Indo Farm Equip.

Indo Farm Equipment reported a Q4 FY26 revenue from operations of ₹128.58 crore, a 2.73% YoY increase, with EBITDA growing marginally by 0.57% YoY to ₹17.47 crore. For the full fiscal year 2026, turnover reached ₹419.54 crore, marking a 14.39% YoY growth, and EBITDA increased by 6.98% YoY to ₹53.50 crore. The tractor segment was a strong performer, growing 42.85% YoY in FY26 to ₹201.45 crore, while the crane segment saw a marginal YoY decline of 3% to ₹218.09 crore.

Management projects an overall revenue growth of 20-25% for FY27, with the tractor segment expected to grow 25-30% and the existing crane plant revenue targeted for 15-20% growth. This growth is underpinned by an expanded dealer network, which now totals over 225 dealers for tractors and 25+ for cranes, with 23 new tractor dealers added in Q4 FY26. The company aims to achieve an operating EBITDA margin of approximately 12.5% for FY27, acknowledging potential initial pressure from new product launches.

The new pick-and-carry crane project at the Bhud site is back on track, with commercial production anticipated to commence in Q2 FY27. Civil work and steel structure are nearing completion, and pre-engineered building work is expected by July 2026. For the tower crane segment, technology tie-ups and trials are complete, with commercial production also slated for Q2 FY27. The new tower crane facility will have an initial capacity of 240-250 machines per year, targeting 50-60% utilization in FY27 and 70-80% by FY29-30.

The tractor segment recorded 3,006 units sold in FY26, showing significant growth despite past challenges with retail financing and geopolitical issues impacting exports to markets like Nepal and Myanmar. The company's investment in its captive finance company and support from other financiers are expected to drive future growth. Management aims for a steady-state EBIT margin of around 10% for the tractor business, and 48 tractors valued at ₹6 crore were recently exported to a German company as a trial order.

The crane segment experienced a 9.67% YoY decline in Q4, primarily due to the transition from Term III to Term V emission norms, which led to increased costs not immediately passed on to customers. However, management expects to pass on these costs from Q1 FY27, leading to margin recovery. Initial orders for the new tower crane are in single digits, with deliveries starting in Q2, and 60-80 units are targeted for sale in the next six months. The company is confident in gaining market share due to its product quality and expanding reach.

The company's consolidated net cash flow decreased from ₹53 crore last year to approximately ₹30 crore this year, a point of concern raised by analysts. Management acknowledged that working capital days are currently around 300 and aims to bring this down to under 200 days in the future. This improvement is critical for freeing up cash and enhancing overall financial efficiency, as past backward integration and increased models led to higher inventory.