Indo Farm Equipment Limited — Q1 FY26 earnings call

Call held 21 Aug 2025

Management summary

Indo Farm Equipment reported a strong Q1 FY26 with revenue growing 31.23% YoY and EBITDA up 22.59% YoY, driven by robust performance in both crane and tractor segments. Despite a slight dip in EBITDA margin due to expansion-related costs, the company is aggressively expanding its crane manufacturing capacity with a new ₹70 crore plant and strengthening its dealer network. Management is guiding for 30-40% overall growth for FY26, while addressing challenges like a stretched working capital cycle and the impact of new emission norms.

Highlights

  • Revenue from operations grew 31.23% YoY to ₹91.25 crore (Q1 FY26 vs Q1 FY25).

  • Standalone EBITDA increased 22.59% YoY to ₹11.8 crore (Q1 FY26 vs Q1 FY25).

  • Crane revenue showed strong QoQ growth of ~36% to ₹53.04 crore.

  • Tractor revenue also grew ~24.6% QoQ to ₹38.20 crore.

  • New Crane project for 3,600 additional capacity is underway, with ₹70 crore investment planned for the new plant.

Concerns

  • EBITDA margin slightly reduced to 12.76% from 13.73% QoQ due to increased employee costs for business expansion.

  • Working capital cycle remains stretched due to extensive backward integration.

  • Ambiguity in reported PBT figures for Q1 FY26, making direct comparison difficult.

  • Potential temporary slowdown in tractor sales for 1-2 months due to new emission norms and associated price hikes.

Key financials

  1. Revenue from Operations ₹91.25 Cr +31.2%YoY
  2. Standalone EBITDA ₹11.8 Cr +22.6%YoY
  3. EBITDA Margin 12.8% -0.97%QoQ

What they filed

Q1 FY27: revenue up 15.0%, net profit up 10.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue81 91 125 91 99 +22%101 +11%129 +3%105 +15%
EBITDA10 12 16 10 11 +2%11 −11%17 +5%12 +16%
Net profit3 4 13 5 4 +31%5 +24%8 −38%5 +10%
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

Share of Revenue
₹91.24 Cr Total
  • Crane ₹53.04 Cr 58.1%
  • Tractor ₹38.2 Cr 41.9%

Order book

low confidence

Pipeline

other

20 LOIs taken for new dealers, expecting business from them next quarter.

Management mentions an order-driven business and past 'big orders' but does not quantify a current order book or inflow.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹70 Cr New plan — expansion of 3,600 additional crane capacity · Not explicitly stated, but implies internal accruals and IPO funds.
    • New plant and machinery for crane capacity expansion ₹70 Cr
    Pujan Shah: Yeah. So, my first question pertains to, as we have been expecting, we have already expanded our capacity from 1,200 to 3,600, so we'll expand in Q3 of 2025. So, first, thought, Mike, is that the... how much we have spent for the Capex and total amount, considering the first machine, the prototype, and all that stuff, how much, amount we are expecting to spend? R S Khadwalia: We are expecting, to... to spend everything, I think, the third... by third quarter. 70 crore, around 70 crore, it'll be... it'll be invested in the new plant. Plant and machinery only, because land is already acquired. Land is already helping us.
  • Debt Gross ₹165 Cr Cost 9%
    Kapil Ahuja: Yeah, what is the total debt that we are having right now, as of today? R S Khadwalia: A standalone basis? Around 100 CR. Kapil Ahuja: Okay. R S Khadwalia: ... consolidated basis, including the NBFC, 165. Around 165. Kapil Ahuja: Sir, on a standalone basis, what is the cost of the deck? For long-term and short-term borrowings. R S Khadwalia: Around 9%.

Guidance & targets

Revenue Growth

  • Overall Company Revenue Growth Revenue Growth · FY26 · Medium confidence 30-40%
    R S Khadwalia: Ma'am, we... this year, we are planning a tentative growth of sector 30-40%. It'll support us.

    — R S Khadwalia

Tractor Sales Growth

  • Tractor Sales Volume Growth Tractor Sales Growth · FY26 · Medium confidence 40%
    R S Khadwalia: 40% growth in Tractor.

    — R S Khadwalia

Crane Sales Volume

  • New Plant Crane Sales Volume Crane Sales Volume · First year of operation · Low confidence 200 numbers
    R S Khadwalia: ...maybe 200 numbers Cranes in the first year, and then gradually it'll grow.

    — R S Khadwalia

  • Crane Sales Volume Crane Sales Volume · FY26 · Medium confidence 1,500 units
    Muhammed Sufyan Lakdawala: So, for FY26, can we expect to sell around, like, in the crane, around 1,500 units, and FY27, around 3,000 units? For the crane? R S Khadwalia: Yes.

    — R S Khadwalia

  • Crane Sales Volume Crane Sales Volume · FY27 · Medium confidence 3,000 units
    Muhammed Sufyan Lakdawala: or FY27 with around 25 to 3,000? R S Khadwalia: 3,000 we are expecting.

    — R S Khadwalia

Crane Sales Revenue

  • Crane Sales Revenue Crane Sales Revenue · FY27 · Medium confidence 750-800 crores
    Chinmay Dhyani: FY27, the next year, because we have to do so large from the... from the new factory, so the next year should be 750 to 800 crores. R S Khadwalia: Next year, you can consider around 3,000 plus cranes.

    — R S Khadwalia

Capacity Utilization

  • Tractor Capacity Utilization Capacity Utilization · Next year (FY27) · Medium confidence 60%
    R S Khadwalia: ...the sale of Tetra also, 30-40% growth, which we are expecting, so I think this will go up to around 60% utilization. ... R S Khadwalia: 60% in next year, next... 26-27 financial year.

    — R S Khadwalia

Dealer Network

  • New Dealer Additions Dealer Network · FY26 · High confidence 80 new dealers
    Mr. Anshul Khadwalia: Sir, currently, we are operating with a mere 140 dealers, which is only covering almost 10% of the country, so we have a lot of area yet to cover. Sir, we are taking a target of adding 80 new strong dealers in this financial year.

    — Mr. Anshul Khadwalia

EBITDA Margin

  • EBITDA Margin Sustainability EBITDA Margin · FY26-27 · High confidence 13-14%
    Muhammed Sufyan Lakdawala: So, I'm asking, sir, is 13% margin sustainable? 13-14% margin sustainable for 26-27? I'm just.... R S Khadwalia: Yes, yes, sustainable. Sustainable. ... Yeah, it'll improve, it'll improve, and it'll definitely improve.

    — R S Khadwalia

Working Capital

  • Working Capital Days Working Capital · Not specified · Medium confidence 150 days
    Manan Shah: So, sir, internally, any sort of number of days ki subsequent target hai, hamara working capital side pe ki hum kahan pe aspire karte hain paunchana. R S Khadwalia: 150 level, planning. There's, yeah. speed, or rotation.

    — R S Khadwalia

What to watch in Q2 FY26

New Dealer Sales Contribution

Next quarter
Current 20 LOIs signed, business expected next quarter
Target Increased sales from new dealers

Why it matters

Key to expanding market presence and achieving overall growth targets.

Mr. Anshul Khadwalia: So, in the next quarter, we will probably see business from these 20 new dealers, sir.

Risks & concerns

  • EBITDA Margin Compression

    medium

    Slight reduction in EBITDA margin (12.76% vs 13.73% QoQ) due to increased employee costs and other expenses for business expansion.

    Management acknowledged

  • Stretched Working Capital Cycle

    medium

    Working capital cycle is stretched due to extensive backward integration and variety of products.

    Management acknowledged

  • Temporary Sales Slowdown due to Emission Norms

    low

    New emission norms leading to price hikes may cause 1-2 months of 'slowness' in tractor sales, but expected to be compensated by market expansion.

    Management acknowledged

Q&A highlights

6 direct
Unit sales data for Tractors and Cranes Direct
R S Khadwalia: ... This number of the last quarter. Director Number is, 600 numbers? 600 numbers. ... And the crane number is 273.

Provided specific unit sales data for key product segments, crucial for volume-based analysis.

Asked by Manan Shah

New dealer expansion strategy Direct
Mr. Anshul Khadwalia: Sir, we have taken almost 20 LOls, some of them are complete... So, in the next quarter, we will probably see business from these 20 new dealers, sir.

Clarified the progress and timeline for new dealer additions, indicating future sales growth drivers.

Asked by Manan Shah

Price hike due to new emission norms Direct
R S Khadwalia: Price, in some machine, it is around 2.5 lakh to 3 lakh, and in some machine, maybe 1 to 2 lakh.

Quantified the financial impact of regulatory changes on product pricing.

Asked by Manan Shah

Impact of external engine sourcing on gross margins Partial
R S Khadwalia: We don't feel like this, basically, because whatever price we have increased, we have increased on account of the increase of the price of our input cost. ... maybe 0.5% here and there, it will be there, but not major.

Addressed concerns about margin compression from new emission norms, indicating minimal impact.

Asked by Manan Shah

Capex for new crane capacity expansion Direct
R S Khadwalia: We are expecting, to... to spend everything, I think, the third... by third quarter. 70 crore, around 70 crore, it'll be... it'll be invested in the new plant. Plant and machinery only, because land is already acquired.

Provided specific investment figures and timeline for the significant crane capacity expansion.

Asked by Pujan Shah

Current crane capacity utilization Direct
R S Khadwalia: Like I said, we... we are utilizing almost... working on 100% capacity in our existing plant. For the crane production.

Highlighted the full utilization of existing crane capacity, justifying the need for new expansion.

Asked by Pujan Shah

FY26 revenue target and growth Partial
R S Khadwalia: You can, you can add on the 30-35% revenue, whatever we done the last year, please.

Provided a directional revenue target for FY26, implying a potential revenue of around ₹490-500 crore based on previous year's revenue.

Asked by Chinmay Dhyani

Sustainability and improvement of EBITDA margins Direct
Muhammed Sufyan Lakdawala: So, I'm asking, sir, is 13% margin sustainable? 13-14% margin sustainable for 26-27? I'm just.... R S Khadwalia: Yes, yes, sustainable. Sustainable. ... Yeah, it'll improve, it'll improve, and it'll definitely improve.

Confirmed margin sustainability and indicated future improvement, addressing concerns from current quarter's dip.

Asked by Muhammed Sufyan Lakdawala

2 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance

Indo Farm Equipment reported a strong Q1 FY26 with revenue from operations growing 31.23% YoY to ₹91.25 crore, up from ₹69.55 crore in Q1 FY25. Standalone EBITDA increased 22.59% YoY to ₹11.8 crore, compared to ₹9.63 crore in the prior year. However, the EBITDA margin saw a slight reduction to 12.76% from 13.73% in the previous quarter, primarily due to increased employee costs and other expenses associated with planned business expansion.

Segmental Revenue Growth

The Crane segment demonstrated robust growth, with revenue increasing approximately 36% QoQ to ₹53.04 crore from ₹38.89 crore in the last quarter. The Tractor segment, referred to as 'tactile revenue' in the transcript, also experienced significant growth of about 24.6% QoQ, rising to ₹38.20 crore from ₹30.64 crore. This indicates strong demand across both core product lines.

Crane Capacity Expansion and Capex

The company is aggressively expanding its crane manufacturing capacity with a new project aimed at adding 3,600 units. An investment of approximately ₹70 crore is planned for the new plant and machinery. Site preparation and retaining wall construction are currently in progress, with the new plant expected to be completed by December 2025 and trial production commencing in January 2026. This expansion is critical as the existing crane plant is operating at 100% capacity.

Dealer Network and Market Outreach

Indo Farm is focused on widening its geographical presence by expanding its dealer network. The company has issued 20 Letters of Intent (LOIs) for new dealers and anticipates business from them in the next quarter. The target for the current financial year is to add 80 new strong dealers, aiming to increase market coverage beyond the current 10% of the country. This initiative supports the planned 30-40% overall growth for FY26.

Impact of New Emission Norms

New emission norms have resulted in a price hike for tractors, ranging from ₹2.5-3 lakh for some machines and ₹1-2 lakh for others. Management expects a temporary 'slowness' in sales for 1-2 months due to these price increases and the rainy season. However, they do not foresee a major impact on gross margins, anticipating only a minor fluctuation of around 0.5%, as increased input costs are being passed on to customers.

Working Capital and Backward Integration

The company acknowledges that its working capital cycle is currently stretched, a consequence of its high degree of backward integration. Indo Farm manufactures many components in-house, including fabrication, hydraulics, and foundry parts. Management is actively planning to improve this, targeting a reduction in working capital days to 150.

Retail Financing and Debt Profile

To address past retail financing challenges and support dealer expansion, Indo Farm has established partnerships with HDFC and Kotak for financing. The company's standalone debt stands at approximately ₹100 crore, with consolidated debt (including its NBFC) at around ₹165 crore. The cost of debt for both long-term and short-term borrowings is approximately 9%.

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