Detailed Narrative
Strong FY26 Performance and H2 Growth Momentum
Bhadora Industries reported robust financial performance for the full year FY26, with revenue from operations reaching INR124.93 crores and a PAT of INR9.96 crores. The second half of FY26 (H2 FY26) contributed significantly, with revenue of INR78.01 crores and PAT of INR6.38 crores, reflecting strong execution and healthy customer demand. This performance underscores the company's ability to deliver consistent results.
Robust Order Book and Future Revenue Visibility
The company's current manufacturing facility is fully booked through October '26, supported by an order book exceeding INR100 crores. This includes a landmark single order valued at over INR100 crores from a reputed multinational customer, enhancing long-term revenue visibility. Additionally, Bhadora has tenders in the pipeline worth close to INR500 crores, with an expected conversion of INR50-60 crores in the next few months, further strengthening its future order book.
Strategic Capacity Expansion and Product Diversification
The new manufacturing facility is approximately 80% complete and is slated to commence commercial production by October '26. This expansion will increase the company's capacity by three to four times, specifically from 200 tons/month to 600 tons/month for aluminium and 25 metric tons/month to 200 metric tons/month for copper. The new facility will enable diversification into MVCC, HT cables up to 33kV, instrumentation, and control cables, with a projected future product mix of 60% LT, 30% HT, and 10% control/instrumentation cables, offering 1.5-2% higher margins for HT cables.
Capital Expenditure and Funding Strategy
The total project investment for Phase 1 of the new facility is expected to exceed INR75 crores, with approximately INR40 crores already sanctioned as a term loan, alongside arranged working capital facilities. The company plans for two more phases: Phase 2 with a capex of INR75-80 crores, expected to start in mid-2027, and Phase 3 with a capex of INR150 crores. Debt is the primary funding choice for future phases, though a small equity raise might be considered if targets are achieved earlier.
EBITDA Margin Management and Outlook
EBITDA margins for H2 FY26 were around 13.5%, a decline from approximately 15.5% in the previous year, primarily due to fluctuations in raw material prices. However, 98% of the company's orders are on a price variation method, allowing for pass-through of cost increments. Management expects EBITDA margins to stabilize and range between 14% to 14.5% for FY27, driven by operational efficiencies and the introduction of higher-margin products from the new facility.
Positive Industry Tailwinds and Growth Drivers
The power and infrastructure sector continues to exhibit strong growth momentum, particularly in transmission, distribution, and renewable segments. Key drivers include the push for renewable energy, government infrastructure upgradation schemes like RDSS (with an outlay of INR1.5 lakh crores), smart cities, metro projects, industrialization, and urbanization. Bhadora anticipates sustained demand growth for cables over the next decade, positioning it well to capitalize on these opportunities.
Competitive Advantages and Organizational Strengthening
Bhadora differentiates itself through over 40 regulatory approvals, strong, long-standing relationships with large EPC contractors, and a strategically central location that offers cost advantages in transportation. The company is also strengthening its organizational capabilities across manufacturing, quality, technical services, business development, and institutional sales to support the smooth commissioning and scale-up of its expanded operations.