Concall AI

Shilchar Tech. — Q4 FY26 earnings call

Call held 5 May 2026

Management summary

Shilchar Technologies reported a strong full year FY26 performance with 5% revenue growth and 8% PAT growth, reaching INR652 crores and INR158 crores respectively. However, Q4 FY26 was impacted by external factors including the Middle East crisis deferring INR35-40 crores of shipments and raw material price volatility, leading to margin compression. The company maintains a robust order book of INR452 crores and is on track with its INR120 crore capacity expansion, aiming for INR800-850 crores revenue in FY27.

Highlights

Full year FY26 revenue from operations grew 5% year-on-year to INR652 crores.
EBITDA for FY26 stood at INR190 crores with a healthy margin of 29%.
Profit after tax for FY26 increased 8% year-on-year to INR158 crores, resulting in an EPS of INR138.
The company remains debt-free with cash and cash equivalents of INR246 crores at the end of FY26.
Gavasad expansion (6,500 MVA, total 14,000 MVA) is on track for commissioning in April '27, funded entirely by internal accruals of INR120 crores.
Strong order visibility for FY27 of approximately INR800 crores, with robust inquiries from domestic and export customers.

Concerns

Q4 FY26 revenue from operations came in lower at INR152 crores, with EBITDA margin at 21% and PAT at INR28 crores, impacted by external factors.
Gross margin compression in Q4 due to lower exports (Middle East crisis) and increase in raw material prices, particularly oil prices which doubled.
Approximately INR35-40 crores of shipments to Middle East were deferred from March '26 due to logistics disruptions, impacting Q4 results.
US tariff policy uncertainty in preceding quarters moderated order intake from US customers, though now reduced to 10%.

Key financials

2 periods

Q4 FY26

Revenue from Operations
₹152 Cr
EBITDA Margin
21%
PAT
₹28 Cr

FY26

Revenue from Operations
₹652 Cr
YoY +5%
EBITDA
₹190 Cr
EBITDA Margin
29%
PAT
₹158 Cr
YoY +8%
EPS
₹138

What they filed

Q1 FY27: revenue down 15.1%, net profit down 48.8% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	131	154	232	159	171 +31%	170 +10%	152 −34%	135 −15%
Expenses	90	111	161	106	118	118	120	113
EBITDA	41	43	71	52	54 +32%	52 +21%	32 −55%	22 −58%
Margin	31%	28%	31%	33%	31%	31%	21%	16%
Other income	4	5	5	4	9	6	7	7
Interest	0	0	0	0	0	0	0	0
Depreciation	1	1	1	1	1	1	1	1
Profit before tax	44	47	75	56	62 +41%	57 +21%	37 −51%	28 −50%
Tax rate	25%	26%	26%	25%	25%	26%	24%	26%
Net profit	33	35	55	41	46 +39%	42 +20%	28 −49%	21 −49%
EPS	28.71	30.50	48.56	36.27	40.16	37.01	24.82	18.23

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.

Order book

high confidence

Total value

₹452 Cr

as of 2026-05-05 quantified

Composition

Middle East Export (geography) 30%

Pipeline

qualified rfp

Robust inquiries from both domestic and export customers

Cancellations & deferrals

deferred: Shipments to Middle East scheduled for March '26 deferred due to West Asia crisis and logistics disruptions.

Order book is strong, and the company is confident in achieving its FY27 revenue target, with deferred shipments now resuming.

Source: Prepared remarks

Capital allocation

high confidence

Capex ₹120 Cr entirely through internal accruals
- Gavasad expansion number three, adding 6,500 MVA capacity to reach 14,000 MVA total. ₹120 Cr
The capital expenditure of approximately INR120 crores is being funded entirely through internal accruals.
Debt Gross ₹0 Cr · Net ₹0 Cr · 0.0× EBITDA

Shilchar remains debt free with cash and cash equivalents of INR246 crores at the end of financial year '26
Liquidity Cash ₹246 Cr A part of cash and cash equivalents will be used to finance ongoing capex.

Shilchar remains debt free with cash and cash equivalents of INR246 crores at the end of financial year '26, a part of which will be used to financing our ongoing capex.

Guidance & targets

Revenue

Revenue from Operations Revenue · FY27 · Medium confidence INR800-850 crores

Previously INR850-900 crores → INR800-850 crores

So our target for the entire year is INR800 crores and that we are very confident to achieve. ... We are looking for that target. I mean, it will be INR800 crores to INR850 crores. Just conservatively, I am saying INR800. ... It can reach to INR900 crores also.

— Alay Shah

Margin

EBITDA Margin Margin · FY27 · Medium confidence 29-31%

Yes, we'll do our best to maintain the same margin or even increase the margin.

— Alay Shah

Capacity

Total Installed Capacity Capacity · April '27 · High confidence 14,000 MVA

From 7,500 MVA today

our Gavasad expansion number three, which will add 6,500 MVA and take our total installed capacity to 14,000 MVA, remains on track for commissioning in April '27.

— Alay Shah
New Facility Commissioning Capacity · April '27 · High confidence April '27

our Gavasad expansion number three... remains on track for commissioning in April '27.

— Alay Shah
New Facility Full Utilization Capacity · FY29-FY30 · Medium confidence FY29-FY30

I would say, Yes, FY29 to FY30; yes, you can say that.

— Alay Shah

Volume

MVA Production Volume · FY27 · Medium confidence 7,000 MVA

From 6,000 MVA today

Around 7,000 MVA.

— Alay Shah

Product

Higher Voltage Class Transformers Product · Post new facility readiness · High confidence Up to 160 MVA 220 kV class

From Up to 132 kV class today

Yes, so the new facility what we are making will have a capacity to make transformers up to 160 MVA 220 kV class.

— Alay Shah

What to watch in Q1 FY27

Resolution of deferred Middle East shipments

next quarter

Current INR35-40 crores deferred from March '26

Target Shipments resumed in April, situation improving

Why it matters

Crucial for recovering lost Q4 revenue and improving Q1 FY27 performance.

These shipments have been deferred and not cancelled. Dispatches to the region resumed in April and the situation has improved considerably since then.

Risks & concerns

Middle East crisis and logistics disruptions
high

Caused deferral of INR35-40 crores of shipments in March '26, impacting Q4 revenue and margins, but situation is improving.

Management acknowledged
Raw material price volatility
high

Oil prices doubled in March '26, and other commodities increased 10-25%, leading to gross margin compression in Q4.

Management acknowledged
Customer acceptance of price revisions
medium

Ongoing dialogues with customers to pass on increased raw material costs; some have agreed, others are still under discussion.

Analyst acknowledged
US tariff policy uncertainty
medium

Past 50% tariffs impacted orders, but now reduced to 10%, allowing the company to compete and win orders again.

Management downplayed

Q&A highlights

6 direct

Gross margin compression and raw material impact Direct

in Q4 basically our export is considerably less. Main reason for that is that we could not ship out the transformers in March due to this Middle East crisis and that has reduced our export compared to the domestic and that has changed the ratio of our raw material consumption. And secondly, I mean all the raw material prices have gone up, but in the month of March specifically, we were hit by the increase in oil price.

Clarified the specific reasons for Q4 margin pressure, attributing it to both lower export mix and rising raw material costs, especially oil.

Asked by Ayush D

Ability to pass on price hikes to customers Direct

Yes. So we have approached almost all customers for the price increase, revision in price and the active dialogues are going on. I mean, some of the customers have already agreed for the price increase and with some customers we are still under discussion.

Addressed a key concern about margin recovery, indicating ongoing negotiations and some success in passing on increased costs.

Asked by Ayush D

Impact of Middle East crisis on Q4 sales and Q1 FY27 outlook Direct

So like I said in my opening remarks, the shipping has already resumed and we have already started shipping out transformers which we were not able to ship in the month of March and slowly, slowly that situation is becoming normal. And we have a very strong order book.

Provided an update on the resolution of the Middle East shipping disruptions and its positive implications for Q1 FY27, confirming deferred orders are being dispatched.

Asked by Shrenik Mehta

Revision of FY27 revenue guidance Partial

We are looking for that target. I mean, it will be INR800 crores to INR850 crores. Just conservatively, I am saying INR800. ... It can reach to INR900 crores also. I mean, it's not that we are not targeting, but we have to take a conservative approach when we say any figures.

Clarified the company's FY27 revenue target, explaining the conservative approach despite previous higher targets and potential to exceed the stated range.

Asked by Garvit Goyal

Gross margin impact on existing order book vs new orders Direct

But going forward, this is a temporary situation. Going forward, whatever new inquiries we get, of course, we'll be quoting higher price considering the present raw material cost. So then there will be no impact on the margins. ... Not really, because if customer has placed an order with a delivery in, say, Q2 or Q3, I mean, they will have to give us the price rise.

Explained the strategy for margin protection, differentiating between new orders (quoted at higher prices) and existing orders (where price revisions are being negotiated), suggesting margin recovery is possible even on current backlog.

Asked by Abhijeet Singh

Capacity utilization discrepancy and actual production Direct

The capacity utilization that has been given on the presentation is on the basis of dispatches. We have obviously produced more and we are carrying that as closing stock as of 31st March which will be dispatched in the coming year. So the utilization in terms of production is higher, we are not at liberty to share that but it is higher than 79%.

Addressed a key analyst concern about seemingly low capacity utilization (79% for FY26) by clarifying that the reported figure is based on dispatches, not production, and actual production was higher, leading to inventory build-up.

Asked by Prateek Shrivastava

US market opportunity and tariff impact Direct

So we have done around 18% to 19%. I mean, 18% to 19% of our revenue has come from the US exports. And this year US was like up and down because in August last year, the US announced a tariff of 50% on Indian goods, where we lost some orders. Now it has come down to 10%. So now we are able to compete, and we have started getting orders from all our US customers. And the opportunities in next three years is going to be great, and we are expecting, quite a good growth in the US export.

Provided specific details on US export contribution, the impact of past tariffs, and the positive outlook for future growth in the US market due to reduced tariffs.

Asked by Bhavya

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance and Full Year Overview

Shilchar Technologies reported a full year FY26 revenue from operations of INR652 crores, marking a 5% year-on-year growth. EBITDA for the year stood at INR190 crores with a 29% margin, and Profit After Tax (PAT) was INR158 crores, an 8% increase year-on-year, leading to an EPS of INR138. However, Q4 FY26 saw a dip with revenue at INR152 crores, EBITDA margin at 21%, and PAT at INR28 crores, primarily due to external factors.

Impact of External Factors: Middle East Crisis and US Tariffs

The Q4 performance was significantly affected by two external factors. Firstly, the crisis in West Asia led to logistics disruptions, deferring approximately INR35-40 crores of shipments to Middle East customers from March '26. These shipments have since resumed in April '27. Secondly, uncertainty around US tariff policy in preceding quarters moderated order intake from US customers. While tariffs were 50% last year, they have now reduced to 10%, allowing the company to regain competitiveness and secure new orders from the US market.

Capacity Expansion and Capex Plans

The company's Gavasad expansion (number three) is progressing as planned, aiming to add 6,500 MVA, increasing the total installed capacity to 14,000 MVA. This INR120 crore capital expenditure is entirely funded through internal accruals and is on track for commissioning in April '27. This new facility is expected to drive the next phase of growth from FY27-28 onwards, with the current 7,500 MVA capacity operating at almost full utilization.

Order Book and Business Outlook

Shilchar Technologies maintains a strong order book of INR452 crores as of the call date. The company has robust order visibility for FY27, targeting approximately INR800-850 crores in revenue, supported by strong inquiries from both domestic and export markets. Management expressed confidence in achieving this target, noting that the global transformer demand remains favorable, driven by investments in grid infrastructure, T&D capacity, and renewable energy build-out.

Raw Material Price Volatility and Margin Management

Gross margin compression in Q4 was attributed to a less favorable export mix and a sharp increase in raw material prices, particularly oil, which doubled in March '26, while other commodities rose by 10-25%. The company is actively engaging with customers for price revisions, with some already agreeing to the increases. Management expects margins to stabilize as new orders are quoted at higher prices reflecting current raw material costs and negotiations on existing contracts progress.

US Market Opportunity and Product Development

US exports contributed 18-19% of the company's revenue. Despite past challenges from a 50% US tariff on Indian goods, the tariff has now reduced to 10%, enabling Shilchar to compete effectively and secure new orders. The company anticipates significant growth in US exports over the next three years. Furthermore, the new facility will enable the production of higher voltage class transformers, up to 160 MVA 220 kV, expanding product offerings beyond the current 132 kV class.

This is an AI-generated summary of a publicly available earnings call transcript.

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