Exicom Tele-Sys.

Exicom Tele-Systems reported a consolidated revenue of ₹197 crores in Q3 FY25, marking a 28% sequential growth but a 25% year-on-year decline. The EV charging segment demonstrated strong performance with standalone revenue growing 38% YoY to ₹67 crores. Conversely, the critical power business experienced a significant standalone degrowth of approximately 60% YoY, contributing ₹80 crores to revenue. Year-to-date standalone revenue stood at ₹539 crores with margins at 29.5%, reflecting investments in manpower and R&D.

The company secured its largest-ever purchase orders in the critical power business, totaling ₹1,680 crores. These orders are for hybrid power systems, lithium-ion batteries, and maintenance contracts for over 10 years, serving 1,60,000 panchayats under the BharatNet program. While Q3 was sluggish for critical power, management anticipates strong growth in Q4 and the next three financial years, expecting less lumpiness due to the substantial order book. The overall telecom infrastructure industry is projected to grow at an 8-10% CAGR annually.

The EV charging segment showed robust growth, with consolidated revenue reaching ₹110 crores. Exicom acquired Tritium, a global DC charging company, in September 2024 through a bankruptcy process. Tritium contributed ₹44 crores to Q3 turnover and secured $13.7 million in orders. While Tritium currently impacts consolidated EBITDA and PAT due to required investments, management aims for it to achieve EBITDA breakeven by FY26 and positions Exicom to be a top-five global DC fast charger manufacturer by 2030. The company also launched an integrated DC fast charging technology with energy storage at Bharat Mobility 2025.

Construction of the new integrated manufacturing plant in Hyderabad is progressing well. This facility will produce power and electronics products, including battery manufacturing. The company expects trial production to commence in May 2025, slightly delayed from the initial April target. This plant is crucial for leveraging next-generation manufacturing techniques and achieving high quality standards with optimized operational costs, supporting future growth.

The domestic EV market is experiencing a surge in demand, supported by PM e-drive policies and new model launches from major OEMs. This is expected to create significant demand for fast charging infrastructure, with 22,000 fast chargers out of 72,000 subsidized chargers being for four-wheelers. However, the EV charging market is characterized by heightened competitive intensity, leading to margin squeeze. Exicom's strategy focuses on reliability, key customer retention, and increasing wallet share to navigate this 'Red Ocean' environment.

The company is actively working on optimizing costs to counter the impact of rupee depreciation and maintain margins. Strategies include aggressive COGS reduction, increased localization efforts, and exploring hedging options for dollar pricing. Investments in manpower and R&D, along with interest costs from loans for the Tritium acquisition, have contributed to lower EBITDA and PAT. Management expects standalone profitability in Q4 FY25 and overall good results in the next two financial years.