Fabtech Techn. — Q4 FY25 earnings call

Call held 10 Jun 2025

Management summary

Fabtech Technologies Cleanrooms Limited reported a strong FY25, with consolidated revenues growing 54.1% and net profit soaring 138.9%, driven by robust execution and margin expansion. The company significantly improved its working capital cycle and ROC, while strategically expanding its HVAC capabilities through Kelvin and securing its first semiconductor order. Despite acknowledging global economic uncertainties and labor challenges, management expressed optimism for continued growth, targeting 30-40% revenue growth for FY26 and maintaining 8-10% margins.

Highlights

  • Consolidated revenues grew by 54.1% year-on-year to INR 1,5003.19 lakhs for FY25, driven by infrastructure segment momentum and disciplined operations.

  • EBITDA increased by 88.2% to INR 1,690.74 lakhs, with the EBITDA margin improving by 205 basis points to 11.27%, reflecting efficient cost control and value engineering.

  • Net profit surged by 138.9% year-on-year to INR 1,329.56 lakhs, leading to a net profit margin expansion of 310 basis points to 8.8% for FY25.

  • The working capital cycle significantly improved by 50 days, from 173 days in FY24 to 123 days in FY25, indicating a tighter and more agile operating model.

  • Return on Capital (ROC) improved to 22.8% from 15.76% in the previous year, underscoring focus on disciplined capital allocation and high-return projects.

  • Strategic inorganic expansion included increasing stake in Kelvin Air Conditioning and Ventilation Systems Private Limited to 51.33%, strengthening HVAC capabilities.

  • Secured a landmark first order in the semiconductor industry, which will serve as a key reference point for future growth in this high-potential vertical.

  • Declared an interim dividend of INR 2 per share, demonstrating confidence in financial strength and long-term prospects.

Concerns

  • Management acknowledged persistent challenges, including global economic uncertainties and potential sectoral headwinds.

  • The industry faces labor issues and shortages, which the company is actively working to mitigate through training and automation.

Key financials

2 periods

H2 FY25

  • Revenue
    ₹8,810.24 lakh
    YoY +52.8%
  • Net Profit
    ₹795.38 lakh
    YoY +55.7%

FY25

  • Consolidated Revenue
    ₹15,003.19 lakh
    YoY +54.1%
  • EBITDA
    ₹1,690.74 lakh
    YoY +88.2%
  • EBITDA Margin
    11.3%
  • Net Profit
    ₹1,329.56 lakh
    YoY +138.9%
  • Net Profit Margin
    8.8%
  • Working Capital Cycle
    123 days
  • Return on Capital
    22.8%

What they filed

Q4 FY26: revenue up 146.6%, net profit up 160.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue58 62 88 76 143 +147%
EBITDA7 7 9 5 17 +143%
Net profit5 5 8 4 13 +160%
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

₹90 Cr

as of 2025-03-31 quantified

Composition

Mix 2 segments
  • Pharma 55%
  • Semicon/Electronics/Solar 33%

Share of order book by segment· partial disclosure (88% of the book)

Pipeline

other

Robust pipeline in excess of INR 300 crores across various sectors.

Management indicated a robust and happy pipeline, with significant opportunities across pharmaceuticals, data centers, semiconductors, and solar sectors.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    Okay, except inorganic growth, we will have a moderate capex, right? Yes.
  • Dividend ₹2/share (interim)
    We also announced an interim dividend of INR2 per share as a gesture of appreciation to our long-term shareholders.
  • M&A Kelvin Air Conditioning and Ventilation Systems Private Limited Acquisition · Closed

    Strengthens position in HVAC domain, critical component of cleanroom infrastructure, opens new avenues in high growth sectors.

    Increased stake to 51.33%, making it a subsidiary.

    Notably, we increased our stake in Kelvin Air Conditioning and Ventilation Systems Private Limited to 51.33%, which thus makes it a subsidiary, Yes?

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 30-40%
    And for this year, we'll grow by 30% to 40%, and then there will be a steady growth for next three to four years.

    — Anup Munshi

  • Revenue Growth Revenue · next two years · High confidence at least 40%
    Next two years, at least 40% growth, and beyond that, this is something, it will be something different. Too early to say. Okay.

    — Aasif Khan

Margin

  • EBITDA Margin Margin · going forward (FY26 and beyond) · High confidence 8-10%
    So, going forward, we'll be maintaining the margin that we have shown this year. It will be 8% to 10%.

    — Anup Munshi

Working Capital

  • Working Capital Cycle Working Capital · ongoing · Medium confidence further reduction
    Yes, we do. Of course, we are looking to reduce it further undoubtedly because as I said in my first part of the presentation that that is very critical for us.

    — Anup Munshi

What to watch in Q1 FY26

Revenue Growth for FY26

FY26
Current 54.1% YoY (FY25)
Target 30-40% growth

Why it matters

To assess if the company can sustain its high growth trajectory as guided.

And for this year, we'll grow by 30% to 40%, and then there will be a steady growth for next three to four years.

Risks & concerns

  • Global economic uncertainties and sectoral headwinds

    medium

    Challenges persist, including global economic uncertainties or any sectoral headwinds that may be there, but fundamentals are strong.

    Management acknowledged

  • Labor issues and shortages

    medium

    The entire industry faces labor issues and shortages, which the company is mitigating through training and potential automation (robotic welding).

    Management acknowledged

Q&A highlights

6 direct
Margin comparison between semiconductor and pharma/chemical segments Direct
So as far as margin is concerned, the semiconductor is not a very, very special margin project. It is, you know, in line with the pharmaceutical industry.

Clarifies that semiconductor segment margins are comparable to the established pharmaceutical industry, indicating stable profitability for new ventures.

Asked by Prasanjeet Paul

Kelvin's margin compared to Fabtech's standalone operations Direct
Yes, it is almost in line with Fabtech. So now last year we have closed at the 7% PAT.

Provides insight into the profitability of the newly acquired subsidiary, showing it aligns with the parent company's performance.

Asked by Prasanjeet Paul

Replacement cycle and maintenance demand for projects Partial
See, as far as these projects are concerned, once we complete the project, we hand over the entire system to their maintenance team, because they will have their chief engineer, their engineering team who are maintaining not only the air conditioning, as well as their other equipment cycle also. So that is the reason we maintain this system for one year. That is our defects liability period, or you can talk about, you know, a warranty period.

Explains the post-project engagement model, indicating that recurring revenue from maintenance is limited to a warranty period, with clients largely managing their own systems thereafter.

Asked by Prasanjeet Paul

Rationale for structuring the Fabtech group into multiple legal entities Direct
So today the promoters are out of business, they just are in the strategic role, professionals are handling it and that's the reason why we did what we did.

Reveals the strategic intent behind the multi-entity structure, focusing on professional management, investability, and creating product/project-centric divisions for better focus and growth.

Asked by Bhavika

Order book split between Fabtech and Kelvin Direct
50 would be Fabtech and the rest would be Kelvin.

Clarifies the contribution of the parent company versus the subsidiary to the consolidated order book of INR 90 crores.

Asked by Bhavika

Raw material procurement strategy and major cost components Direct
So, major raw materials are GPSC coil, rockwool and some isocyanate and polyol chemicals. And aluminum profile.

Provides transparency on raw material sourcing (indigenous) and identifies key cost drivers, which is crucial for understanding cost structure and margin stability.

Asked by Bhavika

Competition and company differentiators in the cleanroom industry Direct
So, but who has a manufacturing facility as state-of-the-art as we have? If there is anybody who is wanting to start modular partition manufacturing today, he will have a huge challenge of meeting those volumes. That is a differentiator that we possess.

Highlights the company's competitive advantages, particularly its in-house manufacturing capabilities and design expertise, which differentiate it from contractors.

Asked by Hitesh Randawa

Plans for increasing stake in Kelvin or other future acquisitions Partial
Yes, Ravi is smiling. Yes, we are on the way. We are on the way. We are on the way, you're right. ... Yes. Yes, as we said, consolidation is one of the strategies along with market expansion and product expansion. And you will see, yes, a good bit happening there.

Indicates ongoing strategic moves regarding Kelvin and a broader M&A strategy focused on consolidation and expansion, signaling future inorganic growth.

Asked by Advay

3 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY25

Fabtech Technologies Cleanrooms Limited delivered an exceptional financial performance for FY25, with consolidated revenues growing by 54.1% year-on-year to INR 1,5003.19 lakhs. This growth was supported by strong momentum in the cleanroom infrastructure segment and disciplined operations. Profitability also saw significant improvement, with EBITDA rising 88.2% to INR 1,690.74 lakhs, and the EBITDA margin expanding by 205 basis points to 11.27%. Net profit increased by 138.9% year-on-year to INR 1,329.56 lakhs, resulting in a net profit margin of 8.8%, an expansion of 310 basis points.

Strategic Milestones and Operational Efficiency

The company achieved several strategic milestones, including a significant reduction in its working capital cycle by 50 days, from 173 days in FY24 to 123 days in FY25, reflecting a more agile operating model. Return on Capital (ROC) improved to 22.8% from 15.76% in the previous year, highlighting effective capital allocation. Fabtech also increased its stake in Kelvin Air Conditioning and Ventilation Systems Private Limited to 51.33%, making it a subsidiary and strengthening its HVAC capabilities. A landmark first order in the semiconductor industry (INR 8.4 crores) was secured, positioning the company for future growth in this high-potential vertical.

Market Outlook and Growth Drivers

Management expressed optimism for future growth, targeting a 30-40% revenue increase for FY26 and at least 40% for the next two years, with steady growth thereafter. This outlook is driven by increasing demand for cleanroom solutions across data centers, semiconductors, and healthcare expansions. The company anticipates a 'real explosion' in the market post-2027, particularly from investments flowing into the semiconductor sector. Fabtech aims to maintain EBITDA margins between 8% and 10% going forward, balancing growth with profitability.

Capital Allocation and Shareholder Returns

In line with its commitment to shareholders, the company announced an interim dividend of INR 2 per share. While no major capex is planned for the next few years beyond inorganic growth, management indicated a 'moderate capex' for such strategic initiatives. The increase in stake in Kelvin is part of a broader strategy of inorganic expansion and consolidation. The company is exploring further acquisition plans, particularly in areas like air handling unit manufacturing or automation, to expand its footprint and capabilities.

Competitive Landscape and Differentiators

Fabtech differentiates itself through its in-house manufacturing setup, which allows for increased control over project timelines and expansion into high-value sectors. The company emphasizes its role as a designer of cleanrooms and pharma projects, not just a contractor, with critical components manufactured internally. Its domain experience, R&D capabilities, and project management teams across India and internationally are cited as key competitive advantages. The company also highlighted its focus on value engineering, which has contributed to margin improvement.

Addressing Industry Challenges

Management acknowledged persistent challenges such as global economic uncertainties, sectoral headwinds, and labor shortages. To mitigate labor issues, the company is investing in training programs through partnerships with universities and establishing learning centers. Fabtech is also exploring the introduction of robotic welding machines and increasing factory-level work to reduce reliance on manual labor and enhance efficiency.

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