Elin Electronics Limited — Q4 FY25 earnings call

Call held 26 May 2025

Management summary

Elin Electronics reported a strong Q4 FY25, with significant revenue and EBITDA growth, driven by operational efficiencies and growth in Home Appliances and Fans. While FY25 EBITDA missed guidance, the company provided robust FY26 revenue and margin targets, emphasizing expansion into medium appliances and the new Bhiwadi plant. The impact of the Signify JV on the lighting segment remains a key area to monitor.

Highlights

  • Q4 FY25 Operating Revenue grew 14% YoY to INR315.7 crores, driven by strong operational efficiency and growth focus.

  • Consolidated EBITDA for Q4 FY25 was INR20.3 crores, a significant increase from INR12.4 crores last year, with adjusted EBITDA margin at 5.9%.

  • FY25 Revenue of INR1,180 crores met the guided range of INR1,165-1,200 crores.

  • The company achieved INR1.5 crores in savings in Q4 FY25 from operational efficiencies, targeting INR8-9 crores for FY26.

  • Net cash position remains strong at INR75 crores as of March 2025, with FY25 cash capex at INR40 crores, aligning with guidance.

Concerns

  • FY25 EBITDA of INR52 crores missed the guided range of INR60-65 crores.

  • The Signify JV is expected to result in a net revenue reduction of INR30-35 crores for the lighting business in FY26.

  • Working capital cycle remained at 52 days, slightly above the guided 45-50 days for FY25.

Key financials

2 periods

Q4 FY25

  • Operating Revenue
    ₹315.7 Cr
    YoY +14% QoQ +19%
  • Consolidated EBITDA
    ₹20.3 Cr
    YoY +63.7%
  • Adjusted EBITDA Margin
    5.9%
  • Consolidated PAT
    ₹17.2 Cr
    YoY +391%

FY25

  • Revenue
    ₹1,180 Cr
  • EBITDA
    ₹52 Cr
  • Working Capital Cycle
    52 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

  • Lighting, Fans and Switches
    ₹86.3 Cr Revenue (Q4 FY25)₹78.5 Cr Revenue (Q4 FY24)₹50 Cr LED Lighting Revenue (Q4 FY25)₹57 Cr LED Lighting Revenue (Q3 FY25)
  • Home Appliances
    ₹87.1 Cr Revenue (Q4 FY25)₹68.7 Cr Revenue (Q3 FY25)₹61.7 Cr Kitchen and Home Care Revenue (Q4 FY25)₹43.7 Cr Kitchen and Home Care Revenue (Q3 FY25)
  • FHP Motors
    ₹51 Cr Revenue (Q4 FY25)₹49 Cr Revenue (Q4 FY24)
  • Medium Appliances (Current)
    ₹65 Cr Revenue (FY25)₹70 Cr Revenue (FY25) Range

Capital allocation

high confidence
  • Capex ₹100 Cr largely funded only by internal accruals
    • Bhiwadi Phase 1 ₹60 Cr
    • Existing business and factories ₹40 Cr
    For the full year 2026, we believe revenue will be in the range of INR1,350 crores to INR1,400 crores, representing a growth of 15% to 18% over FY '25. EBITDA for the year is forecast at between 6% to 6.5%. capex for the year will likely be in a range of INR100 crores to INR125 crores. The split is INR60 crores approximately towards Phase 1 of the new plant at Bhiwadi and the balance for the existing business and factories. Once the new factory in Bhiwadi is stabilized in 2 years from starting, this will also help us drive up our ROCE since cash sitting idle on our balance sheet has been a drag on ROCE.
  • Debt Debt disclosed
    Even after this large round of capex, we do not expect to have any debt on our books. When I say debt, I mean long-term debt, working capital debt on a need basis, obviously, is actually present right now.
  • Liquidity Cash ₹75 Cr Our liquidity position remains strong with net cash of INR75 crores as at March 2025.
    Our liquidity position remains strong with net cash of INR75 crores as at March 2025.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 15-18%
    For the full year 2026, we believe revenue will be in the range of INR1,350 crores to INR1,400 crores, representing a growth of 15% to 18% over FY '25.

    — Akash Sethia

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 6-6.5%
    EBITDA for the year is forecast at between 6% to 6.5%.

    — Akash Sethia

  • EBITDA Margin Profitability · FY27 · High confidence 7-7.5%
    This is also in line with our goal for getting back to 7% to 7.5% EBITDA margin by financial year 2027.

    — Akash Sethia

Capex

  • Capex Spend Capex · FY26 · High confidence INR100-125 crores
    capex for the year will likely be in a range of INR100 crores to INR125 crores.

    — Akash Sethia

Working Capital

  • Working Capital Cycle Working Capital · Future · Medium confidence 40-45 days

    Previously 52 days → 40-45 days

    No, no, we are not talking of 35 days improvement. We are currently at 52 days. We are saying that we will do 40 to 45 days.

    — Akash Sethia

Bhiwadi Plant

  • Revenue Bhiwadi Plant · FY27 · High confidence INR140 crores
    We expect a revenue of INR140 crores in FY '27 and INR250 crores in FY '28.

    — Akash Sethia

  • Revenue Bhiwadi Plant · FY28 · High confidence INR250 crores

    — Akash Sethia

  • Full Revenue Potential Bhiwadi Plant · Long-term · High confidence INR550-600 crores
    The full revenue potential of the plant is between INR550 crores to INR600 crores.

    — Akash Sethia

  • Steady-state EBITDA Bhiwadi Plant · Long-term · High confidence 7-7.5%
    At a plant level, we expect a steady-state EBITDA of 7% to 7.5%.

    — Akash Sethia

What to watch in Q1 FY26

Signify JV Net Revenue Impact

next quarter
Current Estimated net reduction of INR30-35 crores for FY26
Target Clarification on actual impact and new customer additions

Why it matters

This JV could significantly impact the lighting segment's revenue, and management promised an update.

I don't think so. But like I said, it's still very, very early days. This was all done only late March, so it's not even 2 months. So maybe by next quarter we will be in a position to give you a better update.

Risks & concerns

  • Revenue reduction from Signify JV in lighting business

    medium

    The Signify JV with a competitor is estimated to cause a net revenue reduction of INR30-35 crores for FY26 in the lighting segment, though efforts are underway to neutralize this impact.

    Management acknowledged

  • Sustaining gross margin improvement

    low

    While Q4 FY25 saw gross margins near 27%, management noted that achieving a further 100bps improvement from this level would be tough, aiming for 100bps improvement from the historical 25% average.

    Management acknowledged

  • Seasonality and product mix impact on margins

    low

    Sales mix and seasonality can influence gross margin performance, making consistent quarter-on-quarter improvement challenging.

    Management acknowledged

Q&A highlights

7 direct
EBITDA Margin Guidance and Achievement Strategy Direct
The revenue guidance, like we said, is a growth of 15% to 18% in FY '26 that we expect over FY '25. This will largely be led by the Home Appliances segment, the Motor segment and the Fans segment, right? We've already mentioned that lighting we expect some sort of degrowth. This overall growth of 15% to 18% that I'm talking about is despite the reduction in the Lighting business.

Analyst sought clarity on how the ambitious FY26 EBITDA margin guidance would be achieved, given the mixed FY25 performance.

Asked by Darshil Pandya

Signify JV Impact and New Customer Strategy Direct
So now what we are saying is that this discussion is ongoing. It's at a fairly advanced stage, but no revenue is currently coming in from this. What we've estimated is that the total impact net of customer additions for this should not be more than INR30 crores to INR35 crores in reduction in lighting business for fiscal 2026.

Analyst probed the financial impact of the Signify JV and the company's strategy to onboard new customers to mitigate revenue loss.

Asked by Pratap

Product Portfolio Rationalization Direct
No, no. We are fairly confident. Look, home appliances have been very strong. Fans have been very strong. Motors, like we mentioned, optically it is not showing growth to you because this is captured this captures only third-party motor sales. What it does not capture is active consumption. So that is captured in the strong complete home appliance sales.

Analyst questioned if the company plans to reduce its product basket to focus on higher-growth segments, which management clarified is not the strategy.

Asked by Darshil Pandya

Medium Appliances Strategy and Revenue Contribution Direct
So, while we've already made some sort of headway in getting into medium appliances, but this will only scale up over the next couple of years. ... Should be -- if I talk of medium appliances currently being fans and OFRs, it should be in the range of INR65 crores to INR70 crores.

Analyst sought details on the new medium appliances segment, its current revenue contribution, and future scaling plans.

Asked by Pratap

Competition with China and Cost Advantage Direct
Yes. So see, the differential in India versus China first has to be looked at from an apple-to-apple perspective. So when you look at an Elin of India, you have to compare this with an Elin of China, point one. In China, there are all sorts of suppliers. There are small, medium, large, all kinds of suppliers, right? So one is you do an apple-to-apple comparison there.

Analyst questioned Elin's cost competitiveness against Chinese manufacturers, especially with potential trade agreements.

Asked by Niraj

Working Capital Cycle Improvement Sustainability Direct
Yes, right. Rightly said, we are we have not touched our inspirational figures of 45 days this time. But yes, we are on the right track. Looking to the overall expansion in the sales and the total inventory management, so we are on the right track, and we believe by H1 we'll be around touching the same target numbers as per the current operational efficiencies which we are delivering, so.

Analyst questioned the sustainability of working capital improvements, given past fluctuations, and sought clarity on the path to the 45-day target.

Asked by Sahil Doshi

Bhiwadi Plant Utilization and Total Revenue Potential Direct
Now Bhiwadi, obviously, we are saying that March '26 we will complete it. We've given you a fair idea that within 2 years we can see approximately 45%, 50% kind of revenue utilization being achieved.

Analyst sought clarification on the Bhiwadi plant's revenue potential and expected utilization rates over time, and its contribution to the overall company revenue.

Asked by Kunal Mehta

2 min read 6 chapters

Detailed narrative

Strong Q4 FY25 Performance and FY26 Outlook

Elin Electronics delivered a robust Q4 FY25, with operating revenue growing 14% YoY to INR315.7 crores and consolidated EBITDA reaching INR20.3 crores. The adjusted EBITDA margin stood at 5.9%. For the full year FY25, revenue was INR1,180 crores, aligning with guidance, though EBITDA of INR52 crores fell short of the INR60-65 crores target. The company projects strong growth for FY26, targeting revenue of INR1,350-1,400 crores (15-18% growth) and an EBITDA margin of 6-6.5%.

Strategic Shift Towards Medium Appliances and Higher Realizations

The company is strategically expanding its product portfolio to become a one-stop shop for high-value, high-volume home appliances. This includes new medium appliances like air fryers, air coolers, chimneys, and OTGs, which offer significantly higher realizations (INR2,100-5,000 per product) compared to current products (INR300-600). This shift is expected to drive higher and more predictable margins, with a goal of achieving 7-7.5% EBITDA margin by FY27.

Bhiwadi Plant as a Growth Catalyst

The new Bhiwadi plant is a cornerstone of future growth, expected to be operational by March 2026. It is projected to contribute INR140 crores in revenue in FY27 and INR250 crores in FY28, with a full revenue potential of INR550-600 crores. The plant is designed for a steady-state EBITDA margin of 7-7.5% and a ROCE of 20% pre-tax, focusing on medium-sized appliances.

Operational Efficiencies and Margin Expansion

Elin has implemented an operations excellence team, which generated INR1.5 crores in savings in Q4 FY25, translating to an annual run rate of INR6 crores. The company aims to increase these savings to INR8-9 crores for FY26. These efforts, combined with careful monitoring of expense line items and purchasing initiatives led by the new CEO, are expected to drive gross margin improvement from the FY25 average of 25% by 100 basis points.

Impact of Signify JV on Lighting Business

The lighting business faces a challenge due to Signify's JV with a competitor, which is estimated to reduce Elin's lighting revenue by INR45-50 crores in FY26. However, the company anticipates offsetting some of this loss by onboarding new customers who prefer not to work with competitors, leading to a net revenue reduction of INR30-35 crores for FY26. Elin aims to fully neutralize this impact over time.

Working Capital Management and Liquidity

The working capital cycle remained at 52 days in FY25, slightly above the guided 45-50 days. Management is focused on improving this to the 40-45 day range by H1 FY26 through enhanced inventory management and operational efficiencies. The company maintains a strong liquidity position with net cash of INR75 crores as of March 2025, and FY26 capex of INR100-125 crores will be largely funded by internal accruals without incurring long-term debt.

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