Aartech Solonics Limited — Q4 FY26 earnings call

Call held 28 May 2026

Management summary

Aartech Solonics reported a robust Q4 and FY26, with revenue reaching ₹40 crores and a significant 3x increase in EBITDA and PAT compared to the previous year, driven by effective cost management. The company maintains a strong financial position with no long-term debt and growing cash reserves. Strategic focus remains on R&D-led innovation, global expansion, and the development of a new manufacturing facility. While geopolitical uncertainties impact export market predictability and certain segments face intense competition, Aartech is targeting an order book of ₹25 crores by June 2026, emphasizing its commitment to sustained growth and value creation.

Highlights

  • Revenue for FY26 reached ₹40 crores, demonstrating steady organic growth.

  • EBITDA and PAT for FY26 were 3x higher than FY25, attributed to minimized expenses and disciplined operations.

  • EPS drastically improved in FY26, reflecting enhanced profitability.

  • The company maintains a debt-free status, with no long-term debt and only cash credit facilities for working capital.

  • Cash and cash equivalents significantly increased to ₹328 lakhs at FY26 end, up from ₹168 lakhs last year, indicating strong liquidity.

  • A new manufacturing facility in Narmadapuram is under civil infrastructure work, with first operations expected by early next year.

Concerns

  • Export markets are highly unpredictable due to current geopolitical situations, making it difficult to project future contributions.

  • The Control and Relay Segment faces tough competition and is price-sensitive, leading to lower margins despite high volumes.

  • The Defence sector, while promising, has high entry barriers and long gestation periods for trials and validations, requiring significant investment and time.

Key financials

  1. Revenue ₹40 Cr
  2. EBITDA Growth 3×
  3. PAT Growth 3×
  4. EBITDA Margin 15%
  5. Flagship Product Margin 35%
  6. Net Product Margin 10%

What they filed

Q1 FY27: revenue up 68.0%, net profit up 146.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue9 10 11 4 12 +24%7 −25%17 +65%7 +68%
EBITDA1 1 -2 -0 2 +139%2 +115%1 +173%1 +1089%
Net profit2 2 -2 1 2 +42%1 −68%1 +137%2 +146%
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

₹10 Cr

as of 2026-04-01 quantified

Execution

typically 120, 150 or 180 days projects, taking about five months to execute and invoice.

Composition

Mix 2 geographies
  • Domestic 90%
  • Export 10%

Share of order book by geography

Pipeline

qualified rfp

bids participated in

Management expects the order book to grow to ₹25 crores by the end of June 2026, driven by ongoing bids.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • New manufacturing facility in Narmadapuram
    And in 2025, we were actually awarded, by the MP Government, in a renewable and power equipment cluster, one parcel of land, where we would be doing manufacturing of particular power equipment and also understanding the renewable markets. And this is around 90 kilometers from Bhopal, close to Narmadapuram. Work is still in progress, and we are doing the civil infrastructure right now as a progress there.
  • Debt Debt disclosed
    In terms of long-term debt, we really do not have debt on our books except for some cash credit facilities that we are availing for working capital. And that actually makes us a very debt-free company on our books.
  • Liquidity Cash ₹328 lakh Cash and cash equivalents increased from ₹168 lakhs last year to ₹328 lakhs this year.
    As we can see, by the end of it, the cash and cash equivalents were a healthy number of Rs. 328 lakhs vis-à-vis Rs. 168 lakhs last year.

Guidance & targets

Order Book

  • Total Order Book Order Book · by end of June 2026 · High confidence ₹25 crores
    However, by the end of June, we are expecting that our order book should come to somewhere around Rs. 25 crores.

    — Arati Nath

Capacity

  • Narmadapuram Facility Operations Start Capacity · next 9-10 months · High confidence early next year
    We laid our foundation stone over there, and we are expecting our first operations to begin by early next year. The civil and infrastructure work is underway, and we are expecting that that should be done in the next nine to ten months.

    — Arati Nath

  • New Factory Commercial Operations Capacity · FY27-FY28 · High confidence end of 26-27 or early 27-28
    And as I just mentioned, that commercial operations are targeted by the end of 26-27 or early 27-28.

    — Arati Nath

What to watch in Q1 FY27

Order book value

by end of June 2026
Current ₹10 crores (as of April 1, 2026)
Target ₹25 crores

Why it matters

To track the company's ability to convert pipeline into firm orders and achieve short-term growth targets.

However, by the end of June, we are expecting that our order book should come to somewhere around Rs. 25 crores.

Risks & concerns

  • Geopolitical unpredictability impacting export markets

    medium

    Current geopolitical situations make export market projections very unpredictable.

    Management acknowledged

  • Tough competition and price sensitivity in Control and Relay Segment

    medium

    This segment faces very tough competition and is price-sensitive, impacting margins.

    Management acknowledged

  • High entry barriers and long gestation periods in Defence sector

    medium

    The defence sector requires strong trials, validations, and performance metrics over a long period.

    Management acknowledged

  • Challenges in innovation-led growth and product realization

    low

    Many challenges exist in bringing innovative products to market, but the company is addressing them.

    Management acknowledged

Q&A highlights

1 direct, 2 evasive
Segment scalability, margin potential, and revenue scale Partial
So, what I'm trying to say here is that there are different products who have different life cycles and different demands and at different times. Today, when we are sitting here, we all see that defence is one of the most sunrise sectors.

Analyst sought specific numerical guidance on segment-wise revenue and margin potential, but management provided a qualitative overview of product life cycles and sector attractiveness without numbers.

Asked by Shailesh Jain

Numerical revenue expectations for Defence segment Evasive
So, the estimates, if I have to give any number, sound very, would sound very difficult at this point of time. But the projections that we have done for the entire market at this point of time, the potential market size is more than five hundred crores.

Analyst pressed for specific revenue numbers for the high-growth Defence segment, but management declined to provide them, citing difficulty and market potential instead of company targets.

Asked by Shailesh Jain

Margins on Middle East orders and export revenue percentage Partial
So, sir, to actually understand the export markets and with the current geopolitical situations, it's very unpredictable. However, from a target point of view, when I'm talking about our flagship product, BTS 2000, average margins are somewhere around 35% to 40 %.

Analyst inquired about specific margins on international orders and the future export mix, to which management cited geopolitical unpredictability for exports and provided flagship product margins, but not specific export order margins.

Asked by Shailesh Jain

Growth trajectory (revenue, EBITDA, quality of growth) for FY27 and next three years Partial
So, what we are doing right now is a twin-pronged strategy. On one hand, we are ensuring that whatever we have built for ourselves, where we are finding customers, we are increasing the width and the depth so that organic traction can be more or less ascertained.

Analyst sought a clear outlook on CAGR and margin range for the next 2-3 years, but management provided a strategic overview of organic and inorganic growth drivers without specific numerical targets.

Asked by Devesh Shrimali

Operating leverage and margin expansion Partial
So, Arati just mentioned that our flagship product enjoys a 35-40% margin. Obviously, that tapers down to a net of 10-15% because of other more competitive products. So, yes, there would be, the point is, we have to understand under what situations are we able to find these opportunities to serve the markets at very healthy margins.

Analyst questioned if operating leverage would lead to margin expansion beyond the current 15% EBITDA, and management explained product-specific margins but did not commit to a future overall margin expansion target.

Asked by Devesh Shrimali

Management's aspiration for becoming a ₹100 crore company Evasive
I'm not able to understand that what is management aspiration in terms of becoming 100-crore company at two years down the line. So, I mean, you know, please try to understand the other side context also. Just take this as a feedback if you can, right?

Analyst provided feedback that management's aspiration for a ₹100 crore company in two years was unclear, indicating a lack of specific financial targets from management during the call.

Asked by Devesh Shrimali

Current order book in numerical terms and execution timeline Direct
As of the beginning of the financial year, we had around Rs. 10 crores of order book in hand. And as far as the number of bids that we have right now participated in are concerned, they are approximately Rs. 15 crores in value. Obviously, the timelines for the results vary. However, by the end of June, we are expecting that our order book should come to somewhere around Rs. 25 crores.

Analyst sought specific figures for the current order book and its execution, which management provided, including the current book, pipeline, and a near-term target.

Asked by Shailesh Jain

2 min read 6 chapters

Detailed narrative

FY26 Financial Performance Highlights

Aartech Solonics reported a strong financial performance for FY26, with revenue reaching ₹40 crores. The company achieved a significant 3x increase in both EBITDA and PAT compared to FY25, primarily driven by effective cost minimization and disciplined operations. EPS also saw a drastic improvement in FY26, reflecting enhanced profitability and operational efficiency. An analyst noted an EBITDA margin of approximately 15% for the year, while management indicated flagship products enjoy 35-40% margins, tapering to a net 10-15% across the portfolio.

Debt-Free Status and Liquidity

The company maintained a robust financial position, operating as a debt-free entity with no long-term debt on its books. Any existing debt is limited to cash credit facilities utilized for working capital requirements. Aartech's liquidity position also strengthened, with cash and cash equivalents increasing to ₹328 lakhs at the end of FY26, up from ₹168 lakhs in the previous year. This healthy cash balance provides financial flexibility for future growth initiatives.

Order Book and Pipeline Outlook

As of the beginning of the financial year, Aartech had an order book of approximately ₹10 crores. The company has actively participated in bids valued at around ₹15 crores, indicating a healthy pipeline. Management expressed confidence in converting these opportunities, targeting an order book of ₹25 crores by the end of June 2026. The typical execution timeline for projects ranges from 120 to 180 days, or about five months, from order receipt to invoicing.

Strategic Initiatives and Global Expansion

Aartech is actively pursuing strategic growth initiatives, including global expansion into Middle East markets (Qatar, Oman) and Africa, where it has secured projects against competitors like ABB. The company is also focusing on 'Make in India' and 'Atmanirbhar Bharat' initiatives, contributing significantly to the defence sector through import substitutions for the Indian Army and Navy. R&D remains a core focus, with two patents currently in the application stage, emphasizing innovation in critical energy applications.

New Manufacturing Facility in Narmadapuram

In 2025, Aartech was awarded a parcel of land by the MP Government in a renewable and power equipment cluster near Narmadapuram. Civil and infrastructure work for this new manufacturing facility is currently underway and is expected to be completed within the next nine to ten months. The company anticipates commencing its first operations at this site by early next year, with commercial operations targeted for the end of FY27 or early FY28, marking a significant step in capacity expansion and market diversification.

Product Portfolio and Market Focus

Aartech's product portfolio spans various energy applications, including control and relay panels, Bus Transfer Systems (BTS 2000), Fault Current Limiters, and Adaptive Alternative Power Modules (AAPM). BTS 2000 serves process industries, oil & gas, and power generation, while AAPM is gaining traction in defence markets. The company also offers products like Kranking Ultracapacitors, Oxto Flywheel (under development), and BestCase industrial plastic enclosures, catering to diverse sectors from retail to B2B.

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