IKIO Tech — Q4 FY26 earnings call

Call held 4 May 2026

Management summary

IKIO Technologies Limited reported strong financial performance for Q4 FY26 and the full year, driven by robust revenue growth and margin expansion. The company is actively diversifying its business mix beyond traditional lighting, with other business segments showing significant growth and increased contribution. While global expansion continues, particularly in the Middle East, the US market faces headwinds due to geopolitical factors. The company is also enhancing manufacturing capacity and strategically shifting towards higher-margin ODM products in new segments.

Highlights

  • Q4 FY26 revenue increased 47% YoY and 14% QoQ to INR165 crores.

  • Q4 FY26 EBITDA stood at INR26 crores, with margins expanding to approximately 16%.

  • FY26 revenue stood at INR595 crores, reflecting a robust 23% YoY growth.

  • Other business contribution increased to 77% in Q4 FY26 from 66% in Q4 FY25, and to 71% in FY26 from 57% in FY25.

  • Acquired an 88% stake in Gravus Tech to strengthen go-to-market capabilities.

Concerns

  • Contribution of revenue from outside India decreased to 18% in FY26 from 50% in FY25, despite 53% growth in absolute terms.

  • Slowdown in the U.S. market amid tariff uncertainty and geopolitical issues impacting expansion momentum.

  • Working capital cycle experienced a 'slight hit' due to geopolitical events and increased lead times/inventories.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹165 Cr
    YoY +47% QoQ +14%
  • EBITDA
    ₹26 Cr
  • EBITDA Margin
    16%
  • PAT
    ₹18 Cr
    QoQ +63%
  • PAT Margin
    11%
  • Cash PAT
    ₹26 Cr
    QoQ +38%

FY26

  • Revenue
    ₹595 Cr
    YoY +23%
  • EBITDA
    ₹78 Cr
    YoY +29%
  • EBITDA Margin
    13%
  • PAT
    ₹42 Cr
    YoY +28%
  • PAT Margin
    7%
  • Cash PAT
    ₹72 Cr
    YoY +28%

What they filed

Q1 FY27: revenue up 15.9%, net profit up 37.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue58 45 38 39 49 −15%44 −2%38 −1%45 +16%
EBITDA5 4 1 2 4 −18%3 −33%2 +61%4 +136%
Net profit7 5 3 3 5 −26%4 −27%3 −9%5 +37%
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

SegmentContribution (Q4 FY26)Contribution (FY26)
Other Business (Non-Lighting)77%71%
Lighting Business23%29%

Capital allocation

high confidence
  • Capex ₹35 Cr IPO proceeds
    • Greenfield project for capacity expansion (5 lakh sq ft total, Block II by Q1 FY27)
    Third, to scale our manufacturing capabilities, we are enhancing capacity by approximately 5 lakh square feet through a greenfield project funded by IPO proceeds to support new age products, exports, backward integration, driving efficiencies and margins with Block I of 2 lakh square feet commercialized in May '24 and Block II, a similar size of expected to be commercialized by the end of Q1 FY '27. ... So if I talk of the CapEx first, then we are, I think, left with around -- from the IPO proceeds, somewhere around INR35 crores, INR36 crores of CapEx, which we intend to utilize in this financial year.
  • M&A Gravus Tech Acquisition · Closed

    Strengthen go-to-market capabilities, expand reach, enter niche high-end segment and export market.

    On the marketing and distribution front, we acquired an 88% stake in Gravus Tech to strengthen our go-to-market capabilities, leveraging experienced leadership to expand reach with minimal capital outlay.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · Medium confidence 20-22%
    So I mean, just to give you a rough idea in terms of the top line, what we are expecting is somewhere close to around 20% to 22% growth in FY '27 because like I said, the U.S. market has been sort of been slow because of the geopolitical issues. And so every day, something new sort of comes up in the news. So we are being cautious as of now.

    — Sanjeet Singh

Profitability

  • EBITDA Margin Profitability · FY27 · Medium confidence 15-16%
    Yes, around -- yes, same line, 15% to 16%.

    — Sanjeet Singh

  • Long-term EBITDA Margin Profitability · Long-term (next couple of years) · Low confidence 18-20%
    So it will take around 13%, 14%. So it will take some time to maybe another couple of years to so our target is also to reach around 18% to 20%.

    — Sanjeet Singh

Revenue Mix

  • Non-Lighting Revenue Contribution Revenue Mix · FY27 · Medium confidence 30-32%
    So like for next year, I can say maybe it may come to around from 25% to, let's say, 30%, 32%. That is because everything is growing simultaneously. So in proportion to previous year to the next year, the jump is going to be bigger compared to the 30% versus 70% what I'm referring to right now because each segment will continue to grow.

    — Sanjeet Singh

What to watch in Q1 FY27

Block II Capacity Commercialization

End of Q1 FY27
Current Expected by end of Q1 FY27
Target Commercial operations

Why it matters

This capacity expansion is crucial for supporting new age products, exports, and backward integration, driving future growth.

Block II, a similar size of expected to be commercialized by the end of Q1 FY '27.

Risks & concerns

  • Geopolitical Tensions and US Market Slowdown

    medium

    Slowdown in the U.S. market amid tariff uncertainty and geopolitical issues impacting expansion momentum, though customer acquisition is progressing.

    Management acknowledged

  • Raw Material Cost Inflation

    medium

    Rising prices of metals (aluminum, copper) are being managed through constant touch with customers to maintain gross margins and supply chain stability.

    Management acknowledged

  • Working Capital Impact from External Events

    medium

    Geopolitical events and supply chain disruptions have caused a 'slight hit' to the working capital cycle due to increased lead times and inventories.

    Management acknowledged

  • Dependency on Single Customer in Home Lighting

    medium

    The Home Lighting segment experienced a decline due to dependency on a single customer (Signify) and their joint venture, which the company is mitigating through diversification and new customer acquisition.

    Management acknowledged

Q&A highlights

7 direct
Headcount and Utilization Levels Partial
So right currently, the headcount, including the staff and labor, it is currently 2,500 plus, all factories put together. ... So currently, I mean, every time this question is put up, I always tell the people that it's very hard to comment on the utilization level on a console basis because we have multiple verticals, multiple product lines. ... So the mature units are working at good efficiency levels, close to around anywhere, if I have to give a number, vaguely around 70% plus. But the new ones are relatively lower in terms of the efficiencies.

Provides insight into the company's workforce growth and operational efficiency across its diverse and evolving business segments.

Asked by Ritesh Poladia

ODM Model and Diversification Strategy Direct
Yes, yes. We are now we are from ODM Lighting to we are going -- entering into ODM, Automobile Lighting. We are entering into ODM services for a company like Honeywell for their public address systems, their sensors, etc. ... So if you talk of our ODM capabilities, so not just the Home Lighting, that is ODM. Apart from Home Lighting, our Commercial Lighting, the Refrigeration Lighting and Electronics, Automotive Lighting, like Hardeep sir just mentioned, Hearable and Wearable segment. Most of it -- I mean, Hearable and Wearable when we started, it was all OEM to begin with, but now slowly and steadily, we are converting the products to ODM that was our strategy when we started Home Lighting also around 15 years back. So same strategy we are applying to this segment as well.

Clarifies the company's strategic shift towards a broader ODM model across multiple new verticals beyond traditional lighting.

Asked by Ritesh Poladia

Market Share and Single Source Supplier Status Direct
Like lighting, what we are doing right now, as an ODM partner, we are working with all the major brands in India. ... And when it comes to the other segments like refrigeration, electronics and the Commercial Lighting, so there whomsoever we are dealing with, either we are their largest supplier or in a lot of cases, we are also the single source as well.

Highlights IKIO's strong competitive position and deep customer relationships in its various segments, often as a primary or sole supplier.

Asked by Madhur Rathi

Lighting Revenue Decline and Diversification Rationale Direct
Actually, one thing I want to clarify, the downward trend that you see right now, that is only in the ODM Home Lighting, where the concern was for the single customer. ... But if you look at it today, there has been steady growth. The company is doing well in terms of the top line and also looking at the conditions geopolitically, whatever is happening, we are also now in that growth trend in terms of the EBITDA margin also. ... And as a result of that, even with the decline in this particular segment, our overall business has been growing steadily. And that was always the thought going forward to derisk dependency and add more and more business verticals customers.

Explains the specific reasons for the decline in the Home Lighting segment and reinforces the strategic importance of diversification to mitigate customer concentration risk.

Asked by Madhur Rathi

US Expansion and Geopolitical Impact Direct
U.S. expansion is right now the right time is there, and we are working very hard to come back with that, and you will see the results in next 2 or 3 quarters. ... But then everybody knows that every second day, something new used to come up in the news. And those disruptions were something that nobody had thought of that anticipated that this is going to happen. So that is why the momentum right now is slow. But at the same time, we are happy to say that we've made some very good advancements in terms of getting some very good customers on board.

Provides an update on the company's strategic US market entry, acknowledging the impact of external geopolitical factors while highlighting progress in customer acquisition.

Asked by Majid Ahamed

Non-Lighting Portfolio Contribution and Margins Direct
So currently, if the product -- I mean, the revenue mix is, let's say, approximately 75% to 20%, 25%. ... So like for next year, I can say maybe it may come to around from 25% to, let's say, 30%, 32%. ... So currently, around 60% of the products that we do in that category are OEM products, where the margins are relatively low. ... But going forward, our strategy is to add more and more ODM products, and that is where while utilizing our manufacturing capabilities, we'll be able to add more margins ... So I would say it is in higher single digits, but if I talk of the EBITDA margins. But going forward, our intention is to bring it to double digits.

Details the growth trajectory and margin improvement strategy for the new non-lighting segments, particularly Hearables/Wearables, as they transition from OEM to ODM.

Asked by Majid Ahamed

Working Capital Cycle and External Impacts Direct
So our working capital cycle is, if I have to give a generic statement is as per in line with our other businesses. So in terms of numbers, I can say that it is around 60 to 75 days. ... So working capital has been sort of got a slight hit because of whatever is happening geopolitically in first one entire year, I would say, in the U.S. market and now even in the Gulf because of the current war situation.

Offers transparency on the company's working capital management and acknowledges the impact of external geopolitical events on its efficiency.

Asked by Majid Ahamed

Comparison with EMS Players and Value Proposition Direct
So actually, I'll just simplify your answer. We are not a screwdriver company. We are providing the solution and the end-to-end black box product. We are not just assembling. That is for sure. ... Whereas in our case, that is, I would say, a trade-off that we were aware of from the very day we started all these verticals and business categories. That is because we like I said earlier, we don't want to do the products which or the EMS products which everybody else is doing. And I mean, it will be unfair for us to be compared to the EMS giants that you are talking of because their way of working, their business strategy is completely different to our business strategy and our way of working.

Distinguishes IKIO's integrated ODM model and value-added approach from traditional EMS providers, explaining its higher margin profile and different competitive strategy.

Asked by Madhur Rathi

2 min read 6 chapters

Detailed narrative

Strategic Diversification and Portfolio Expansion

IKIO is strategically transitioning from a lighting-centric business to an integrated technology solutions provider, expanding its portfolio to include Home and Commercial Lighting, Hearable and Wearables, Energy Solutions, Electronic Components, and Automotive Lighting. The 'other business' segment, which largely encompasses these new areas, demonstrated significant growth, with its contribution to total revenue increasing to 77% in Q4 FY26 from 66% in Q4 FY25. For the full year FY26, this segment's contribution rose to 71% from 57% in FY25, with revenues growing 53% YoY to INR426 crores.

Global Expansion and US Market Headwinds

The company is actively pursuing global expansion, having expanded its footprint to over 20 countries. Revenue from outside India grew by 53% to INR110 crores in FY26. However, the contribution of overseas revenue to total revenue decreased to 18% in FY26 from 50% in FY25. The US market, a key focus for expansion, is experiencing a slowdown due to geopolitical issues and tariff uncertainty, which has impacted the momentum of planned initiatives, though customer acquisition efforts are ongoing.

Capacity Enhancement and Greenfield Project Progress

To support its growth in new age products, exports, and backward integration, IKIO is significantly enhancing its manufacturing capacity. A greenfield project, funded by IPO proceeds, is adding approximately 5 lakh square feet of capacity. Block I (2 lakh sq ft) was commercialized in May '24, and Block II, of a similar size, is expected to be commercialized by the end of Q1 FY27. The company plans to utilize INR35-36 crores from IPO proceeds for CapEx in FY27.

ODM Business Model and Competitive Advantage

IKIO operates primarily on an Original Design Manufacturer (ODM) model, with 80-85% of its products falling under this category. This model allows the company to provide complete solutions, from design to manufacturing, rather than just products. This approach, combined with extensive backward integration capabilities (e.g., in-house plastic molds, tool room, metal fabrication), enables IKIO to offer higher value addition, achieve better margins, and maintain competitive pricing, even against international manufacturers.

Hearables & Wearables Segment Strategy and Margins

The Hearables and Wearables segment, a relatively new vertical, initially involved OEM products with relatively lower margins. The company's strategy is to transition this segment towards an ODM model to improve profitability. Management aims to achieve double-digit EBITDA margins in this segment by leveraging its manufacturing capabilities and increasing the proportion of ODM products, contributing to overall margin expansion.

Financial Performance and Margin Outlook

For Q4 FY26, IKIO reported revenue of INR165 crores, a 47% YoY increase, with EBITDA margins expanding to approximately 16%. For the full year FY26, revenue reached INR595 crores, up 23% YoY, and EBITDA stood at INR78 crores, a 29% YoY increase, with margins of 13%. The company expects FY27 revenue growth of 20-22% and aims to maintain EBITDA margins in the 15-16% range, with a long-term target of 18-20% as new verticals scale and operating efficiencies improve.

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