HVAX Technolog. — Q2 FY26 earnings call

Call held 20 Nov 2025

Management summary

HVAX Technologies reported strong financial performance for H1 FY26 with significant growth in income, EBITDA, and net profit, driven by solid execution and a healthy order book. The company is strategically expanding into the healthcare infrastructure segment via the proposed acquisition of Krew Instruments, aiming to unlock synergies and diversify its offerings. While margins saw some compression due to project mix and increased marketing spend, management remains optimistic about future margin recovery and growth, identifying human resources as the main challenge.

Highlights

  • Total income grew 35% YoY to ₹62.79 crores in H1 FY26.

  • EBITDA increased 19% YoY to ₹8.53 crores in H1 FY26.

  • Net profit rose 29% YoY to ₹4.94 crores in H1 FY26.

  • Robust order book of ₹350 crores and a healthy pipeline of ₹650 crores provide strong revenue visibility.

  • Proposed acquisition of Krew Instruments marks a strategic entry into the rapidly growing hospital industry, unlocking synergies and enhancing capabilities.

Concerns

  • EBITDA margins experienced compression in H1 FY26 due to fewer design-build projects and increased investment in sales and marketing.

  • Human resource availability is identified as the primary potential hindrance to future growth.

  • Competitive pressure is higher in the domestic market, leading to a focus on exports.

Key financials

  1. Total Income ₹62.79 Cr +35%YoY
  2. EBITDA ₹8.53 Cr +19%YoY
  3. Net Profit ₹4.94 Cr +29%YoY

What they filed

Q4 FY26: revenue up 29.9%, net profit up 28.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue29 77 46 85 61 +110%100 +30%
EBITDA3 10 7 12 6 +100%10 +0%
Net profit1 7 4 7 5 +400%9 +29%
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

₹350 Cr

as of 2025-11-20 quantified

Execution

executed maybe in a year or so or maybe a year or two

Composition

Mix 2 geographies
  • Export 75%
  • Domestic 25%

Share of order book by geography

Pipeline

other

Order pipeline of INR 650 crores

The order book is healthy, and the order pipeline shows strong potential for future conversions, with a significant portion already converted.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Debt disclosed
    So it depends. It depends, you know, what are the companies that come a long way. For example, as we are acquiring through, we are not looking to, you know, increase any debt or erase any money from the market, because this would be done. It's a small company.
  • M&A Krew Instruments Acquisition · Announced

    Entry into rapidly growing hospital industry, leveraging Krew Instruments' expertise to expand offerings, strengthen market position, drive synergies, strengthen recurring revenue, enhance eligibility for larger domestic and international tenders.

    Expected to create value for shareholders and contribute to HVAX's growth, despite Krew Instruments' relatively smaller size.

    A particularly important development this year has been our strategic movement towards the healthcare infrastructure segment. With our proposed acquisition of Krew, we are laying the foundation for a multiyear growth opportunity. This combination aligns perfectly with our long-term vision, integrating project execution strength with a portfolio of specialized hospital and lab equipment to deliver turnkey healthcare solutions.
  • Liquidity Liquidity disclosed The company experienced an increase in debtor base in the last financial year due to major billing in Feb and March, but expects this to ease in coming quarters, indicating improving cash flow.
    So, to answer that, the execution remains the same. So, the cash flow for the last financial year is closing, whereby we have seen that, you know, the debtor base has increased, was majorly because the major billing was done in the month of Feb and March, which we have already stated that this would ease out, you know, in coming quarters and years, this will ease out, and you'll be able to maintain that. So, it's got no relevance, that I can say, probably our execution has improved, and so has the cash flow.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 35-40%
    We are very much aligned. Yes, yes. We are very much aligned to achieve the figures, the margin that we have set. So we are very much aligned.

    — Nirbhaynarayan Singh

  • Revenue Growth Revenue · next couple of years · Medium confidence around 35%
    Yes. So the visibility that we have given, you know, in our last earnings calls as well, that we look to grow around 35% for next couple of years. And as we diversify into the other industry, as we acquire a few companies into the other industry, this can grow. But as of what we've given is probably we look to grow at around 35% for next couple of years.

    — Nirbhaynarayan Singh

Margin

  • EBITDA Margin Margin · future · Medium confidence upwards of last year's achievement
    Margins will be upwards of what we are achieving or what we've achieved even last year. So it will be upwards of it, but very difficult to give you an exact number.

    — Nirbhaynarayan Singh

  • Overall Margins Margin · for the year · High confidence in line with previous guidance
    Going for the year, we believe that we'll be able to attain the margins as we have said previously. So more or less, we'll be in line. Talking about the EBITDA level, you know, the compression there.

    — Nirbhaynarayan Singh

Order Book

  • Pipeline Conversion Ratio Order Book · over a period · Medium confidence 20-25%
    Over a period, we have seen like we are able to convert around 20% to 25% of the pipelines. So that is the half figure which we have evaluated also over a period.

    — Prayagdatt Mishra

Reporting

  • Quarterly Earnings Releases Reporting · within a couple of quarters · Medium confidence start within a couple of quarters
    We are exploring hugely and badly that we are able to give it as promised earlier. It will take some time, but we are very hopeful, you know, within a couple of quarters, you would be in a position to do that.

    — Nirbhaynarayan Singh

What to watch in Q3 FY26

EBITDA Margin Improvement

next quarter / for the year
Current 8.53 crores (19% YoY growth) with compression in H1
Target Upwards of last year's achievement, in line with previous guidance

Why it matters

Margin recovery is crucial for profitability, especially after H1 compression due to project mix and investments.

Going for the year, we believe that we'll be able to attain the margins as we have said previously. So more or less, we'll be in line.

Risks & concerns

  • Margin compression due to project mix and investment

    medium

    H1 FY26 EBITDA margins were compressed due to fewer design-build projects and aggressive investment in sales and marketing.

    Management acknowledged

  • Human resource as a growth hindrance

    medium

    The availability of skilled human resources is identified as the only significant challenge to the company's growth.

    Management acknowledged

  • Competitive pressure in domestic market

    low

    Competitive pressure is higher in the domestic market, leading the company to limit its domestic projects to 15-20% and focus on exports.

    Management acknowledged

Q&A highlights

5 direct
Size and nature of Krew Instruments acquisition Direct
So the company which we are acquiring, basically, that will help us to unlock a lot of synergies within our businesses. So it's not a, basically, manufacturing heavy business. What it will provide synergies primarily is a lot of customers need a lot of bespoke solutions, which are very pharma-centric, like whether they want to manufacture a drug or they want to come with a particular solution.

Clarifies the strategic value of the acquisition beyond just revenue, focusing on technical know-how, customer base, and synergy for turnkey solutions, despite the target's small size.

Asked by Agastya Dave

Reasons for margin pressure in H1 FY26 and future outlook Direct
So on the margin, see, what we do is, you know, in the H1, there were less of design-build projects. That means our consultancy income was comparatively less, you know, if you were to see. ... So there's been a lot of investment, we are really going aggressive. So that would be the primary reason that you would find the compression on the EBITDA side.

Explains the specific operational and strategic factors contributing to H1 margin compression, providing context for the reported financials and management's expectation for future recovery.

Asked by Agastya Dave

Conversion timeline for the ₹650 crores order pipeline Partial
Yes, so we already converted, you know, by the time when we have sent our last basically, we have already converted an order value of around INR35 crores-INR40 crores. So it is in progress. Yes. So as the time goes on, you know, this will automatically be getting converted.

Provides an initial conversion figure from the pipeline, indicating ongoing execution and future revenue realization, though a full timeline for the entire pipeline is not given.

Asked by Agastya Dave

Differentiation of HVAX from traditional EPC companies Direct
HVAX Technologies is the leading turnkey clean room integrator. Like, it's a specialized environment which is required for the hospital projects, specialized environment which is required for the pharmaceutical and the biosimilars. So, we design the project to give them the special environment.

Clarifies the company's niche as a specialized clean room integrator, distinguishing it from general EPC players and highlighting its value proposition in critical infrastructure.

Asked by Sunil Kateshiya

Margin profile of new segments (solar, semiconductor) compared to pharma/hospital Partial
But as far as our understanding, we find that, you know, it will be more or less as for the margins that we are drawing in today. However, we'll be sure about only after we execute a couple of projects. ... we know about hospital industry whereby the margins are good and probably a little better than pharma.

Indicates management's cautious but optimistic view on margins in new diversification areas, suggesting hospital projects could offer better margins than pharma, while solar/semiconductor margins are still being assessed.

Asked by Prasenjit Paul

Revenue mix of design-led work versus execution and its impact on margins Direct
It will be, what, about 5% to 10%? I don't know the number. ... Design-built project definitely has a better margin as compared to the only contracting project.

Highlights that design-led projects, which currently form a small portion of revenue, offer better margins, implying a strategic focus on increasing this mix for margin improvement.

Asked by Deepak Poddar

Capacity utilization and potential constraints for growth Direct
See, as said, you know, we are service providers, as we say, or as we term HVAX Technologies is a leading turnkey clean room integrator. So, in terms of capacity utilization, it is only our people. ... We don't see because the only challenge that we find in our growth is human resource.

Identifies human resources as the primary capacity constraint and growth bottleneck for the service-oriented business model, indicating a key area for future focus.

Asked by Aditi Roy

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

HVAX Technologies delivered a strong financial performance in H1 FY26, with total income reaching ₹62.79 crores, marking a 35% year-on-year growth. EBITDA for the period was ₹8.53 crores, an increase of 19% compared to ₹7.15 crores in H1 FY25. The company's net profit for H1 FY26 stood at ₹4.94 crores, reflecting a robust 29% year-on-year growth, demonstrating solid operational execution despite a dynamic environment.

Strategic Entry into Healthcare Infrastructure

A key development in H1 FY26 is HVAX's strategic move into the healthcare infrastructure segment through the proposed acquisition of Krew Instruments. This acquisition is expected to lay the foundation for multi-year growth by integrating project execution strength with specialized hospital and lab equipment, enabling turnkey healthcare solutions. Management emphasized that this move is not just about sector expansion but also about unlocking synergies, strengthening recurring revenue, and enhancing eligibility for larger domestic and international tenders.

Order Book and Pipeline Dynamics

The company maintains a healthy order book of ₹350 crores, complemented by an order pipeline of ₹650 crores, providing strong revenue visibility. Management indicated that the ₹350 crores order book is expected to be executed within one to two years. The conversion ratio for the pipeline is estimated at 20-25%. The order book composition is predominantly export-oriented, accounting for 75-80% of the total, and heavily concentrated in the pharmaceutical sector, representing 98-99%.

Margin Dynamics and Outlook

EBITDA margins in H1 FY26 experienced some compression, primarily attributed to a lower proportion of design-build projects and increased investment in sales and marketing activities. Design-built projects, which currently constitute 5-10% of the revenue mix, offer better margins compared to pure contracting projects. Management expects margins to improve and align with previous guidance for the full year, driven by a focus on higher-value engagements and project selectivity.

Diversification and Market Expansion

HVAX is actively pursuing diversification beyond its core pharmaceutical industry focus, exploring opportunities in hospitals, semiconductors, renewables, batteries, and chemicals. The acquisition of Krew Instruments is the first step in entering the hospital industry. The company's strategy involves cautious entry into new segments, with a strong emphasis on understanding margin profiles before scaling. Export markets are a key focus due to less competitive pressure and better margins compared to the domestic market.

Operational Focus and Growth Drivers

The company's growth strategy centers on disciplined execution, strengthening systems, and building capabilities to position HVAX as a trusted partner in mission-critical environments. Management reiterated a revenue growth guidance of around 35-40% for FY26 and the next couple of years. The primary challenge identified for future growth is human resource availability, for which the company is implementing initiatives like strategic partnerships with educational institutions and comprehensive training programs.

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