IZMO Limited — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

IZMO Limited reported a steady Q2 FY26 with revenue of INR 60.11 crores, up 2.65% YoY, and a significant 42.4% YoY increase in EBITDA to INR 13.51 crores, driven by cost optimization and growth in new divisions. The company achieved a breakthrough in silicon photonics packaging and received DSIR recognition, positioning it for future growth in AI infrastructure. While the legacy automotive business faced headwinds, the IzmoMicro division's order book doubled to INR 50 crores, with plans for substantial expansion and funding.

Highlights

  • Q2 FY26 Revenue of INR 60.11 crores, up 2.65% YoY, driven by expanding clientele.

  • Q2 FY26 EBITDA (excl. other income) surged 42.4% YoY to INR 13.51 crores, achieving a 22.5% margin.

  • H1 FY26 Revenue grew 9.8% YoY to INR 116.62 crores, with EBITDA up 23.4% YoY to INR 18.79 crores.

  • IzmoMicro order book doubled from INR 25 crores to INR 50 crores, with execution expected in nine months.

  • Achieved a breakthrough in 32-channel high-density silicon photonics packaging and received DSIR recognition for in-house R&D.

Concerns

  • Legacy automotive business growth was subdued due to global economic volatility and tariff issues.

  • IzmoMicro's planned expansion requires a substantial fundraise of INR 150-200 crores, with the fab project having a 2-3 year timeline.

  • Difficulty in quantifying future revenue from new photonics initiatives due to their early stage and dependence on execution.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹60.11 Cr
    YoY +2.6%
  • EBITDA (excl. other income)
    ₹13.51 Cr
    YoY +42.4%
  • PAT
    ₹12.56 Cr

H1

  • FY26 Revenue
    ₹116.62 Cr
    YoY +9.8%
  • FY26 EBITDA (excl. other income)
    ₹18.79 Cr
    YoY +23.4%
  • FY26 PAT
    ₹18.56 Cr

What they filed

Q1 FY27: revenue down 9.6%, net profit down 81.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue12 12 12 11 11 −7%11 −8%9 −29%10 −10%
EBITDA1 0 0 0 0 −91%0 +350%-2 −1629%0 −93%
Net profit24 0 0 0 0 −99%0 −80%-0 −311%0 −81%
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

₹50 Cr

as of 2025-09-30 quantified

100% QoQ

Inflow this quarter

₹25 Cr

Execution

next nine months

The IzmoMicro order book has doubled to INR 50 crores, with management noting large demand from international and domestic clients, pushing for ramp-up faster than envisaged.

Source: Q&A

Capital allocation

medium confidence
  • Capex ₹150 Cr Substantial amount from government, good state subsidy, very little investment from company side. Potential for 50% capex subsidy under ISM.
    • Advanced packaging facility for IzmoMicro ₹150 Cr
    • Silicon photonics fabrication unit (total project cost) ₹150 Cr
    And they are willing to fund a substantial amount from the center and then whichever state we select, they said we'll get very good subsidy from there. So the investment from our side is very little... I think for another 2 or 3 years, that will continue. Only then we'll start coming under full tax.

Guidance & targets

Revenue

  • IzmoMicro Revenue Revenue · next three years · Medium confidence INR 200 crores
    Like I said, in the next three years, revenue from that side should be equal to our legacy business on the izmo side.

    — Sanjay Soni

  • IzmoMicro Revenue (with new facility) Revenue · long-term after new facility · Medium confidence Up to INR 1,000 crores
    Yes, yes. With that facility, capacity, we can do up to INR1,000 crores.

    — Sanjay Soni

  • Legacy Business Revenue Growth Revenue · next year and following year · Medium confidence 10-15%
    I would expect a 10% to 15% steady growth at least for next year and maybe more in the following year once things get stabilized.

    — Sanjay Soni

Margin

  • IzmoMicro EBITDA Margin Margin · next year onwards · High confidence 25-30%
    And next year onwards, you will see a 30% to 40% gross margin and at least 25% EBITDA coming from there because the scale will increase.

    — Sanjay Soni

  • Overall EBITDA Margin Margin · FY26 · High confidence 20-25%
    I think between 20% to 25% we should achieve this year.

    — Sanjay Soni

Profitability

  • IzmoMicro Breakeven Profitability · this year (FY26) · High confidence Breakeven
    This year we will break even.

    — Sanjay Soni

What to watch in Q3 FY26

IzmoMicro Fab Project Report Submission & Government Approval

within 6-9 months
Current Project report being prepared
Target Project report submitted to government, initial approval process underway

Why it matters

This is the critical first step for securing government funding and subsidies for the large-scale photonics fabrication unit.

This will take around 2 to 3 years because it's a massive project. We have started working on the project report first, which will go to the government. They will take, I would say, 6 to 9 months to go through it.

Risks & concerns

  • Global economic volatility and tariff issues impacting automotive business

    medium

    Despite ongoing global economic volatility and evolving industry dynamics, we have maintained our growth trajectory... The market in the U.S. and Europe has been subdued overall because with so much of confusion created by tariffs and all that mess...

    Management acknowledged

  • Long lead times and complexity for silicon photonics fab project

    medium

    This will take around 2 to 3 years because it's a massive project... it's very important for us to do the right machine selection, which will keep us relevant up to 10 years.

    Management acknowledged

  • Execution risk for IzmoMicro expansion and revenue targets

    medium

    It literally hinges on execution end of the day. So that's why we have a good team... if we execute right, we should achieve those numbers in Izmo Micro.

    Management acknowledged

Q&A highlights

8 direct
US Market Opportunity & Investment Direct
No, we are actually targeting OEMs in the US market... We don't really need much of investment. It's more of leveraging what we already have.

Clarifies the strategy for US expansion, indicating organic growth focused on OEMs rather than significant new capital deployment.

Asked by Agastya Dave

Photonics Chip Fabrication Unit Investment & Timeline Direct
The fab initiative has actually been driven by the government... they are willing to fund a substantial amount from the center... this will take around 2 to 3 years because it's a massive project.

Reveals the strategic importance of government support and funding for the ambitious photonics fabrication project, along with a realistic timeline.

Asked by Agastya Dave

IzmoMicro Packaging Plant Capacity & Revenue Potential Direct
what we did was just set up a small plant to do a proof of concept. So now with sampling having been done, we are getting -- the demand is very large... So once that is in place, it can easily take us to INR1,000 crores revenue.

Quantifies the significant revenue potential of the IzmoMicro packaging business once the planned expansion is complete, driven by high demand.

Asked by Keshav

Talent Pool for Silicon Photonics Direct
We are doing a lot of in-house training... There is a lot of talent, which is one of India's biggest strength, especially in electronics. There is a lot of -- we are now training them in silicon photonics.

Addresses a critical operational aspect for a high-tech venture, confirming the company's strategy for talent development and leveraging India's engineering base.

Asked by Keshav

Employee Cost Reduction via AI Direct
So we are using AI tools now and replacing high-cost people. And it has we have -- it's a 1-year exercise... It will make us much more lean and much more profitable.

Explains the reason for reduced employee costs and outlines a strategic initiative to improve profitability through AI-driven automation.

Asked by Prashanjeet Paul

Legacy Automotive Business Outlook Direct
The market in the U.S. and Europe has been subdued overall because with so much of confusion created by tariffs and all that mess... I would expect a 10% to 15% steady growth at least for next year and maybe more in the following year once things get stabilized.

Provides a clear explanation for the subdued growth in the core business and offers a forward-looking growth expectation tied to external market conditions.

Asked by Paras Chheda

DSIR Recognition Impact Direct
I think so because we are getting a lot of inquiries coming in from most of the DPSUs after we received this that can we work on some projects for them? Can we develop some indigenize some of the imported parts...

Highlights the tangible benefit of the DSIR recognition in attracting new business opportunities, particularly from Defense Public Sector Undertakings (DPSUs), for indigenization efforts.

Asked by Pawan Kumar Kaushik

IzmoMicro Funding Strategy Direct
It will be through preferential we are still looking at options. Preferential, rights, we have not yet decided. So once we finalize the total quantum, then we'll look at what are the options. We are talking to various merchant bankers.

Details the ongoing process for raising the significant capital required for IzmoMicro's expansion, indicating that the funding structure is still being evaluated.

Asked by Pratik Srivastava

2 min read 7 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance

IZMO Limited reported Q2 FY26 revenue of INR 60.11 crores, a 2.65% YoY increase, driven by expanding clientele in the US and Europe. EBITDA (excluding other income) surged 42.4% YoY to INR 13.51 crores, with a margin of 22.5%. For H1 FY26, revenue grew 9.8% YoY to INR 116.62 crores, and EBITDA increased 23.4% YoY to INR 18.79 crores, achieving a 23.4% margin. PAT for Q2 was INR 12.56 crores (20.9% margin) and for H1 was INR 18.56 crores (15.92% margin).

Strategic Focus on IzmoMicro and Silicon Photonics

The company achieved a breakthrough in 32-channel high-density silicon photonics packaging, positioning India on the global semiconductor map. This division, IzmoMicro, is seen as a massive growth driver, targeting the $10 billion+ silicon photonics market by 2030. The order book for IzmoMicro has doubled from INR 25 crores to INR 50 crores, with execution expected within the next nine months.

IzmoMicro Expansion and Funding Plans

To meet the large demand, IZMO plans to raise INR 150-200 crores for an advanced packaging facility, with a potential to generate up to INR 1,000 crores in revenue from this segment in the long term. The company is also exploring setting up a silicon photonics fabrication unit, a 2-3 year project with an estimated cost of INR 150-200 crores, heavily supported by government funding and subsidies (up to 50% capex subsidy).

Legacy Automotive Business Performance and Outlook

The traditional automotive business (izmoStock, izmoAuto, FrogData) experienced subdued growth due to global economic volatility and tariff issues in the US and Europe. Despite this, izmoAuto acquired 22 new clients in Europe and is completing a major OEM contract for 900 dealer sites. Management expects a 10-15% steady growth for the legacy business in the next year once market conditions stabilize.

AI Integration and Cost Optimization

IZMO is actively using AI tools to automate processes and replace high-cost personnel, aiming for a leaner and more profitable operation. The company launched izmo.ai, an innovation hub for AI applications in the automotive industry, leveraging India's AI talent and cost advantage. This strategy contributed to the improved EBITDA margins observed in Q2 FY26.

DSIR Recognition and R&D Capabilities

The company received recognition from the Department of Scientific and Industrial Research (DSIR) for its in-house R&D unit. This recognition validates IZMO's leadership in advanced semiconductor packaging and research, spanning RF MEMs, power, and photonics packaging. It has also led to increased inquiries from Defense Public Sector Undertakings (DPSUs) for indigenization projects.

Talent Development for Advanced Technologies

Recognizing the specialized nature of silicon photonics, IZMO is investing in in-house training programs to develop the required talent. The company leverages India's strong talent pool in electronics and is training engineers specifically for silicon photonics, ensuring a skilled workforce for its advanced technology ventures.

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