ASM Technologies — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

ASM Technologies reported strong financial performance for Q2 and H1 FY26, driven by significant growth in both its Hi-Tech and Engineering segments, particularly in Design-Led Manufacturing (DLM). The company is making substantial strategic investments in capacity expansion through MoUs totaling ₹760 crores and expects to maintain its growth momentum, supported by a healthy order visibility and increasing utilization of existing facilities.

Highlights

  • Q2 FY26 revenue grew by 171% year-over-year.

  • Q2 FY26 EBITDA stood at ₹31 crores with a margin of 19.7%.

  • Q2 FY26 PAT was ₹19 crores, growing from ₹2 crores year-on-year.

  • H1 FY26 revenue reached ₹277 crores, a 153% YoY growth.

  • H1 FY26 EBITDA was ₹56 crores with a margin of 20.3%.

  • H1 FY26 PAT was ₹35 crores, up from ₹5 crores in H1 FY25.

  • Design-Led Manufacturing (DLM) contributed 63% of total revenues in H1 FY26.

  • Net cash position was ₹77 crores as of September 2025.

Key financials

2 periods

Q2 FY26

  • Revenue Growth
    171%
    YoY +171%
  • EBITDA
    ₹31 Cr
  • EBITDA Margin
    19.7%
  • PAT
    ₹19 Cr

H1

  • FY26 Revenue
    ₹277 Cr
    YoY +153%
  • FY26 EBITDA
    ₹56 Cr
  • FY26 EBITDA Margin
    20.3%
  • FY26 PAT
    ₹35 Cr

What they filed

Q1 FY27: revenue up 61.8%, net profit up 68.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue57 65 115 123 154 +170%116 +78%135 +17%199 +62%
EBITDA6 12 25 26 30 +400%19 +58%25 +0%46 +77%
Net profit2 5 15 16 19 +850%9 +80%17 +13%27 +69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Design-Led Manufacturing (DLM)
    63% Share of H1 FY26 Revenue
  • Engineering R&D (ER&D)
    37% Share of H1 FY26 Revenue

Order book

medium confidence

Execution

executable over next 18-24 months

Composition

  • Top 10 Customers (client type) 60%
Management stated they have visibility of at least 18-24 months for their projects and that 60% of their overall business comes from their top 10 customers.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹760 Cr Combination of accrual, debt, equity, and government incentives (25% central, 25% state)
    • Expand ER&D-focused DLM and precision engineering capabilities (Karnataka MoU) ₹510 Cr
    • Enhance DLM capacity (Tamil Nadu MoU) ₹250 Cr
    • Additional CAPEX for FY26 ₹30 Cr
    We have recently signed a MoU with the Government of Karnataka to invest Rs. 510 crores to expand our ER&D-focused DLM and precision engineering capabilities. We have also signed a MoU with the Government of Tamil Nadu to invest Rs. 250 crores to further enhance our DLM capacity. ... Funding will be a combination of accrual, combination of some debt and if needed some additional equity. And we also have some potential incentives both from the central government and different state governments. ... Yes, during the 25-26, CAPEX addition will be another Rs. 30-Rs. 35 crores, the minimum what we are expecting.
  • Liquidity Cash ₹77 Cr Net cash position as of September 2025.
    and the net cash position was Rs. 77 crores as of September 2025.

Guidance & targets

Growth

  • Growth Momentum Growth · H2 FY26 · Medium confidence Continue growth momentum
    We believe that we can continue this growth momentum in the second half of the year.

    — Rabindra Srikantan

Capex

  • Additional CAPEX Capex · FY26 · High confidence ₹30-35 crores
    Yes, during the 25-26, CAPEX addition will be another Rs. 30-Rs. 35 crores, the minimum what we are expecting.

    — Rajesh

Capacity Utilization

  • Capacity Utilization Capacity Utilization · Coming quarters · Medium confidence Similar growth (from 80-85%)
    Yes, the capacity utilization is currently about 80%-85%. So, similar growth we are expecting in the coming quarters as well.

    — Rajesh

ER&D

  • ER&D Momentum ER&D · Q3-Q4 · Medium confidence Some momentum
    So, you will see in the Q3-Q4, there will be some momentum on the ER&D side as well.

    — Rabindra Srikantan

Solar JV

  • Delivery Commencement Solar JV · Later this year or early next year · Medium confidence Start doing some amount of delivery
    we expect to start doing some amount of delivery later this year. In the transportation sector or engineering sector, we again work both on the ER&D and the DLM.

    — Rabindra Srikantan

What to watch in Q3 FY26

New Karnataka Plant Commissioning

next couple of months (end of December or early January)
Current Being added
Target Operational

Why it matters

Will significantly enhance Design-Led Manufacturing (DLM) capacity and drive future growth.

We are adding one more facility in the next few months in Karnataka, which will be very similar to the one we already have. We should have that up and ready in the next couple of months to add to our capacity.

Risks & concerns

  • Competition from GCCs

    medium

    Multinational companies setting up R&D centers in India could increase competition, but ASM emphasizes its DLM pivot supported by ER&D.

    Analyst acknowledged

  • Government Approval for Large CAPEX

    medium

    The large CAPEX plans from MoUs are contingent on land acquisition and government approvals, which are currently in process.

    Analyst acknowledged

  • Lumpiness in Services Revenue

    medium

    Services revenue has shown some lumpiness due to fixed-bid projects requiring acceptance, but management expects momentum in Q3-Q4.

    Analyst acknowledged

  • Lack of Granular Data Disclosure

    medium

    Investors expressed concern over the lack of detailed segmentation (e.g., Hi-Tech vs. Engineering revenue) and overall data disclosure, which management committed to improving.

    Analyst acknowledged

Q&A highlights

2 direct, 3 evasive
Competition from GCCs (Global Capability Centers) Partial
Got it. We understand. GCCs are growing in a big way. For us, ER&D, we have two things. One is we have ER&D as a business. Also, our ER&D supports our DLM. So, what you would have seen over the years, we are pivoting very rapidly into DLM and for that, the ER&D is a very key part of the DLM initiative. So, that is kind of where we are heading.

Addresses a key sector trend of multinational companies setting up R&D centers in India and ASM's strategic positioning relative to it.

Asked by Nilesh Jain

DLM Mix Shift and Margin Profile Evasive
Range also, we will not be able to share. But let us say that the last 3 quarters, the last few quarters, are quite representative. So, you will have to use that as a reference. Because just for everybody's benefit, this is something, some of you have met us in earlier calls and all that.

Highlights a key strategic shift towards Manufacturing (DLM) and investor concern about its impact on profitability, with management declining to provide specific margin guidance.

Asked by Meet

MoU Funding and Government Incentives Direct
So, broadly, we are still working out the incentives which are available. But as we know, there is about 25% which is publicly announced by the central government. And at the state government level, there is an additional 25%. So, this is definitely for CAPEX. ... And we should know that maybe in the next month or so on how much would be incentives and how much would be our contribution.

Provides details on the financing strategy for significant future capital expenditure and the expected timeline for clarity on government incentives.

Asked by Raj Sharad Agrawal

DLM Scope and Value Chain Coverage Evasive
Sure. We will not be able to quantify the number of machinery, but I can tell you what kind of machines they are. Across our sectors, whether it is industrial, consumer, solar or in semiconductor, we do a lot of automation-related work which includes vision, which includes robotics, which includes laser and a lot of testing. These are all the different areas we cover across in the Hi-Tech.

Analyst attempted to gauge the depth of ASM's market penetration in DLM, but management could not quantify due to confidentiality, providing only qualitative scope.

Asked by Ayush Agarwal

Customer Concentration Partial
So, broadly, 60% is from 10 customers. That is what we can share. Individually, number 1 or number 3 or the top 3 will be difficult. So, 60% would be from top 10 customers.

Customer concentration is a key risk factor for IT services companies, and management provided a high-level figure but avoided more granular details.

Asked by Tej

Semiconductor Equipment Manufacturing in India Direct
As of now, is there any semiconductor equipment Manufacturing happening in India? Equipment Manufacturing, I am asking? ... No. ... So, that will come in you are saying, correct? ... Yes.

Clarifies the current state of semiconductor equipment manufacturing in India and management's view on its future emergence, implying ASM's potential role.

Asked by Ajinkya Jadhav

Service Revenue Growth and Data Disclosure Partial
Got it. So, feedback taken on the presentation, we will work on that going forward. Now, in terms of the ER&D revenue, some of the projects, some of these are fixed projects, so we will hope to finish them in the early part of Q3. So, some of those revenues will reflect in Q3. ... I think, like I said, segmentation is difficult for us and we are also trying to see what is the best way to communicate this.

Highlights investor demand for more granular data and management's acknowledgment of feedback, along with a timeline for ER&D revenue pick-up.

Asked by Anant Jain

DLM Peak Revenue from Current Facilities Evasive
Yes, the capacity utilization is currently about 80%-85%. So, similar growth we are expecting in the coming quarters as well. ... Again, that is leading to forward guidance. What we are trying to say is we are adding one more capacity, which should be up and ready very soon. Very soon as in maybe end of December or maybe early January.

Analyst attempted to understand immediate capacity constraints and growth potential from existing assets, but management avoided giving a specific peak revenue number, citing it as forward guidance.

Asked by Aman

3 min read 7 chapters

Detailed narrative

Company Overview and Strategic Focus

ASM Technologies, a 30-year-old company, has evolved into a leading end-to-end engineering R&D (ER&D) and Design-Led Manufacturing (DLM) firm. It provides solutions across the entire product life cycle, specializing in custom, complex, high-precision manufacturing. The company operates globally with 4 manufacturing facilities and 6 global development centers, focusing on Hi-Tech (semiconductor, consumer electronics, industrial electronics, solar) and Engineering (transportation, industrial, off-highway vehicles) segments.

Q2 & H1 FY26 Financial Performance

For Q2 FY26, revenue grew by 171% year-over-year, with EBITDA at ₹31 crores (19.7% margin) and PAT at ₹19 crores (up from ₹2 crores YoY). For H1 FY26, revenue was ₹277 crores (up 153% YoY from ₹110 crores in H1 FY25), EBITDA was ₹56 crores (20.3% margin), and PAT was ₹35 crores (up from ₹5 crores in H1 FY25). Design-Led Manufacturing (DLM) contributed 63% of total revenues in H1 FY26, while Engineering R&D (ER&D) accounted for 37%.

Strategic Investments and Capacity Expansion

ASM is investing significantly in infrastructure and capacity. It signed MoUs with the Governments of Karnataka (₹510 crores) and Tamil Nadu (₹250 crores) for a total of ₹760 crores to expand ER&D-focused DLM and precision engineering capabilities. These facilities, once operational, are expected to significantly enhance capacity. The company also plans an additional CAPEX of ₹30-35 crores for FY26, with H1 FY26 CAPEX at ₹11 crores.

DLM and ER&D Growth Momentum

The company is rapidly pivoting towards Design-Led Manufacturing (DLM), which is supported by its ER&D capabilities. Management expects the robust growth momentum in both Hi-Tech and Engineering verticals to continue in the second half of the year and medium term, driven by global supply chain realignment and India's emergence as a preferred design and manufacturing hub. Capacity utilization is currently at 80-85%, with similar growth expected in coming quarters, and ER&D momentum is anticipated in Q3-Q4.

Semiconductor and Solar Business Outlook

ASM is strategically positioned as a critical partner to global OEMs, especially in the semiconductor equipment sector, leveraging its deep engineering expertise. The company has also set up a joint venture, ASM-HHV, to focus on the solar equipment segment, with deliveries expected to commence later this year or early next year. Management noted that India is a significant market for solar and that semiconductor equipment manufacturing is not currently happening in India but is expected to emerge.

Capital Allocation and Funding Strategy

The ₹760 crores CAPEX for the MoU projects will be funded through a combination of accruals, debt, equity, and government incentives (expected to be around 25% from central and 25% from state governments). The company had a net cash position of ₹77 crores as of September 2025. The large CAPEX projects are planned over 18-24 months post land acquisition and will be implemented in three phases, with clarity on incentives expected in about a month.

Customer Concentration and Data Disclosure

Management indicated that 60% of the overall business revenue comes from its top 10 customers. While specific customer names or more granular segmentation (e.g., Hi-Tech vs. Engineering revenue split for Q2) were not provided due to confidentiality and ongoing efforts to improve disclosure, the company acknowledged investor feedback on presentation and committed to working on better ways to communicate data.

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