RIR Power Electr

RIR Power Electronics Limited reported robust financial results for Q4 and full year FY25. For the full year, revenue grew by 29.13% to INR 86.21 crores from INR 66.76 crores in FY24. EBITDA increased by 14.36% to INR 11.39 crores, and PAT rose by 4.02% to INR 8.28 crores. The company's EPS for FY25 stood at INR 11.48 per share, remaining largely consistent with the previous year.

The company is embarking on a significant expansion with India's first silicon carbide fabrication plant in Odisha, entailing a total capex of INR 618 crores over the next 2 to 2.5 years. Approximately 10% of this capex has already been incurred, with the initial phase requiring an investment of INR 100 crores. This project is central to the company's strategy to focus on silicon carbide components and develop a complete ecosystem.

The Odisha plant is planned for phased operations, with the first phase expected to commence in Q4 FY26, projected to contribute INR 10-12 crores in revenue for that quarter. The full facility is anticipated to be functional within 2 to 2.5 years from May 2027. At full capacity, the plant is targeted to generate INR 1,200 crores in revenue by FY30, operating at 90% capacity utilization with an asset turnover ratio of 2.

Management anticipates strong profitability from the silicon carbide venture, guiding for EBITDA margins in the range of 25% to 28%. The company differentiates itself by focusing on premium, high-reliability, medium and high-power products, leveraging its vertical integration and historical expertise from GE and Harris Corporation. This strategy aims to mitigate competition from Chinese manufacturers who primarily focus on lower-power segments.

The INR 618 crore Odisha capex is planned to be funded through a mix of government subsidies, equity, and debt. The government policy provides for 50% central and 25% state subsidy, with Odisha having committed 50% due to special incentives. The company plans to raise approximately INR 120-125 crores through equity and INR 125 crores through debt for its remaining share of the funding, and expects to receive the government subsidy before the end of June 2025.

RIR Power Electronics is actively strengthening its leadership, with Dr. Harshad Mehta currently overseeing the project while the company is in the process of shortlisting a new CEO. A Chief Marketing Officer, Perry Schugart, has been appointed to enhance market reach in key sectors such as energy, railways, aerospace, and defense. This aligns with the company's goal to develop Indian markets for global applications and leverage its vertical integration for leadership in application development.

The company recently executed a bonus issue and share split, which management clarified as non-cash events. The primary objectives were to reward long-term shareholders and improve the liquidity of the stock, particularly in response to requests from institutional investors regarding illiquidity issues in trading volumes.