Hind Rectifiers Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Hind Rectifiers delivered strong financial performance in Q2 and H1 FY26, marked by robust revenue and PAT growth, and improved margins and working capital efficiency. Key strategic initiatives included the completion of a backward integration project for specialized copper conductors and the acquisition of France-based BeLink Solutions to expand global footprint and R&D capabilities. While gross margins saw some contraction due to import issues, management expects recovery with the new integration, and maintains a positive outlook on order book growth and diversification.

Highlights

  • Q2 FY26 Revenue from operations grew 37% YoY to ₹227.1 crores.

  • H1 FY26 PAT grew 60.6% YoY to ₹27.5 crores, driven by improved operational efficiency and financial discipline.

  • EBITDA margin for H1 FY26 improved to 11.3% from 10.9% in H1 FY25.

  • Working capital days improved significantly from 96 days to 80 days in H1 FY26.

  • Strategic backward integration project completed, enhancing operational efficiency and reducing import dependence.

Concerns

  • Gross margins contracted in H1 FY26 from 28% to 25% due to copper conductor import and logistics issues.

  • BeLink Solutions, the newly acquired company, is not profitable and will require funding of EUR1.5 million annually for 3 years to cover losses.

  • Propulsion system trials faced initial delays due to Western Railway's inexperience, though now expected to start.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹227.1 Cr
    YoY +37%
  • EBITDA
    ₹25.9 Cr
    YoY +41.4%
  • PAT
    ₹14.7 Cr
    YoY +44.6%

H1 FY26

  • Revenue
    ₹441.9 Cr
    YoY +46.6%
  • EBITDA
    ₹50.1 Cr
  • EBITDA Margin
    11.3%
  • PAT
    ₹27.5 Cr
    YoY +60.6%
  • ROE
    31.4%
  • ROCE
    26.3%
  • Working Capital Days
    80 days

What they filed

Q1 FY27: revenue up 20.3%, net profit down 49.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue166 169 185 215 227 +37%277 +64%280 +51%258 +20%
EBITDA18 18 20 24 26 +41%26 +45%8 −58%13 −45%
Net profit10 10 10 13 15 +44%13 +27%-2 −116%7 −49%
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.

Order book

high confidence

Total value

₹1,099 Cr

as of 2025-09-30 quantified

Execution

Execution is a 12 month to 18 month window by which time we have to complete all the orders that we have on hand, particularly for the railway side.

Composition

  • Indian Railways (client type)

Pipeline

deal pipeline tcv

Huge tenders in pipeline from railways, with big tenders expected even in the next month.

Order book is currently good enough, with execution being faster than before, and strong pipeline for future orders.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹60 Cr Rs. 34 crores from term loan, balance from internal accruals.
    • Backward integration project at Sinnar Plant for specialized copper conductors ₹56 Cr
    Yes. FY '26, we can definitely give our numbers, it's maybe approximately Rs. 60 crores. ... Yes, it will be, it will be, I can say, we have taken term loan of Rs. 34 crores. Balance will be funded by internal accruals.
  • Debt Debt disclosed
    • New borrowing Term loan taken to fund part of FY26 capex. ₹34 Cr
    Yes, it will be, it will be, I can say, we have taken term loan of Rs. 34 crores. Balance will be funded by internal accruals.
  • M&A BeLink Solutions Acquisition · Closed

    Gives a strong foothold in Europe, combines advanced manufacturing with deep R&D expertise in robotics and power electronics, includes intellectual property and customer contracts, positioned for global scaling and innovation across mobility, energy, and industrial markets.

    Not profitable yet, will not be profitable for at least another several quarters. Company committed to fund EUR1.5 million every year for 3 years to cover losses.

    The second major development during the quarter was the strategic acquisition of BeLink Solutions. BeLink Solutions is a France-based company with almost four decades of experience in robotics, electronics manufacturing, and power electronics R&D. ... BeLink is doing roughly EUR10 million, they have EUR10 million worth of orders and sales will be around the same. It is not profitable yet, in fact it will not be profitable for at least another several quarters. It will take time for us to bring it to profitability, but there are certain products that we have, there is certain IP that we have, that we want to commercialize from there and that can be used for the global market which has big potential. ... Yes. So we have a commitment that we will fund about EUR1.5 million every year for 3 years.

Guidance & targets

Revenue

  • Revenue Growth Revenue · next 3 years · High confidence 30%
    And as committed previously, I am not changing that number, we have set 30% year-on-year and I will stick to that, and you can see the results and they will speak for themselves.

    — Suramya Nevatia

Order Book

  • Order Book Growth Order Book · by year-end · Medium confidence 30%
    So order book should we also assume 30% more for the year-end order book from current levels? Yes. I cannot say what will be at the end of the year, but definitely we will be getting the orders.

    — Anil Kumar Nemani

Profitability

  • Gross Margin Improvement Profitability · from Q4 onward · High confidence Return to previous levels
    Yes, yes. That should be the target that we have. I think from Q4 onward, yes.

    — Suramya Nevatia

What to watch in Q3 FY26

Propulsion System Trial Completion & Order Finalization

Sooner rather than later / next quarter
Current Trials starting, tenders participated but not finalized.
Target Trials completed (50,000 km), orders finalized from recent tenders.

Why it matters

Successful completion and order finalization will validate a new, significant revenue stream and diversification into defense/electronics.

But it is not going to affect our participation in tenders, there have been tenders this month we participated and we are sure to get orders from that. ... But once we get the orders from them, we will definitely inform the exchanges that we have received orders for the propulsion system.

Risks & concerns

  • Gross margin contraction due to raw material import issues

    medium

    H1 FY26 gross margins contracted from 28% to 25% due to shortages of copper conductors, leading to imports from South Korea/China and air freight, impacting costs.

    Management acknowledged

  • Unprofitability of newly acquired BeLink Solutions

    low

    BeLink Solutions is currently unprofitable and will remain so for several quarters, requiring EUR1.5 million funding per year for 3 years to cover losses.

    Management acknowledged

  • Delays in propulsion system trials

    low

    Propulsion system trials faced initial delays due to Western Railway's inexperience in conducting such trials, though clearances have now been received and trials are expected to start.

    Management acknowledged

Q&A highlights

7 direct
Diversification into Defense/Electronics Direct
Yes, primarily we are with railways. And as we have mentioned multiple times previously, we are diversifying into multiple different segments and defense is one of them.

Confirms the company's strategic intent to diversify beyond its core railway business into new high-growth sectors like defense.

Asked by Abhay Lodha

Total Capital Outlay for FY26 Direct
Yes. FY '26, we can definitely give our numbers, it's maybe approximately Rs. 60 crores. ... Yes, it will be, it will be, I can say, we have taken term loan of Rs. 34 crores. Balance will be funded by internal accruals.

Provides specific capex plans and funding strategy for the current fiscal year, indicating investment in growth initiatives.

Asked by Abhay Lodha

Order Book Growth and Execution Tenure Partial
Yes. Thank you. The order booking may seem to be flattish, but actually we are dispatching more than we were previously, and order book currently is at ~1,100, which is good enough for us at this stage. Execution is a 12 month to 18 month window by which time we have to complete all the orders that we have on hand, particularly for the railway side.

Clarifies that while the order book appears flat QoQ, execution velocity has increased, and the existing order book provides 12-18 months of revenue visibility.

Asked by Prolin Nandu

Market Opportunity for Specialized Copper Conductors (Backward Integration) Direct
So the copper industry or the CTC product that we have made, firstly, it is being done for in-house use. We have built significant capacity, at least in terms of space. Phase 1, the machines that we have put will cater to our needs. There is a huge requirement for this. Every transformer manufacturer needs these kind of copper conductors. There are more transformer guys than there are CTC people today. So there is a huge expectation. ... And yes, we will sell to other transformer guys, whether it's for traction or power or any other industry that's really irrelevant.

Highlights the large market potential for the newly indigenized copper conductors and the company's plan to sell to external customers, indicating a new revenue vertical.

Asked by Prolin Nandu

Propulsion System Trials and Order Expectations Direct
So propulsion trials have been underway, but not yet officially since we are doing it in Western Railway and they are doing it for the very first time. They have just given some clearances yesterday now, and once again, we need to get things sort of officially started. And it should happen sooner rather than later, we have that confidence. But it is not going to affect our participation in tenders, there have been tenders this month we participated and we are sure to get orders from that.

Provides an update on a critical new product line, explaining the reasons for delays and expressing confidence in securing orders from recent tenders, which is crucial for future growth.

Asked by Manish Goyal

BeLink Solutions Financials and Strategic Rationale Direct
BeLink is doing roughly EUR10 million, they have EUR10 million worth of orders and sales will be around the same. It is not profitable yet, in fact it will not be profitable for at least another several quarters. It will take time for us to bring it to profitability, but there are certain products that we have, there is certain IP that we have, that we want to commercialize from there and that can be used for the global market which has big potential. So that's one of the other reasons why we acquired that company. ... Yes. So we have a commitment that we will fund about EUR1.5 million every year for 3 years.

Clarifies the financial state of the acquired company (unprofitable, EUR10M revenue) and the strategic rationale behind the acquisition, including the funding commitment for its losses, which impacts consolidated financials.

Asked by Manish Goyal

Gross Margin Contraction in H1 FY26 Direct
No. It's actually not the pricing. It's basically we have had to because of the shortage of the copper conductors, we have had to import from South Korea, from China. And for certain cases, we have had to lift it by air and not by sea because of a lot of supply chain problems and logistics problems. It's primarily that which has attributed to the gross margins. And yes, the product mix has not been extremely favorable, but that contributing factor is not as much as the supply chain and logistics problems have been.

Explains the specific reasons for the H1 gross margin contraction (raw material import issues) and clarifies it was not due to pricing pressure or product mix, which is important for assessing the sustainability of margins.

Asked by Manan Shah

BeLink Solutions Revenue Decline and Cross-selling Strategy Direct
Okay. So yes, they were doing quite well. In fact, they were doing you said EUR30 million in 2021. Once upon a time, they were doing EUR300 million back in the day. And that's the kind of scale and infrastructure that they have built that they can do that much heavy lifting and that much revenue. The decline is because the automobile industry was declining, which is why they declined their sales. And then it declined further, because it was put in receivership, at which point customers stopped placing orders. ... The idea is to leverage the products that they have, like robotics, how we can improve our operations and improve our quality. ... And we have certain IP, which we would like to sell globally.

Provides historical context for BeLink's revenue decline and outlines the strategy to leverage its technology and IP for global sales, rather than just cross-selling existing products, indicating a broader strategic play.

Asked by Manan Shah

2 min read 6 chapters

Detailed narrative

Strong Q2 & H1 FY26 Financial Performance

Hind Rectifiers reported robust financial results for Q2 and H1 FY26. Q2 revenue from operations grew 37% YoY to ₹227.1 crores, with EBITDA increasing 41.4% to ₹25.9 crores and PAT up 44.6% to ₹14.7 crores. For H1 FY26, revenue reached ₹441.9 crores, a 46.6% YoY growth, and PAT surged 60.6% to ₹27.5 crores. The company also saw an improvement in EBITDA margin to 11.3% in H1 FY26 from 10.9% in H1 FY25, and working capital days improved significantly from 96 to 80 days.

Strategic Backward Integration Project Completed

A major milestone was the completion of the backward integration project at the Sinnar Plant, with commercial production of critical specialized copper conductors (CTC, EPICC, PICC) commencing. This initiative, involving an investment of approximately ₹56 crores, aims to enhance operational efficiency, streamline the supply chain, reduce dependence on external vendors, and avoid penalties from Indian Railways. It also establishes a new vertical focused on fast-moving copper conductors with strong export potential, catering to both internal needs and the broader transformer industry.

Acquisition of France-based BeLink Solutions

Hind Rectifiers strategically acquired BeLink Solutions, a France-based company with expertise in robotics, electronics manufacturing, and power electronics R&D. This acquisition provides a strong foothold in Europe, combining advanced manufacturing capabilities with deep R&D. BeLink currently has revenues of approximately EUR10 million but is not yet profitable, requiring a commitment of EUR1.5 million per year for three years to fund its losses. The acquisition is expected to scale globally and accelerate innovation across mobility, energy, and industrial markets, leveraging BeLink's intellectual property and technology.

Robust Order Book and Diversification Efforts

The company maintained a strong order book of ₹1,099 crores as of September 30, 2025, providing 12 to 18 months of revenue visibility, primarily supported by Indian Railways and leading OEM customers. Management noted that while the order book appears flat QoQ, execution momentum has increased. Hind Rectifiers is actively diversifying its business beyond railways into segments like defense and electronics, with the BeLink acquisition contributing to this strategy by expanding into new applications and geographies.

Propulsion System Trials Update

Trials for the propulsion system have been underway, though initial official commencement faced delays due to Western Railway's first-time experience with such trials. Clearances have now been received, and trials are expected to start soon. Management expressed confidence in securing orders from recent tenders for the propulsion system, which will make the company eligible for high-quantum locomotives like P7 and G9, following 50,000 kilometers of field trials and subsequent commercialization.

Gross Margin Dynamics and Outlook

Gross margins contracted from approximately 28% to 25% in H1 FY26. This was primarily attributed to shortages of copper conductors, necessitating imports from South Korea and China, often requiring costly air freight due to supply chain and logistics problems. Management expects this issue to be resolved with the commissioning of the in-house copper conductor facility, targeting a return to previous gross margin levels from Q4 FY26 onward.

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