Fabtech Technologies Q1 FY27 earnings call

Fabtech Technologies Limited delivered a resilient Q1 FY27, with consolidated revenue growing 10% year-on-year to ₹74.98 crores from ₹68.01 crores in Q1 FY26. The company achieved a significant turnaround, reporting a net profit of ₹4.21 crores compared to a net loss of ₹6.13 crores in the corresponding quarter last year. EBITDA recovered decisively to ₹7.41 crores, achieving a 9% margin, a substantial improvement from a negative EBITDA of ₹5.27 crores in Q1 FY26.

The company's contribution margin expanded significantly by 900 basis points, rising from 37.6% in Q1 FY26 to 46.7% in Q1 FY27. This improvement was primarily driven by a strategic shift towards higher-value markets and an optimized geographical mix. Finance costs also saw a substantial reduction, falling 36% year-on-year to ₹0.86 crores from ₹1.34 crores, attributed to more efficient working capital utilization and strategic deployment of IPO proceeds.

Fabtech's diversification strategy proved effective, with Saudi operations demonstrating stellar performance, growing 130% year-on-year to ₹17.14 crores. New markets such as Morocco and Kenya collectively contributed ₹27.94 crores, significantly boosting revenue. This broad-based growth helped absorb regional headwinds in the UAE FTS segment, with 78% of the company's revenue now originating from MENA, GCC, ECO, and the Persian Gulf.

As of June 30, 2026, the company's open order book stood at over ₹900 crores, providing strong revenue visibility. Total active inquiries exceeded ₹9,300 crores, with hot leads worth over ₹3,800 crores, indicating a robust pipeline for the next two years. New order intake in Q1 FY27 included a ₹31.23 crore veterinary vaccine manufacturing facility project in Botswana.

Fabtech expanded its Middle East presence by acquiring a 51% stake in Specialized Contracting Activities LLC in Saudi Arabia, enabling it to pursue MEP and civil infrastructure projects locally and engage earlier in the design cycle. Additionally, a proposed European acquisition is in the due diligence phase and is expected to be completed before the end of the current financial year, further strengthening local execution capabilities and market reach.

Management acknowledged that the prevailing geopolitical situation has delayed the finalization of certain large orders and slowed conversions in the UAE segment. While no orders have been cancelled, investor decision-making has been impacted by volatility, leading to some goods worth ₹20-22 crores being stuck at port. The company emphasized that its diversified portfolio helps absorb such regional weaknesses.

In response to analyst feedback, management is evaluating a shift from milestone-based accounting to a percentage completion method for new contracts, in consultation with auditors, to potentially smooth out profitability. The company also acknowledged concerns regarding its stock performance and committed to enhancing its IR/PR media coverage strategies to improve institutional participation and investor confidence, aiming to better communicate its long-term vision of exceeding ₹1,000 crores in top line by 2030.