Detailed Narrative
Q2 FY26 Financial Performance Overview
Elin Electronics reported robust financial performance in Q2 FY26, with operating revenue growing 23% YoY to ₹375 crores, up from ₹305 crores in the same period last year. Consolidated EBITDA saw an impressive 80% YoY increase to ₹20.4 crores, compared to ₹11.3 crores previously. This strong growth was attributed to higher efficiencies in operations and the benefits of operating leverage. Consolidated PAT also surged to ₹10.3 crores from ₹4.8 crores YoY, marking a 114.6% increase.
Segmental Performance and Diversification
The Home Appliance segment demonstrated significant growth, with revenue increasing from ₹83 crores to ₹140 crores YoY, driven by new product launches and customer acquisition. The fan business within the Lighting, Sands and Switch segment grew almost 100% YoY, primarily due to BLDC ceiling fans. The company is actively diversifying its customer base, adding four new customers in Lighting and expecting to add more. The FHP Motors segment revenue remained stable at ₹74 crores, with underlying growth supported by captive consumption for the Appliance business.
Guidance and Outlook for FY26 and Beyond
The initial FY26 revenue guidance of ₹1350 crores (15% growth over FY25) is now subject to a potential 3% impact due to the stalled US export business, which has been nil since August 2025. The EBITDA margin forecast for FY26 has been revised from 6-6.5% to 5.5-6% due to this export impact, as exports are significantly more profitable. The new Rewari plant, expected to be operational by March-April 2026, is projected to generate ₹140 crores in FY27 and ₹250 crores in FY28, with a steady-state revenue potential of ₹500-600 crores and an EBITDA margin of 7-7.5%.
Capital Expenditure and Liquidity Position
CapEx spend for H1 FY26 was ₹14.5 crores. The full-year FY26 CapEx is projected to be ₹100-110 crores, with ₹60-65 crores allocated to Phase 1 of the Rewari plant and ₹35-40 crores for existing businesses. The company maintains a strong liquidity position with net cash of ₹94 crores as of September 2025. Working capital days improved to net 53 days, with a stretched target to reduce it further to 45 days by December.
Bhiwadi Plant Progress and New Product Launches
The Bhiwadi facility is progressing, with approximately ₹20 crores in capital advances made. Three out of four planned products (OFR heaters, kitchen chimneys, OTG) are expected to be pre-approved for production from the Ghaziabad plant, ensuring a seamless transition. However, the launch of air coolers is experiencing a slight delay as the company awaits customer design and product approvals. Management is optimistic about adding customers for air coolers once approvals are secured.
Operational Challenges and Margin Impact
The quarter faced some operational anomalies, including elevated power costs of ₹50 lakh due to unseasonal rain, load shedding, and lower solar power generation. Additionally, ₹16 lakh was incurred in international air freight to accommodate increased demand from customers. Gross margins declined by approximately 4% QoQ, primarily due to a shift in sales mix, with the lower-margin components business contributing less to the overall turnover compared to Q1.