Elin Electronics Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Elin Electronics reported a strong Q2 FY26 with operating revenue up 23% YoY to ₹375 crores and EBITDA up 80% YoY to ₹20.4 crores, driven by appliance and fan segments. However, gross margins saw a QoQ decline due to sales mix, and FY26 revenue guidance was slightly impacted by US export tariff issues. The company is progressing with its Bhiwadi plant and strategic diversification efforts.

Highlights

  • Operating revenue grew 23% YoY to ₹375 crores, driven by strong growth in appliance and fan businesses.

  • Consolidated EBITDA increased 80% YoY to ₹20.4 crores, reflecting robust revenue growth and higher operational efficiencies.

  • Consolidated PAT rose 114.6% YoY to ₹10.3 crores.

  • Net cash position remains strong at ₹94 crores as of September 2025, and working capital improved to net 53 days.

  • New product launches and customer acquisitions contributed to robust performance, with the fan business growing almost 100% YoY.

Concerns

  • Gross margin declined by approximately 4% QoQ due to changes in sales mix, with components business having a lower share.

  • Export revenue guidance for FY26 was impacted by up to 3% due to the US tariff situation, which has stalled business since August 2025.

  • Elevated power costs (₹50 lakh) due to unseasonal rain and load shedding, coupled with lower solar power generation, impacted profitability.

  • Incurred high international air freight costs (₹16 lakh) to meet increased customer demand, impacting margins.

  • Delay in the launch of air coolers from the Bhiwadi plant due to ongoing customer approval processes.

Key financials

  1. Operating Revenue ₹375 Cr +23%YoY
  2. EBITDA ₹20.4 Cr +80%YoY
  3. EBITDA Margin 5.4%
  4. PAT ₹10.3 Cr +114.6%YoY
  5. Net Cash ₹94 Cr
  6. Working Capital Days 53 days

What they filed

Q1 FY27: revenue up 14.1%, net profit down 322.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue237 225 244 241 280 +18%250 +11%245 +0%275 +14%
EBITDA8 8 16 16 17 +113%11 +38%5 −69%4 −75%
Net profit4 3 9 9 9 +125%4 +33%-1 −111%-20 −322%
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.

Segment breakdown

Share of Revenue
₹286.4 Cr Total
  • Home Appliance ₹140 Cr 48.9%
  • FHP Motors ₹74 Cr 25.8%
  • Lighting, Sands and Switch ₹72.4 Cr 25.3%

Capital allocation

high confidence
  • Capex ₹100 Cr
    • Phase one of new plant at Rewari ₹60 Cr
    • Growth of existing businesses and factories ₹35 Cr
    CapEx for the year will be INR. 100 to INR. 110 crores, split at INR. 60 to 65 crores for Phase one of the new plant at Rewari and INR. 35 Crores to 40 crores for growth of the existing businesses and factories.
  • Liquidity Cash ₹94 Cr Liquidity position remains strong with net cash of INR 94 crores as at September 2025.
    Our liquidity position remains strong with net cash of INR 94 crores as at September 2025.

Guidance & targets

Revenue

  • FY26 Revenue Growth Revenue · FY26 · High confidence 15%
    We had started off the year with a revenue guidance of INR 13.50 crores, representing a growth of 15% over FY 25.

    — Akash Sethia

  • FY26 Revenue Impact from Exports Revenue · FY26 · Medium confidence up to 3% reduction
    Given that there is possibility of this situation continuing for the next few months, revenue for the year may be impacted by up to 3% approximately.

    — Akash Sethia

EBITDA Margin

  • FY26 EBITDA Margin EBITDA Margin · FY26 · High confidence 6-6.5%
    EBITDA for the year was forecast at 6% to 6.5% margin.

    — Akash Sethia

  • FY26 EBITDA Margin Impact from Exports EBITDA Margin · FY26 · Medium confidence 5.5-6%

    Previously 6-6.5% → 5.5-6%

    Therefore, EBITDA margin could also be impacted and come in at about 5.5- 6% for full year FY 26.

    — Akash Sethia

Capex

  • FY26 Capex Capex · FY26 · High confidence INR 100-110 crores
    CapEx for the year will be INR. 100 to INR. 110 crores, split at INR. 60 to 65 crores for Phase one of the new plant at Rewari and INR. 35 Crores to 40 crores for growth of the existing businesses and factories.

    — Akash Sethia

Rewari Plant Revenue

  • Rewari Plant Revenue Rewari Plant Revenue · FY27 · High confidence INR 140 crores
    We expect revenues of around INR. 140 crores in FY 27 and INR. 250 crores in FY 28.

    — Akash Sethia

  • Rewari Plant Revenue Rewari Plant Revenue · FY28 · High confidence INR 250 crores

    — Akash Sethia

  • Rewari Plant Steady State Revenue Potential Rewari Plant Revenue · steady state · Medium confidence INR 500-600 crores
    Reiterating that as per current estimates, revenue potential of the plant is at around INR 500 to 600 crores.

    — Akash Sethia

Rewari Plant Profitability

  • Rewari Plant Steady State EBITDA Margin Rewari Plant Profitability · steady state · High confidence 7-7.5%
    Further, we expect a steady state EBITDA of 7-7.5% for this plant.

    — Akash Sethia

Rewari Plant Return on Capital Employed

  • Rewari Plant Steady State ROCE Rewari Plant Return on Capital Employed · steady state · High confidence 20%
    At these levels, our return on capital employed for the plants will be at around 20%.

    — Akash Sethia

Working Capital

  • Working Capital Days Working Capital · near term · Medium confidence 45 days

    From 53 days today

    So we're working very hard to get those, you know, days down to 45 Like we've mentioned, we would have hoped to do that by September or maximum December, but probably it might be delayed by a quarter or so.

    — Akash Sethia

What to watch in Q3 FY26

Resolution of US Tariff Situation for Exports

next quarter
Current Stalled since August 2025, impacting FY26 guidance
Target Resolution or clarity on tariff situation

Why it matters

Resolution of tariffs is critical for regaining lost export revenue and higher-margin business, impacting overall FY26 performance.

Given that there is possibility of this situation continuing for the next few months, revenue for the year may be impacted by up to 3% approximately.

Risks & concerns

  • US Tariff Situation Impact on Exports

    medium

    Uncertainty around US tariffs has stalled export business since August 2025, potentially impacting FY26 revenue by up to 3% and EBITDA margin by 0.5%.

    Management acknowledged

  • Elevated Power Costs

    low

    Unseasonal rain led to higher diesel consumption due to load shedding and lower solar power generation, resulting in an additional ₹50 lakh power cost.

    Management acknowledged

  • High International Air Freight Costs

    low

    Incurred ₹16 lakh in international air freight to meet increased customer demand, impacting margins.

    Management acknowledged

  • Delay in Bhiwadi Air Cooler Product Launch

    low

    The air cooler product launch from the Bhiwadi plant is delayed as the company is still in the process of getting design and product approved by the customer.

    Management acknowledged

Q&A highlights

8 direct
Gross margin decline QoQ Direct
Look, gross margin is a function not only of efficiencies in terms of sourcing, but also a function of the sales mix. So if you look at our current quarter, especially the components business, the components business is approximately, if I am not wrong, 20% of the total turnover, whereas in Q1, it was close to 24%, if I am not wrong.

Explains the 4% QoQ gross margin contraction as primarily due to a less profitable sales mix, specifically a lower share of the components business.

Asked by Kunal Mehta

FHP Motors segment utilization vs. third-party sales Direct
What is reported in terms of FHP motor sales, sales to third party, very honestly, that number is not so important for us as is the total utilization of the motor plant. So as long as adequate number of motors are being produced and they're utilized captively, we don't mind that because once you utilize that captively, there is a higher value add that you are capturing.

Clarifies that the flat FHP Motors revenue is not a concern as captive consumption for the appliance business is increasing, leading to better overall plant utilization and value addition.

Asked by Ananya Nichani

Diversification from key customers (Philips Group) and ODM share Direct
If you look at the number, maybe last year or in these 6 months, this number would be down to maybe about 43% approximately. And these are approximate numbers. It could be off by, you know, percentage points here or there. ... ODM share, this I'm talking only for the appliances segment. This would be approximately in the range of 25 odd % right now.

Provides quantitative insight into the company's strategic efforts to reduce reliance on a few large customers and increase its ODM share in the appliance segment.

Asked by Samarth Ashok

Appliance segment margin potential Direct
I don't think it is possible to do 10% EBITDA margin in appliances. It is very, very difficult. We have never really even spoken of these kinds of margins because at least at the scale that we operate at today, we do not think it is possible. What is possible is to maybe go to around 7 - 7.5% margins.

Sets realistic expectations for appliance segment profitability, indicating a target EBITDA margin of 7-7.5% rather than higher figures, which is crucial for long-term valuation.

Asked by Samarth Ashok

Impact of export business on FY26 guidance Direct
Given the uncertainty around the tariff situation for export of products to the USA, that business has been stalled and had zero since August 25. ... we've just mentioned that there could be up to a 3% impact in terms of revenue. ... exports are far more profitable in terms of margin than domestic sales. So the value addition or the EBITDA margins for a similar product in export versus a similar product in domestic, the margins are widely different. It's at least 4%, 5%, 6% higher in terms of value addition. So that's why the slight margin impact also.

Clarifies the specific revenue (3%) and margin (0.5% EBITDA) impact on FY26 guidance due to the stalled US export business, highlighting the higher profitability of exports.

Asked by Sahil Doshi

Bhiwadi facility capital deployed and product approvals Direct
So three out of our four products would already be preapproved for production from our Ghaziabad plant, and then there will be the infrastructure and some of the tooling's will be shifted to Diwali for actual commercial mass production. Now air coolers, you're correct. I mean in terms of this particular season for both air conditioners and coolers, there has been a little bit of a downer. It's been very flat. Currently, we are in the process of getting our design and product approved by the customer.

Provides an update on the Bhiwadi plant's readiness, indicating that most products are pre-approved, but air cooler launch is delayed due to customer approvals, impacting the ramp-up timeline.

Asked by Kunal Mehta

Impact of BIS implementation on motor categories Direct
In terms of, see, if you look at the fans, there's still there's a lot of local manufacturing happening. So according to me, this category is in case of in terms of motor, washing machine would be one with a fairly large market, which is totally more than 90% is imports. AC, IDU, ODU would be the other category where there's massive demand, but imports are very high.

Identifies washing machine motors and AC motors (IDU, ODU) as key categories where BIS implementation could significantly benefit local manufacturing due to high import dependence.

Asked by Kunal Mehta

Competitive intensity in small appliances and move to larger appliances Direct
If you see the movement, we've embarked on from small appliances then to medium appliances and our general strategy is if in terms of appliances, if a motor is required, we first get into motor manufacturing, if maybe some of the appliances are one or other types of motors and generally get into the product itself. ... I think the washing machine category or other larger appliances would probably be a natural progression for us.

Outlines the company's strategic progression from small to medium and eventually larger appliances, with motor manufacturing as a core competency, indicating future growth areas like washing machines.

Asked by Runit Kapoor

3 min read 6 chapters

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.

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