IKIO Tech

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.

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.

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.

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.

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.

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.