoks PCS: 10-12%
  • Growth Guidance: The company has publicly guided for at least 50% growth in FY28.
  • Q3 FY27 Outlook: Management indicated Q3 could be a challenging quarter for Quality Power due to the transition between factories. Endoks is expected to have a strong Q4. A formal guidance revision may be considered after Q3 results.

Market Environment and Strategy

  • Demand remains strong across reactors, instrument transformers, insulators, power conversion equipment, and FACTS, driven by investments in transmission infrastructure, HVDC, renewable integration, and grid stability.
  • The global supply chain for specialized electrical equipment remains constrained due to geopolitical issues, trade conditions, and logistics disruptions.
  • The acquisition of Trench Group by GE Vernova for ~$9 billion was noted as validation of the technology moat and market opportunity. Management believes this could benefit Quality Power by increasing sourcing volumes from competitors like Hitachi and Siemens.
  • The company is focusing on the high-voltage transmission segment (400 kV, 765 kV, HVDC) for insulators, where capacity is limited globally, allowing for premium pricing.

Other Key Details

  • CTC Cable Manufacturing: The reverse integration project for HVDC CTC cables is in the trial phase. Qualification with customers is expected in about 4-5 months, with commercial impact anticipated in Q4 FY27. This is expected to improve margins but will initially elongate the working capital cycle.
  • Hyperinflation Accounting (Turkey): The hyperinflation adjustment resulted in a net credit of INR 4 Crore to the P&L in Q2 (INR 8 Cr debit in Q1, INR 4 Cr credit in Q2).
  • Forex Hedging Policy: In Turkey, all forex exposure is hedged. In India, the company uses plain vanilla options and actively tracks exposure but is not heavily hedged currently.
  • Sukrut JV: Reported ~40% growth in H1 FY27 and is now profitable.