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    Shilchar Tech.

    531201
    Capital Goods·22 Apr 2025
    Management Summary

    Shilchar Technologies delivered its strongest quarterly and annual performance in Q4 FY25, reaching full capacity utilization ahead of schedule. The company announced a final dividend and a bonus issue, which will also enable its NSE listing. Management is optimistic about FY26, targeting ₹750 crores in sales, and is actively planning further capacity expansion while navigating potential industry-wide competition and geopolitical trade dynamics.

    Highlights

    5

    • Reported highest-ever top line and bottom-line performance for Q4 and FY25.

    • Achieved full capacity utilization in Q4 FY25, well ahead of the original FY26 target.

    • Maintained healthy gross margins, leading to improved EBITDA and net profits.

    • Recommended a final dividend of ₹12.5 per equity share and approved a 1:2 equity bonus issue.

    • Targeting ₹750 crores in sales for FY26, representing 20-25% growth.

    Concerns

    3

    • Potential impact of new US administration's reciprocal tariffs, though management expects minimal impact due to diversification.

    • Risk of oversupply and pricing erosion in the transformer industry due to widespread capacity expansion by peers.

    • High trade receivables, though management clarifies it's LC-backed and earning interest, not a liquidity concern.

    Key financials

    Single quarter

    03 metrics
    1. 01Revenue₹230 Cr
    2. 02EBITDA Margin31%
    3. 03Dividend per Share₹12.5

    Order Book

    high confidence

    Total Value

    ₹ 400 crores

    as of 2025-03-31

    quantified

    Execution

    Company aims for shorter lead times than industry average due to efficiency.

    Composition

    Mix4 geographys
    • Export44.0%
    • Domestic56.0%
    • North America (Export)8.8%
    • Middle East and North Africa (Export)35.2%

    Share of order book by geography · partial disclosure (144.0% of book)

    "Order book is healthy and provides good visibility, with strong demand from both domestic and export markets."

    Source:
    Q&A

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Gross ₹0 crores · Net ₹0 crores · 0.0x EBITDA

    Dividend

    ₹12.5/share (final)

    Liquidity

    Liquidity disclosed

    Company has surplus funds and good cash flow, allowing it to hold LC-backed receivables for interest income.

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Sales
    ₹750 crores
    		High
    Revenue Growth
    Sales Growth
    20-25%
    		High
    Profitability
    EBITDA Margin
    maintain ~31% or improve
    		Medium
    Capacity Utilization
    Capacity Utilization
    full utilization
    		High
    Corporate Action
    NSE Listing
    apply for listing
    		High

    What to watch in Q1 FY26

    4

    NSE Listing Application

    next quarter
    CurrentBonus issue approved, authorized capital to be increased to Rs. 11.44 crores.
    TargetApplication submitted to NSE.

    Why it matters

    Fulfils a long-standing investor request and could improve liquidity and visibility for the stock.

    So, that plan is already, for NSE listing we need to have a minimum Rs. 10 crores of paid up capital, which we will be eligible by giving this bonus share. So, once the bonus shares are issued, our authorized capital will be to Rs. 11.44 crores. And after that, we will be applying to NSE for the listing.

    Risks & concerns

    3
    RiskSeverity

    US Tariffs on Transformers

    New US administration's reciprocal tariffs could impact exports, but management notes North American sales are less than 20% of total revenue and they are diversified. — Analyst downplayed

    medium

    Oversupply and Pricing Erosion due to Industry Capacity Expansion

    Many peers are expanding capacity, potentially leading to oversupply and competitive intensity in 2-3 years, though management is confident in maintaining margins through efficiency. — Analyst acknowledged

    medium

    Delay in Capacity Expansion leading to Loss of Revenue/Orders

    Expansion plans are still being finalized, which could take 12-18 months to go live, but management believes they can market and acquire orders before the plant is ready, preventing revenue loss. — Analyst not addressed

    low

    Q&A highlights

    8

    “So, that plan is already, for NSE listing we need to have a minimum Rs. 10 crores of paid up capital, which we will be eligible by giving this bonus share. So, once the bonus shares are issued, our authorized capital will be to Rs. 11.44 crores. And after that, we will be applying to NSE for the listing.”

    Clarifies the company's plan for NSE listing, linking it to the recently approved bonus issue and increased authorized capital.

    asked by Abhi Jain

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q4 & FY25 Performance with Record Highs

    Shilchar Technologies reported its highest-ever top line and bottom-line performance for Q4 and the full financial year ended March 31, 2025. The company achieved full capacity utilization in Q4, significantly ahead of its original FY26 target. This robust performance was driven by strong revenue growth and healthy gross margins, leading to improved EBITDA and net profits for the period.

    02

    Strategic Capacity Expansion and Future Growth Outlook

    Following the successful commissioning of its latest capacity expansion in August, Shilchar is now operating at full utilization. Management is actively planning a further capacity expansion, considering higher MVA and kV class transformers, with details on cost, land, and specific capacity to be announced once finalized. The company aims for ₹750 crores in sales for FY26, representing a 20-25% growth, and plans to fully utilize its current capacity throughout the year.

    03

    Shareholder Returns and NSE Listing Initiative

    The Board recommended a final dividend of ₹12.5 per equity share for FY25, subject to shareholder approval. Additionally, a 1:2 equity bonus issue was approved, which will increase the authorized capital to ₹11.44 crores. This bonus issue is a prerequisite for applying for listing on the National Stock Exchange (NSE), a long-standing plan for the company.

    04

    Diversified Market Presence Mitigates US Tariff Risks

    Management addressed concerns regarding potential US tariffs on transformer exports, stating that North American sales constitute less than 20% of total revenue, with the majority of exports going to the Middle East and North Africa. The company expressed confidence that any tariffs would not significantly impact its overall business due to its diversified market presence and strong product quality.

    05

    Efficient Working Capital Management and Order Book Strength

    The company's trade receivables increased due to a strategic decision to hold LC-backed payments for 180 days, earning interest on surplus funds rather than encashing them early. This indicates strong liquidity and a debt-free balance sheet. The current order book stands at approximately ₹400 crores, providing good revenue visibility, with management confident in sustained performance.

    06

    Operational Efficiency and Margin Sustainability

    Shilchar Technologies maintains strong EBITDA margins, reaching approximately 31% in Q4 FY25, which management attributes to efficient operations and low overheads. Despite industry-wide capacity expansions by peers and potential pricing pressures, the company is confident in its ability to maintain or even improve these margins through continuous innovation and efficiency.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.