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FABTECH TECHNOLOGIES CLEANROOMS LIMITED — Q2 FY26 earnings call

Call held 17 Nov 2025

Company page: FABTECH TECHNOLOGIES CLEANROOMS share price, financials & guidance record

Management summary

Fabtech Technologies Cleanrooms Limited reported a challenging H1 FY26 with subdued standalone financials, as revenue and profit declined due to a strategic focus on reference creation and market penetration in new sectors. The company experienced margin compression and lost significant projects to competition. However, Fabtech demonstrated strong order inflow in the latter part of Q2, building a consolidated order book of 168 crores and a robust pipeline. With planned capacity expansions and a target of 30-40% revenue growth, management anticipates normalized margins and improved performance from FY27.

Highlights

  • Consolidated order book stands at 168 crores, with a balanced 50-50 mix between pharma and non-pharma.

  • Strong pipeline of 800 crores active leads, with 225 crores being 'very hot'.

  • Closed 110 crores worth of projects in the last 45 days of Q2 FY26, reflecting client confidence.

  • Kelvin subsidiary achieved 26 crore revenue and 1.62 crore PAT in H1 FY26, on track for 80 crore full-year revenue.

  • Capacity addition of 100-120 crores expected by Q1 FY27, tripling current capacity.

Concerns

  • FTCL stand-alone revenue declined to 50 crores in H1 FY26 from 57 crores last year.

  • FTCL stand-alone profit declined to 2.9 crores in H1 FY26 from 5.1 crores last year.

  • H1 FY26 margins were around 6.5% (excluding other income), down from 10-10.5% due to reference creation strategy and one-time expenses.

  • Lost 208 crores of business due to marginal price differences and an internal 'moonlighting problem'.

  • Altair subsidiary incurred a 70 lakh loss, impacting the consolidated balance sheet.

Key financials

2 periods

Headline

  • FTCL Standalone Revenue
    ₹50 Cr
    YoY -12.3%
  • FTCL Standalone Profit
    ₹2.9 Cr
    YoY -43.1%
  • One-time Exceptional Expenses
    ₹1.6 Cr

H1 FY26

  • EBITDA Margin
    6.5%
  • Kelvin Revenue
    ₹26 Cr
  • Kelvin PAT
    ₹1.62 Cr
  • Altair Loss
    ₹0.7 Cr

What they filed

Q4 FY26: revenue up 91.7%, net profit up 50.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue48 58 81 50 92 +92%
EBITDA6 7 8 3 9 +50%
Net profit4 5 7 3 6 +50%
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
₹76 Cr Total
  • Pharma (FTCL Standalone) ₹50 Cr 65.8%
  • Non-Pharma (Kelvin) ₹26 Cr 34.2%

Order book

high confidence

Total value

₹168 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹110 Cr

Execution

Pharma projects typically take 6-9 months, while non-pharma projects take 4-6 months.

Composition

Mix 2 segments
  • Pharma 50%
  • Non-Pharma 50%

Share of order book by segment

Pipeline

deal pipeline tcv

Strong active leads, with a significant portion being 'very hot'.

Cancellations & deferrals

  • lost to competition: Lost big-ticket projects due to marginal price differences.
The company is building a strong order book and pipeline, focusing on reference creation in new sectors, despite initial margin pressure.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹100 Cr
    • Capacity addition through 2 roll forming machines and 1 automatic panel assembly line
    • New manufacturing unit in Hyderabad
    Pre-empted and ordered 2 roll forming machines and one automatic panel assembly line. The two roll formers have come. The panel assembly line will come in the first quarter of next year... give us a capacity addition of about 100-120 crores... We are also putting up a unit in Hyderabad.
  • Debt Debt disclosed
    • New borrowing Sanction for enhancement of banking limits ₹15 Cr
    We currently have banking limits of ₹22 crore with our bankers, of which only a minimal portion has been utilized during the half-year ended 30th September 2025. In spite of that we have got the sanction from our banker for enhancement of limit of further 15 crores. We have got the sanction from the our current bankers. So, our limit is around 30 crore to 35 crore.
  • M&A Aart Integrated Projects Private Limited Investment · Integrated

    Brings solid technical acumen for solar and semi-con clean rooms.

    28% investment in Aart has proven extremely valuable.

    Our investment in Aart. 28% investment in Aart has proven extremely valuable.
  • M&A Kelvin Air Conditioning & Ventilation Systems Private Limited Investment · Integrated

    Brings HVAC systems integration and scale.

    We hold 51% in Kelvin. Offering all kinds of HVAC solutions.

    We hold 51% in Kelvin. Offering all kinds of HVAC solutions.
  • M&A Altair Investment · Integrated

    Factory for producing eco partitions.

    We hold 80% in Altair. Altair, unfortunately the results impacted the consolidated balance sheet.

    We hold 80% in Altair. Altair, unfortunately the results impacted the consolidated balance sheet.
  • M&A Advantek Investment · Integrated

    Manufacturing air handling units.

    We hold 26% manufacturers of air handling units.

    Advantek where we have 26% stake manufacturing air handling units.
  • Liquidity Undrawn ₹22 Cr Minimal portion of existing banking limits utilized; applied for 15 crore sanction.
    We have largely, the working capital unutilized, right, Sajjanji? Yes, working capital unutilized. We have pre-empted and applied for a 15-crore sanction.

Guidance & targets

Revenue

  • Revenue Growth Revenue · next two years · High confidence 30-40%
    OK. So, the first two years, 30 to 40% is the growth that we're targeting.

    — Aasif Khan

  • Revenue Growth Revenue · FY27 · High confidence 40%
    And FY27, 40% year on year you can take it. Uh, very safely.

    — Aasif Khan

  • Kelvin Full Year Revenue Revenue · FY26 · High confidence 80 crores
    It's on track for an 80 crore full year revenue achievement that we had envisaged and when we had budgeted, we had projected.

    — Aasif Khan

Order Book

  • Order Book Position Order Book · by March 2026 · High confidence 200-250 crores
    I think, we will be flowing in the next year with a very decent order position between 200 and 250 crores.

    — Aasif Khan

Profitability

  • PAT Margin Profitability · H2 FY26 · Medium confidence 7-8%
    The second-half, as I said we will be between honestly speaking 7 to 8% is this year, special margin that we are expecting and next to next year onward it should get normalized

    — Aasif Khan

Capacity

  • Capacity Addition Capacity · Q1 FY27 · High confidence 100-120 crores
    that should give us a give us a capacity addition of about 100-120 crores. First quarter of next year.

    — Aasif Khan

Market Share

  • Market Share in Cleanrooms Market Share · by 2030-31 · Medium confidence 20%
    we are increasing our stamina to take on at least at least 20% of this market which is unfolding.

    — Aasif Khan

What to watch in Q3 FY26

Kelvin PAT for stake increase

future
Current 1.62 crores (H1 FY26)
Target 7 crores PAT

Why it matters

Achievement of this target will trigger an increase in Fabtech's stake in Kelvin, indicating successful integration and value unlocking.

Yes, Kelvin has been given a target. The moment that touched 7 crore PAT. Yes, we will be triggering the next 51 to 76%.

Risks & concerns

  • Internal moonlighting problem

    medium

    A deep dive into project losses revealed a moonlighting problem, leading to employee terminations and tightened controls.

    Management acknowledged

  • Loss of big-ticket projects to competition

    medium

    Lost 208 crores of business due to marginal price differences, indicating intense competition.

    Management acknowledged

  • Underperformance of subsidiary (Altair)

    medium

    Altair's 70 lakh loss impacted the consolidated balance sheet, and its performance is slower than expected.

    Management acknowledged

  • Competition from Japanese and Chinese imports

    medium

    The company is competing with established Japanese and Chinese players, requiring strategic pricing and PLI qualification efforts.

    Management acknowledged

  • Delayed pharma projects due to tariff war

    low

    Some pharma projects were delayed due to ongoing tariff wars, impacting execution pace.

    Management acknowledged

  • Labour shortages

    low

    Faced issues with severe labour shortages, though management claims to have cracked the issue.

    Management acknowledged

Q&A highlights

8 direct
Margin decline and future outlook Direct
Well, this year, Deepak as I mentioned this is a reference creation year when you create a reference in a new industry the client draw their blood and where ready to give out blood were ready to give them the margin were ready to give the commercial calls to them.

Explains the strategic rationale behind current margin compression and sets expectations for future margin recovery post-reference creation.

Asked by Deepak Poddar

Growth CAGR for next 2-3 years Direct
OK. So, the first two years, 30 to 40% is the growth that we're targeting. After 27. Honestly, I would not be putting a ceiling at all.

Provides specific quantitative guidance on revenue growth targets for the near to medium term, indicating strong growth ambitions.

Asked by Deepak Poddar

Order pipeline, conversion, and execution timeline Direct
OK, so I'll just give you a little bit of correction here. We said 800 crores of hot leads with 225 crores which are in the final stages. #1. Now 225 crores the final stages that not necessarily mean we'll convert those to 225, but also at the same time the 800 would from hot turn to very hot. #2 We already have an order position of 160 crores.

Clarifies the distinction between pipeline and signed order book, and provides insight into conversion expectations and execution cycles for different project types.

Asked by Yash Visharia

Capacity utilization and planned additions Direct
Current capacity utilization is around 60 percent, 60%. Now there are people over here to answer this, but since I'm going with the flow, I'm taking this question. Yeah, so 60%, but we have added as I mentioned, we have added two roll forming lines... give us a capacity addition of about 100-120 crores. First quarter of next year.

Details current operational efficiency and significant planned capacity expansion, which is crucial for supporting future growth targets.

Asked by Deepak Poddar

Cost advantage against Chinese/Japanese competitors Direct
Well, that's exactly the reason, ma'am, why we said we'll take the margin hit because we want to show the industry that we can deliver with a manufacturing facility, we can deliver what they really want. With the certification in place, we can deliver what they want.

Addresses a key competitive concern in the capital goods sector, highlighting the company's strategy of demonstrating capability and quality over pure price competition, and efforts for PLI qualification.

Asked by Ruchi Shethia

Market opportunity and capacity to capture it Direct
When you talk of capacities, we have a capacity, let's say in the factory of about 400 crores. OK, now 400 crores can give us at least about 1200 crores of HVAC. Right. If that answers your question, if I'm doing justice to your question.

Quantifies the company's current and potential capacity in relation to the large market opportunity, indicating scalability.

Asked by Ruchi Shethia

Increase in stake in Kelvin Direct
Yes, Kelvin has been given a target. The moment that touched 7 crore PAT. Yes, we will be triggering the next 51 to 76%.

Provides a clear, quantifiable trigger for a future M&A action, indicating management's strategy for consolidating successful subsidiaries.

Asked by Yash Visharia

Trade receivables management Direct
So, this year your trade receivables could go up a bit as we said. Yes, you are absolutely right that the rate is on the higher side for March 25, it was 53 and currently it has increased to 65 crore... but our target is to reduce the trade receivable by the year end. Within three months of our total turnover, we are working very hard for collection side

Highlights a deterioration in working capital (receivables) but also management's explicit target and efforts to improve it by year-end.

2 min read 6 chapters

Detailed narrative

Strategic Inflection Year and Reference Creation

Fabtech Technologies Cleanrooms Limited designated H1 FY26 as an 'inflection year,' prioritizing growth and reference creation across new sectors such as solar, data centers, and semi-cons. This strategic shift involved making business decisions over short-term commercial gains, resulting in a temporary margin compression to 6.5% from the previous 10-10.5%. Despite this, the company successfully closed 110 crores worth of projects in the last 45 days of Q2, signaling growing client confidence in its capabilities.

Robust Order Book and Pipeline Visibility

The company's consolidated order book stands at 168 crores, evenly split with a 50-50 mix between pharma and non-pharma segments. Fabtech also boasts a strong pipeline of 800 crores in active leads, with 225 crores identified as 'very hot' and nearing final stages. Management projects an order book of 200-250 crores by March 2026, with execution timelines for projects ranging from 4-6 months for non-pharma and 6-9 months for pharma.

Significant Capacity Expansion Initiatives

To support its ambitious growth targets, Fabtech is undertaking substantial capacity expansion, aiming to add 100-120 crores in capacity by Q1 FY27. This includes the procurement and installation of two new roll forming machines and an automatic panel assembly line. Additionally, the company is establishing a new manufacturing unit in Hyderabad, which will further enhance its production capabilities. Current capacity utilization is reported at approximately 60%.

Subsidiary Performance and Strategic Investments

Kelvin, a key subsidiary, contributed 26 crores in revenue and 1.62 crores in PAT during H1 FY26, and is on track to achieve an 80 crore full-year revenue for FY26. Fabtech's 28% investment in Aart has proven valuable for technical expertise in solar and semi-con cleanrooms. While Advantek (26% stake) and Altair (80% stake) are progressing slower than expected, with Altair incurring a 70 lakh loss, management plans to increase its stake in Kelvin from 51% to 76% once Kelvin achieves a PAT of 7 crores.

Market Penetration and Competitive Strategy

Fabtech is aggressively expanding into non-pharma sectors, securing significant projects in solar (e.g., Sangam Solar, Gopin Solar), data centers (Nextra, NSE), and electronics. The company is developing import-substitute T-grids, securing a 20 crore order for a solar company, and is actively pursuing PLI qualification with government ministries to enhance its competitive position against Japanese and Chinese imports. This strategy aims to leverage local manufacturing and execution capabilities.

Working Capital and Liquidity Management

The company maintains banking limits of ₹22 crore, with minimal utilization, and has secured an additional ₹15 crore sanction, bringing total limits to ₹30-35 crore. While consolidated trade receivables increased from 53 crores in March 2025 to 65 crores in September 2025, management is committed to reducing this to within three months of total turnover by the year-end. This focus on working capital optimization is crucial for managing cash flow in long-cycle projects.

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