Financial Performance Highlights

  • Total income increased by nearly 310% YoY to ₹1,680 lakhs (₹16.80 crores) in Q1 FY27
  • EBITDA grew approximately four times YoY to ₹1,087 lakhs (₹10.87 crores)
  • EBITDA margin maintained at approximately 65%
  • Profit before tax increased to ₹538 lakhs (₹5.38 crores)
  • Profit after tax rose to ₹430 lakhs (₹4.30 crores)
  • This represents the strongest quarterly financial performance in company's history

Operational Metrics

  • Maintained 100% fleet utilization during the quarter
  • Current fleet size: 155-158 machines with additional machines in production
  • Serving marquee customers across renewable energy, infrastructure, railways, steel, oil and gas, and industrial projects

Strategic Initiatives Announced

Wind Energy Equipment Rental Segment

  • Strategic entry into wind energy equipment rental segment
  • Focus on 900-ton machines required for 5-megawatt wind turbines (industry shift from 3.3 MW)
  • Machines have lead time of 4 months, with first units expected in October 2026
  • In talks with largest wind energy EPC companies in India
  • Expected contribution from Q3 and Q4 FY27
  • Margins expected to be similar to current fleet (slightly higher)

International Expansion

  • Plans to expand operations into United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA)
  • Expansion subject to necessary approvals and execution milestones
  • Motivation: Clients (L&T, Afcon, KEC) expanding EPC work to these regions
  • Expected rental yields: ~4% monthly (compared to ~2.5% in India)
  • Expected EBITDA margins: 50-52% in Middle East markets
  • Target start: Within FY27 (current financial year)
  • Initial focus: Renewable energy projects

Capital Expenditure Update

  • Original capex plan: ₹400 crores
  • Completed capex: ₹270 crores (including GST)
  • Net block (excluding GST): ₹235-240 crores
  • Remaining capex: ₹130-140 crores to be deployed in FY27
  • 70% of remaining capex already placed in orders
  • Additional expansion into tower cranes for data center projects (80-ton capacity)

Debt and Financing

  • Current borrowings: ₹80-85 crores
  • Loan-to-value (LTV) ratio: ~60%
  • Average interest rate: 8.5-8.75%
  • Previous borrowing cost: 9.75% (being replaced with cheaper funding)
  • Financing structure: Typically 100% machine funding available from banks (HDFC, Axis, ICICI) with company covering transportation and insurance

Order Book and Guidance

  • Executable order book for FY27: ₹70-72 crores
  • Expected EBITDA margin: ~60% on order book
  • Expected PAT margin: 25-30%
  • Current lead time for new machines: 1.5 months to revenue generation
  • Signed contracts maintain 100% utilization through financial year

Receivables Management

  • Current debtor days: ~200 days
  • Core business payments received under 60-90 days
  • Expectation to streamline to under 60-70 days in current financial year

Additional Business Updates

  • EV machinery entry planned for Q2 FY27
  • EV machines cost approximately 5% more than diesel machines but offer higher margins due to lower operating expenses
  • Clients bear diesel costs; company bears operator, helper, and labor fooding costs
  • Hiring experienced professionals (20-25 years) for wind energy segment

Management Commentary

  • India's infrastructure investment cycle gaining momentum with record government capital expenditure
  • Structural tailwinds supporting long-term demand for specialized heavy equipment rental services
  • Focus on disciplined capital allocation, fleet productivity, and operational efficiencies
  • Geographic diversification expected to stabilize fleet utilization in 90% range

Q&A Session Highlights

  • Wind energy market expected to grow 5-7x by 2030 due to India's renewable energy needs
  • UAE/KSA expansion driven by client demand and higher yields, not domestic competition
  • Middle East expansion to be company-owned without local partnerships or JVs
  • Maintenance costs expected to increase to 4-5% of revenue after first 3 years of machine life
  • Current machines are 2024-2026 make with OEM maintenance coverage for first 3 years