Eleganz Interior

Eleganz Interiors demonstrated a strong performance in H2 FY26, with revenue reaching INR 289.22 crores, marking a 44.17% year-over-year increase. The H2 net profit margin also improved to 6.8% from 5.6% in H2 FY25. For the full fiscal year 2026, the company reported a revenue of INR 400.22 crores, a modest 1.91% growth over FY25. The full-year EBITDA margin expanded slightly to 8.6% from 8.4% in FY25, with a net profit margin of 5.5%.

As of March 31, 2026, the unexecuted order book stands at INR 546 crores. Management anticipates executing approximately INR 377 crores from this existing order book in FY27. The current bid pipeline is valued at INR 2,600 crores, from which the company expects to convert INR 260 crores into orders within the next 3-4 months. Eleganz Interiors projects a minimum of 25% revenue growth for FY27, with H1 FY27 expected to contribute 20-25% year-over-year growth.

The company's working capital cycle increased to 89 days in FY26, up from 66 days in FY25. This rise was primarily attributed to strong sales of INR 173 crores booked in Q4 FY26, which led to a temporary increase in trade receivables. Consequently, cash flow from operations turned negative for the year. Management has committed to improving collection efficiency and aims to reduce the working capital cycle to a target range of 60-70 days in FY27.

Eleganz Interiors is strategically expanding its focus to data centers, having completed smaller projects and actively building capabilities for larger bids in this segment. The company is also integrating Artificial Intelligence (AI) into its design processes, which has already resulted in a 30% productivity boost for its 3D design team. Furthermore, land has been acquired in Khopoli for a new automated factory, which is expected to enhance quality, reduce on-site workload, and support larger projects, potentially improving PAT margins by 0.2-0.3%.

The company maintains a lean financial structure, reporting a net debt-to-equity ratio of 0.11 in FY26 and stating that it currently has no debt from banks. IPO funds are strategically parked in an FD/OD facility to support operations. Eleganz Interiors does not currently pay dividends, with retained earnings being considered for future CapEx, such as the new factory, or potential acquisitions aimed at enhancing MEP capabilities for data center projects.

Eleganz Interiors is actively pursuing international expansion. In Singapore, the company has restarted operations independently after a joint venture partner exit and is in the process of hiring a general manager. In the UAE, despite geopolitical challenges, the company has an active bid pipeline of 30 million dirhams, focusing on projects for international firms and operating with a lean virtual office model to minimize overheads.

While the company achieved an 8.6% EBITDA margin in FY26, its net profit margin stood at 5.5%. Analysts raised concerns that these PAT margins are relatively low and may impact valuation. Management acknowledged this feedback and expressed a commitment to improving PAT margins. Strategies include backward integration, process improvements, and leveraging strong client relationships to pass on raw material cost escalations, aiming for a gradual increase in profitability.