Ador Welding Limited — Q4 FY26 earnings call

Call held 30 Apr 2026

Management summary

Ador Welding reported a resilient Q4 and FY26, with standalone revenue growing 2% to INR1,135 crores and an EBITDA margin of 12%. The company successfully recovered INR14 crores from an old Kuwait project and is actively focusing on new product introductions and automation. Management outlined capex plans of INR30-35 crores for FY27, primarily for welding consumables, and reiterated its aspirational target of INR2,000 crores turnover by FY29, while navigating ongoing inflationary pressures and supply chain challenges.

Highlights

  • FY26 standalone revenue grew by 2% to INR1,135 crores.

  • FY26 standalone EBITDA margin stood at 12%, with gross margins at 38% (up 250 bps).

  • PBT for FY26 standalone was INR130 crores, excluding the onerous cost of the Uran project.

  • Successfully recovered INR14 crores from the old Kuwait project.

  • Strong focus on new product introductions, including Made in India robotic lines, nuclear-approved consumables, and products for the wind manufacturing industry.

Concerns

  • Q4 FY26 revenue growth was approximately 3%, indicating a slower quarter-on-quarter growth.

  • Ongoing inflationary effects due to global and macro circumstances impacting the business environment.

  • Supply chain shocks continue to create lack of clarity for planning purposes.

  • Income tax demand of INR14 crores is under appeal, with BIS hearings still pending magistrate court resolution.

Key financials

2 periods

Headline

  • Revenue
    ₹1,135 Cr
    YoY +2%
  • EBITDA Margin
    12%
  • Gross Margin
    38%
  • PBT (excl. Uran)
    ₹130 Cr
  • RoCE
    23%
  • Kuwait Project Recovery
    ₹14 Cr

Q4

  • Revenue Growth
    —
    YoY +3%
  • EBITDA
    ₹38 Cr
  • Gross Margin
    36%
  • PBT (excl. Kuwait)
    ₹39 Cr

What they filed

Q1 FY27: revenue up 22.6%, net profit up 800.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue269 274 310 252 281 +4%288 +5%319 +3%309 +23%
EBITDA20 23 31 -4 35 +75%44 +91%47 +52%36 +1000%
Net profit7 15 18 -4 25 +257%27 +80%34 +89%28 +800%
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

low confidence
The company operates on a quick cycle with no long order book periods, but noted its 'best order book for us on the welding automation than we have ever seen' qualitatively.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹30 Cr
    • Maintenance capex ₹10 Cr
    • New lines for welding consumables
    Our capex is generally in the region of approximately INR30 crores-INR35 crores for the coming year. ... this is all welding and primarily on the consumables, not on equipment.

Guidance & targets

Revenue

  • FY29 Turnover Revenue · FY29 · Medium confidence INR2,000 crores
    We are still following the principle of doing that, but the main principle that drives that is to triple our earnings over that much period of time. And that is what we are working towards and we have seen that as having a lot more success because the base economy is finding it hard to be able to deliver that level of growth. But yes, we are following the principle of we must somehow get there and we are going to look at it like that, yes.

    — Aditya Malkani

  • Flares/Process Equipment Product Line Revenue Revenue · this year · High confidence INR20-30 crores
    The kind of business we want to go after is basically a product line type of business where we have orders and we can see profitability in those orders. That basically would be anywhere in the region of, like we discussed, a INR20 crores -INR30 crores product line.

    — Aditya Malkani

Profitability

  • EBITDA Margin Improvement Profitability · coming periods · High confidence 100-200 basis points
    So I think on a similar trajectory, you can see that happen, for another 100, 200 basis points going forward over the coming periods.

    — Aditya Malkani

  • Flares/Process Equipment Break-even Profitability · this year · High confidence Break-even
    And as I said, we are very clear we don't want to lose any money in that and we can make a little bit of money if we do this correctly. ... Yes, hopefully, yes.

    — Aditya Malkani

Capex

  • FY27 Capex Capex · FY27 · High confidence INR30-35 crores
    Our capex is generally in the region of approximately INR30 crores-INR35 crores for the coming year.

    — Aditya Malkani

  • Capex for next two years Capex · next two years · High confidence INR30-40 crores each year
    So we expect INR30 crores- INR35 crores, even it could stretch it out to INR40 maybe at the most over the next two years, each year.

    — Aditya Malkani

What to watch in Q1 FY27

EBITDA Margin Improvement

next few quarters
Current 12% (FY26 standalone)
Target 100-200 bps improvement

Why it matters

Tracking progress on margin expansion initiatives is key to profitability growth.

So I think on a similar trajectory, you can see that happen, for another 100, 200 basis points going forward over the coming periods.

Risks & concerns

  • Inflationary Impact

    medium

    Massive inflationary effect due to global and macro circumstances.

    Management acknowledged

  • Supply Chain Shocks

    medium

    Lack of clarity for planning purposes due to ongoing supply chain disruptions.

    Management acknowledged

  • Geopolitical Instability

    medium

    Potential for adverse events beyond company control, particularly in export markets.

    Management acknowledged

  • Income Tax Demand

    medium

    INR14 crore income tax demand currently under appeal, with management hopeful of a favorable outcome.

    Analyst acknowledged

  • BIS Hearings

    low

    Most BIS hearings are closed, but final resolution is pending magistrate court in June-July.

    Analyst acknowledged

Q&A highlights

7 direct
Flares Business Outlook and Profitability Direct
We made an announcement at the end of March, early part of April, that we were combining, realigning the entire division. So we no longer have a division called Flares and Process Equipment. ... That basically would be anywhere in the region of, like we discussed, a INR20 crores -INR30 crores product line. ... We don't want to lose any money in that and we can make a little bit of money if we do this correctly.

Clarifies the restructuring of a previously underperforming segment and sets a clear revenue and profitability target for its new form.

Asked by Rajat Joshi

Process Equipment Segment Losses Direct
The INR3 crores that you see in PE is basically a gain that has come because there was one of the reorders that came in from ONGC. So that is a gain, and accounting-wise we will have to take it in the same line item where we had taken the expense. ... No, it does not, because effective 31st March, I have taken many decisions that will not allow that to happen coming into this quarter.

Addresses analyst concern about recurring losses in the process equipment segment, clarifying a one-time gain and management's actions to prevent future losses.

Asked by Pritesh

Income Tax Demand and BIS Hearings Direct
So the BIS hearings, most of it is closed, but it still got to go back to magistrate court, which we have been given a date sometime in June-July. So that process is still going on and we are very hopeful that, that will end in a much more logical manner than where it is at the moment. On the income tax matter, I will ask Suryakant to give you an update on that. ... So income tax matter, we have filed our appeal last week only and we don't see any merit, means that the department will succeed in that. So we are hopeful it will come in our favor.

Provides an update on two significant regulatory/legal matters that could impact the company's financials and operations.

Asked by Ronit Kapoor

Acquisition Strategy Direct
Yes, we are, yes, we are open. We are open to acquisitions, but our acquisitions are a little more targeted now. ... it will be more dependent on technology necessarily than only market share related.

Outlines the company's strategic approach to M&A, indicating a focus on technology and capability rather than just market share expansion.

Asked by Ronit Kapoor

FY29 Turnover Target of INR2,000 crores Direct
We are still following the principle of doing that, but the main principle that drives that is to triple our earnings over that much period of time. ... yes, we are following the principle of we must somehow get there and we are going to look at it like that, yes.

Confirms the company's ambitious long-term revenue target, implying a significant CAGR, and highlights the underlying principle of tripling earnings.

Asked by Saloni

Shipbuilding Revenue Potential Partial
That is a very large number. I won't give you a number, but I will tell you that that is a very, very large number that you are talking of, very hard for I think most companies of our size to get that much just out of welding from shipbuilding. But it could incrementally add a bit.

Management acknowledges the potential of the shipbuilding sector but tempers analyst expectations regarding its immediate revenue contribution for a company of Ador's size.

Asked by Dhawan

New Product Introduction and Automation Strategy Direct
Most of it is locally made. ... The application will go anywhere there is automation happening. So heavy structural fabrication, oil and gas, stuff like that, anywhere there is automation happening, which is in many, many industries today. ... I think the potential is good for us.

Highlights the company's focus on local manufacturing for advanced welding technologies and identifies broad industry applications, indicating future growth drivers.

Asked by Jason

Miller Collaboration Impact Direct
Yes, from a high-end technology perspective, there are applications in select industries which require that, which we had product gaps on. ... And this is an opportunity that we have to take forward. And it is interesting and there is a lot of work left to see the benefits to it, but it is an interesting small start, yes.

Explains how the collaboration addresses product gaps in high-end technology applications, positioning it as a strategic move for future growth, albeit with work ahead.

Asked by Jason

2 min read 7 chapters

Detailed narrative

FY26 Performance Overview

Ador Welding concluded FY26 with standalone revenue increasing by 2% to INR1,135 crores. The company achieved a standalone EBITDA margin of 12% and gross margins of 38%, an improvement of 250 basis points. PBT for the year stood at INR130 crores, excluding the onerous cost of the Uran project, and Return on Capital Employed was approximately 23%. For Q4 FY26, revenue growth was about 3%, with EBITDA at INR38 crores and gross margin at 36%.

Strategic Focus and Global Footprint

Ador Welding identifies itself as a Tier 1 welding player with Indian roots and an expanding global footprint across approximately 15 countries. The company employs over 800 people and operates five manufacturing facilities. R&D remains a key investment area, recognized by the Government of India, contributing to continuous product innovation and market relevance.

New Product Introduction and Automation

The company is aggressively pursuing new product introductions and automation. Key initiatives include a partnership with Miller for submerged arc welding applications, strengthening its portfolio with 'Made in India' robotic lines, and developing nuclear-approved consumables. There's also a focus on high-end nickels and critical welding applications for the wind manufacturing industry, with faster product introductions and approvals in recent months.

Flares and Process Equipment Restructuring

The Flares and Process Equipment division has been restructured and combined into the main welding business, effective March 31, 2026. Management aims for this segment to operate as a product line generating INR20-30 crores in revenue, with a clear objective to achieve break-even or profitability. This move follows the completion of the Uran project, which had previously incurred onerous costs.

Market Outlook and Export Strategy

The company observes green shoots in sectors like shipbuilding, wind, and automotive, with thermal, oil, and gas also performing adequately. Exports, which were soft in the previous year, are expected to improve, driven by efforts in existing markets and potential from the Europe FTA. Saudi Arabia, previously the second-largest export market and currently the third, is expected to see significant business from project rejigs.

Capacity and Growth Targets

Ador Welding is currently operating at approximately 70% capacity utilization, with an industry potential of 90%. The company has an aspirational target to achieve INR2,000 crores in turnover by FY29, which implies a significant CAGR. This growth is expected to be driven by outperforming market volumes and values, supported by continuous product development and market expansion.

Capital Expenditure Plans

For the coming fiscal year (FY27), Ador Welding plans a capital expenditure of approximately INR30-35 crores. This investment is primarily directed towards the welding segment, focusing on consumables and new production lines, rather than equipment. Over the next two years, annual capex is projected to be in the range of INR30-40 crores, with a long-term capex of INR100-150 crores envisioned for doubling volume.

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