Detailed Narrative
Strong H1 FY26 Financial Performance
Rajesh Power Services Limited reported robust financial results for H1 FY26, with revenue growing by an impressive 104% to ₹638 crore. EBITDA saw a 126% increase, reaching ₹84 crore, translating to an EBITDA margin of 13.16%. Net Profit after Tax (PAT) also surged by 99% to ₹59 crore, achieving a PAT margin of 9.22%. These figures underscore the company's strong operational execution and strategic growth initiatives.
Significant Order Book and Pipeline
The company achieved a remarkable order inflow of ₹2,200 crore in the first six months of FY26, contributing to an unexecuted order book exceeding ₹3,500 crore. This order book is expected to be executed over the next 18 to 24 months, providing strong revenue visibility. Management anticipates a full-year order inflow of ₹5,000 crore and projects the closing unexecuted order book for FY26 to be around ₹4,500 crore, indicating sustained growth momentum.
Strategic Expansion and Market Diversification
Rajesh Power is actively expanding its geographical footprint beyond Gujarat, with successful entries into states like Rajasthan, where the order book now stands at ₹200-250 crore. The company is also executing projects in Uttarakhand and exploring opportunities in Madhya Pradesh, Orissa, and Jharkhand. This diversification strategy aims to leverage growing infrastructure spending across India and reduce regional concentration risk.
Focus on High-Voltage Segments and Smart Grid Solutions
The company has made a significant breakthrough by entering the 400 kV gas-insulated substation (GIS) segment, positioning itself for larger multi-central power grid projects. Additionally, its partnership with HKRP Innovations Limited focuses on smart-energy management solutions, including SCADA systems and IoT-based tools. This strategic focus on advanced technologies and higher voltage segments enhances its capabilities and market reach.
Working Capital Management and Funding Plans
Despite strong operational performance, cash flow from operations appears slightly negative due to the inherent nature of the EPC business, which requires significant retention money, security deposits, and performance guarantees. To support its ambitious growth targets, the company plans to enhance its banking limits from the current ₹270 crore to ₹400 crore, which is expected to be sufficient for executing future orders without immediate fundraising.