RMC Switchgears — Q2 FY26 earnings call

Call held 21 Nov 2025

Management summary

RMC Switchgears reported strong financial performance for H1 FY26, driven by robust execution across its EPC segments. The company announced a strategic deferral of its solar module manufacturing plant capex, opting to fund growth through internal accruals and focus on its core electrical and solar EPC businesses. Significant progress was noted in the commercialization of its PulseBox technology and strengthening of its management team, while maintaining financial discipline with a Debt-to-Equity ratio of 0.59 times.

Highlights

  • Revenue from Operations reached ₹221.61 crore in H1 FY26, marking a 111.50% year-on-year growth.

  • Profit After Tax (PAT) increased by 97.93% year-on-year to ₹20 crore.

  • EBITDA rose by 71.46% to ₹34 crore, with an EBITDA margin of 15.34%.

  • The company's order book stands at approximately ₹825 crore, executable over the next 12 months.

  • Strategic decision to defer the 1 Gigawatt solar module manufacturing plant capex due to policy and technology landscape uncertainties.

  • PulseBox, an innovative low-tension power distribution system, completed its Proof of Concept (POC) and samples are deployed for testing, with orders expected in 6-8 months.

  • RMC Switchgears is actively participating in tenders worth ₹1,500 crore, with an order conversion ratio of 30-35%.

Key financials

  1. Revenue from Operations ₹221.61 Cr +111.5%YoY
  2. PAT ₹20 Cr +97.9%YoY
  3. EBITDA ₹34 Cr +71.5%YoY
  4. EBITDA Margin 15.3%
  5. Debt-to-Equity Ratio 0.59×
  6. Working Capital Cycle 60 days

What they filed

Q1 FY27: revenue down 58.0%, net profit down 54.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q2 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue85 105 164 76 195 +129%18 −83%91 −45%32 −58%
EBITDA14 20 16 7 33 +136%-5 −126%10 −38%6 −8%
Net profit7 10 10 3 19 +171%-7 −175%4 −61%1 −55%
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

Share of Revenue Contribution
₹211.61 Cr Total
  • Solar EPC ₹104.46 Cr 49.4%
  • Electrical EPC ₹57.49 Cr 27.2%
  • Electrical Products ₹49.66 Cr 23.5%

Order book

high confidence

Total value

₹825 Cr

as of 2025-11-21 quantified

Execution

to be delivered over the next 12 months

Pipeline

L1 awaiting loa

Participated in tenders worth ₹1,500 crore, L1 in tenders worth ₹70 crore. Order conversion ratio of 30-35%.

The company has a healthy order pipeline providing visibility and confidence, and is actively participating in new tenders with a good conversion ratio.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Cut — policy and technology landscape uncertainties, DCR cell requirement, avoiding outdated technology · internal accruals, selective debt, and operational cash flows
    We will instead fund our growth through internal accruals, selective debt, and operational cash flows.
  • Debt Debt disclosed
    operating with a Debt-to-Equity ratio of 0.59 times and a working capital cycle of 60 days.
  • M&A BES manufacturers Joint venture · Signed

    to participate in BES tenders and leverage capabilities for EPC

    We have already secured two to three joint ventures with BES manufacturers, and we are participating in the tenders.

Guidance & targets

Revenue

  • Sales Revenue · by 2030 · Medium confidence ₹5,000 crore
    We recognize that our long-term aspiration of achieving ₹5,000 crore in sales by 2030 is ambitious and requires structural scaling with stability.

    — Mr. Ankit Agarwal

  • Smart Metering Enclosure Segment Growth Revenue · year-on-year until completion · Medium confidence double-digit growth
    I believe the smart metering enclosure segment should see double-digit growth year-on-year until it gets completed, because whatever the roadblocks are there, they are getting eliminated.

    — Mr. Ankit Agarwal

Volume

  • Order Conversion Ratio Volume · ongoing · High confidence 30-35%
    Our order conversion ratio is around 30% to 35% of whatever we bid.

    — Mr. Ankit Agarwal

What to watch in Q3 FY26

Solar module manufacturing plant re-evaluation

Next quarter / As soon as possible
Current Capex deferred
Target Clarity on plans / Re-evaluation outcome

Why it matters

A major capex decision impacting future growth, capacity, and capital allocation strategy.

I will not be able to commit anything until we work on it because of the recent developments. But yes, we are working on it, and we will get back to you with the numbers as soon as possible.

Risks & concerns

  • Policy and technology landscape uncertainties in solar module manufacturing

    medium

    Uncertainty regarding DCR cell requirements and rapid shifts in global technology (PERC to TopCon and HJT) led to deferral of capex.

    Management acknowledged

  • Working capital intensity in EPC projects

    medium

    Government retention amounts and payment cycles for EPC projects lead to increased current assets and short-term borrowings.

    Management acknowledged

  • Uncertainty in the power sector due to government policy changes (e.g., 42 GW contract hold)

    low

    Management stated existing orders are contractual and not impacted, and they focus on EPCs, not PPAs, across state governments.

    Analyst downplayed

  • Competitive landscape in EPC segments

    low

    Management believes its focus on government projects and pre-qualification requirements provides an entry barrier against smaller competitors.

    Analyst acknowledged

Q&A highlights

5 direct, 1 evasive
Impact of 42 Gigawatt contract on hold and FY27 outlook Partial
Whatever orders we have, no impact will be there on the orders... As far as the further 42 Gigawatt is concerned, they have stopped the Power Purchase Agreements (PPAs) and not the EPCs, which is what we are doing... I cannot commit the numbers, but yes, whatever we are targeting, we can be sure that we will be entering the next financial year with that order book.

Addresses a major sector-wide concern regarding government policy changes and clarifies the company's exposure and future growth visibility, though specific FY27 numbers are withheld.

Asked by Aman Soni

Investment in solar module manufacturing and change in growth plans Direct
the module manufacturing plan, we have paused, we have deferred; we have not eliminated the thing. We will be doing it, that is for sure... We will wait until we get clarity.

Explains a significant strategic shift and deferral of a major capex, impacting future growth trajectory and capital allocation decisions.

Asked by Aman Soni

Guidance for H2 FY26 and FY27, and 30% CAGR target Evasive
Actually, that growth included the solar module, and as far as this module is on pause, we still have to work out the growth plans... on absolute numbers, I am not able to give guidance right now... I will not be able to commit anything until we work on it because of the recent developments.

Highlights the uncertainty in near-term financial projections and the lack of specific guidance following the strategic shift.

Asked by S. Singh

Competitive landscape and pricing strategy in EPC projects Direct
The problem is not with the big companies; the problem is with the small companies when you have to compete with them. But there comes a benefit of working in government because there is an entry barrier in government, which is known as pre-qualification requirements.

Provides insight into RMC's competitive strategy and perceived advantage in securing government projects due to pre-qualification requirements.

Asked by Vinay Lakhera

Status of Smart PulseBox and interest from private players Direct
the POC has been completed, and currently the samples have been deployed under various states, and they are being tested... It might take six to eight months until we get some orders... Yes, private utility companies like Adani and BSES had shown interest, but first, we do not want to open doors with many customers because a lot of technical expertise and human intervention is required at once.

Details the progress and commercialization timeline for a new, innovative product and the company's cautious approach to private sector engagement.

Asked by Abhishek Agarwal

Increase in other current assets and short-term borrowings Direct
the rise in current assets is due to the retention amount that the government keeps while releasing the payment... The increase in short-term borrowings means that we have taken these short-term borrowings to meet the creditor payment days because of the working capital requirement in EPCs.

Explains the working capital dynamics and its impact on the balance sheet, a key concern for capital goods companies with long project cycles.

Asked by Hriday Jain

Margin trends and strategic decision on profitability Direct
The change in margin is a strategic decision at this stage of our growth. We are positioning scale and absolute profit, rather than margin percentage... We are focusing on the value. Margins can never be the same when you are dealing in the highly competitive market, and that is a strategic decision we are taking.

Clarifies the reason for EBITDA margin contraction, indicating a strategic shift towards volume expansion and absolute profit growth rather than short-term percentage margins.

Asked by Pranav Bohra

3 min read 7 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

RMC Switchgears reported robust financial results for H1 FY26, with Revenue from Operations growing by 111.50% year-on-year to ₹221.61 crore. Profit After Tax (PAT) saw a significant increase of 97.93% to ₹20 crore, while EBITDA rose by 71.46% to ₹34 crore. The EBITDA margin stood at 15.34%, a conscious strategic decision to prioritize volume expansion and market share in EPC segments. The company maintained strong financial discipline with a Debt-to-Equity ratio of 0.59 times and a working capital cycle of 60 days.

Strategic Shift and Solar Module Capex Deferral

The company announced a strategic deferral of its planned 1 Gigawatt solar module manufacturing plant capex. This decision was driven by uncertainties in the policy and technology landscape, particularly regarding DCR cell requirements and rapid shifts from PERC to TopCon and HJT technologies. Management emphasized that this is a strategic pause, not an abandonment, aiming to ensure future-readiness and safeguard Return on Capital Employed (ROCE). Growth will instead be funded through internal accruals, selective debt, and operational cash flows.

Business Model and Integrated Verticals

RMC Switchgears operates across four integrated verticals: Electrical Products, Electrical EPC, Solar EPC, and Solar Products, focusing on solutions for electrical theft, reliable power, and electrocution. In H1 FY26, Solar EPC contributed 52% (₹104.46 crore) of total revenue, Electrical EPC 26% (₹57.49 crore), and Electrical Products 22% (₹49.66 crore). The company aims to evolve into a Renewables Infrastructure Integrated Player, leveraging its existing electrical infrastructure expertise.

PulseBox Commercialization Update

The innovative low-tension power distribution system, PulseBox, successfully completed its Proof of Concept (POC) during Q2 FY26. Samples are currently deployed and being tested across various states, with negotiations for utility approvals and formal pilot configurations underway. Management anticipates receiving commercial orders within six to eight months. The company sees a huge addressable market, with even a 1% conversion representing a significant opportunity.

Order Book and Tender Pipeline

The current order book stands at approximately ₹825 crore, which is expected to be delivered over the next 12 months, providing strong revenue visibility. RMC Switchgears has actively participated in tenders worth ₹1,500 crore for electrical and solar EPC projects and is L1 in tenders worth ₹70 crore, awaiting Letter of Award. The company maintains an order conversion ratio of 30-35% of the tenders it bids on.

Human Capital and Management Strengthening

RMC Switchgears has focused on strengthening its human capital and leadership. Key appointments include Mr. Samujjal Ganguly as Business Head of RMC Green Energy Private Limited and Mrs. Shivani Bairathi as Compliance Officer. Mrs. Neha Agrawal assumed the additional charge of Chief Financial Officer. The company also inducted two senior professionals in its financial and accounts department and implemented an ESOP policy to align employee growth with company success.

Competitive Strategy in EPC and Government Projects

In the competitive EPC landscape, RMC positions itself as a 'solution company' focused on addressing customer problems like electrocution and electrical theft. The company leverages its credentials and pre-qualification requirements in government projects, which act as an entry barrier against smaller competitors. Management believes its integrated approach across electrical products, EPC, and solar gives it a unique competitive edge.

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

More Capital Goods earnings calls