Atlanta Electricals Limited — Q1 FY26 earnings call

Atlanta Electricals reported a robust Q1 FY26, with revenues increasing by 5.1% year-on-year to ₹315 crores, up from ₹300 crores in the prior corresponding period. This growth was attributed to steady execution and deliveries against a strong order book. The company achieved an EBITDA growth of 17.8%, with the EBITDA margin expanding to 15.5%. Profit After Tax (PAT) saw a significant increase of 25.3%, resulting in a PAT margin of 9.9%. This strong performance was driven by an improved product mix, higher capacity utilization, operating leverage, disciplined procurement, and timely pass-through of input cost movements.

The company has significantly expanded its manufacturing capabilities through the acquisition of BTW-Atlanta Transformers India Private Limited, now a wholly-owned subsidiary, and the operationalization of its Vadod Unit. These initiatives have scaled the total capacity to 63,060 MVA. The BTW acquisition strengthens the portfolio with proven EHV design and testing capabilities, enabling the company to deliver transformers up to 500 MVA, 765 kV. The Vadod unit is designed for transformers up to 400 kV. These new facilities are expected to contribute significantly to the top line from the second half of FY26, with existing units already operating at 100% utilization.

Atlanta Electricals holds a consolidated order book of ₹1,584 crores as of June 30th, providing strong execution visibility. The order book is diversified, with approximately 70% from utilities (PSUs) and 30% from private players. The kV class breakdown shows 17% from up to 66 kV, 23% from 132 kV, and 60% from 220 kV. Higher kV class orders (400 kV and 765 kV) typically have longer lead times of 18 months to two years, while lower kV classes range from four to twelve months. The company recently secured a ₹183 crore order for 400 kV class transformers from a private customer. Management noted a strong demand outlook for higher kV class transformers, with a national shortfall that Atlanta aims to address with its expanded capacity.

The company's diversified product portfolio spans six categories, including power, transformer, inverter duty, furnace, generator, and special duty transformers. This positions Atlanta Electricals to serve critical growth sectors such as utilities, renewables, and railways. The acquisition of BTW-Atlanta brings advanced technology for 765 kV class transformers and reactors, which was previously a technology tie-up with BTW China. Management emphasized that the industry is moving towards technology upgrades and higher kV classes, which helps avoid price wars by freeing up capacity in lower kV segments.

Atlanta Electricals utilized IPO proceeds to strengthen its balance sheet. The company repaid the Vadod term loan of ₹130 crores in full and is repaying ₹85 crores out of the ₹210 crores related to the BTW acquisition. This has reduced gross long-term debt to approximately ₹125 crores from an initial ₹330 crores. The prudent use of funds has lowered leverage, reduced finance costs, and improved access to working capital, reinforcing the company's financial position and supporting faster execution of large orders. The company's credit rating was upgraded to Crisil A stable and Crisil A1, reflecting the strength of its credit profile.

Management addressed concerns regarding raw material price volatility, particularly for copper. They stated that 70% of their business, primarily with utilities, includes price variation clauses, allowing them to pass on cost increases to customers and maintain margins. For components like bushings, where supply shortages exist, the company has robust procurement mechanisms in place and expects the situation to ease as more manufacturing facilities come online. Overall, management expressed confidence in the sustainability of current margins and the potential for further improvement as new facilities ramp up operations efficiently.