Kotia Enterprises Limited — Q3 FY26 earnings call

Call held 26 Mar 2026

Management summary

Kundan Edifice (KEL) is strategically pivoting towards high-margin, application-specific lighting segments like furniture and facade lighting, alongside developing indigenous GAN technology. The company is also venturing into the BESS industry, anticipating significant future growth. Management targets 30-35% revenue growth for the next fiscal year, supported by a planned ₹2-3 crore capex in Q1 FY27, and aims for mainboard migration by September 2026. While acknowledging cyclical demand and raw material volatility, the company is focused on operational efficiencies and market expansion.

Highlights

  • Company is diversifying into application-specific lighting (furniture, facade) which offers better margins.

  • Successfully developed indigenous GAN technology for compact and powerful power supplies, with client discussions underway.

  • Entered the Battery Energy Storage System (BESS) industry, a new and large market with significant future potential.

  • Targeting aggressive growth of 30-35% in revenue for the next financial year and double-digit growth for the coming year.

  • Planning mainboard migration, with eligibility expected by September 2026, signaling strategic growth and market positioning.

Concerns

  • No specific Q3 FY26 financial concerns were highlighted in the transcript.

  • Acknowledged cyclical demand in the lighting business, leading to lower utilization in certain quarters (Q1 and year-end).

  • Identified high inventory days and increased borrowings, though management is actively working on reduction strategies.

  • Raw material cost volatility due to dollar appreciation and crude price hikes remains a factor, though costs are passed on to customers.

What they filed

Q1 FY27: net profit up 200.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue0 0 0 0 0 −100%0 1 0
EBITDA-0 -0 -0 -0 -0 −45%-0 −50%1 +860%-0 +0%
Net profit0 0 -0 -0 -0 −375%-0 −1200%-2 −4340%0 +200%
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.

Capital allocation

medium confidence
  • Capex ₹2 Cr internal accruals
    • Capacity expansion to support 140-150 crores top line
    Maybe a CAPEX of another 2-3 crores would be required, but that we can... we can... Manage that. ... After another 2-3 crores of capex that we are looking to do, I think we should be able to go up to around 140, 150, within the range of 140, 150 as a top line.
  • Debt Debt disclosed
    The borrowings. See, we increase our borrowings because you're doing capexes also, and the idea would be to reduce those as well. We are already working on that. ... as we liquidate more of our... some of our inventory, we'll obviously... the idea would be to reduce the borrowings.

Guidance & targets

Revenue

  • Revenue Growth Revenue · next financial year · High confidence 30-35%
    And we still... we see that, okay, at least we would do around a 30-35% growth from... compared to this year.

    — Divyansh Gupta

  • Top Line after Capex Revenue · future · Medium confidence ₹140-150 crores
    After another 2-3 crores of capex that we are looking to do, I think we should be able to go up to around 140, 150, within the range of 140, 150 as a top line.

    — Divyansh Gupta

  • BESS Revenue Revenue · future · Medium confidence ₹30-50 crores per annum
    So that would roughly convert to around 30 to 50 crores per annum, and... but this is just a, a new space that we are getting into

    — Divyansh Gupta

Capacity

  • BESS Capacity Capacity · future · Medium confidence 30-50 megawatt
    We are intending to do... At, if nothing much, at least some 30 to 50 megawatt.

    — Divyansh Gupta

Other

  • Mainboard Migration Eligibility Other · September · High confidence eligible
    Yes, absolutely, the company is planning mainboard migration. We would be eligible... in September, because I think there's a 3-year clause, so by September, we will be eligible

    — Divyansh Gupta

Market context

  • Growth Percentage Revenue · coming year · High confidence double-digit
    in the coming year, we would look at a double-digit. growth percentage.

    — Divyansh Gupta

What to watch in Q4 FY26

Mainboard Migration Status

next quarter / by September
Current Planning in progress, eligible in September
Target Formal application/announcement of migration

Why it matters

Indicates company's strategic growth and market positioning.

Yes, absolutely, the company is planning mainboard migration. We would be eligible... in September, because I think there's a 3-year clause, so by September, we will be eligible

Risks & concerns

  • Raw material cost inflation due to dollar appreciation and crude price hikes

    medium

    Dollar prices and crude oil prices affect imports and material costs, but price increases are passed on to customers beyond a certain threshold.

    Management acknowledged

  • Increased competition from Chinese manufacturers due to loosened import restrictions

    medium

    Government measures like increased custom duties on finished goods and denial of BIS certification for new Chinese manufacturers mitigate this risk.

    Analyst acknowledged

  • High inventory days and increased borrowings

    medium

    High inventory is due to specific periods (Diwali, Chinese New Year) and past separate factory operations. Company is working to reduce inventory days and borrowings.

    Analyst acknowledged

  • Seasonal and cyclical demand patterns leading to lower utilization during certain quarters

    low

    Demand is lower in Q1 and year-end. Company plans to mitigate by exploring new territories, exports, and application-specific lighting.

    Management acknowledged

Q&A highlights

8 direct
Future growth plans and mainboard migration Direct
Yes, absolutely, the company is planning mainboard migration. We would be eligible... in September... as far as the growth strategy of the company is concerned, we are looking at good potential... in the coming year, we would look at a double-digit. growth percentage.

Confirms strategic move to mainboard and sets clear growth expectations for the coming year.

Asked by Mr. Rajsha

Client acquisition process and onboarding timeline Direct
The client acquisition process is, basically, we define that which are the areas that you want to get into... general time to acquire a client is generally 6-8 months.

Provides insight into the sales cycle and market entry strategy for new products/segments.

Asked by Ms. Naktia Goinka

Current capacity utilization and future expansion plans Direct
currently, I would say we are utilizing around 75% of our capacity. There is potential to utilize around 20-25% more capacity... we intend to do the CAPEX in April, to initiate the Capex in April mid... Maybe a CAPEX of another 2-3 crores would be required, but that we can... we can... Manage that.

Details current operational capacity and outlines specific capex plans to support future growth targets.

Asked by Mr. Pranaval

Impact of loosened import restrictions from China on business and margins Direct
the government is not giving BIS certification for the new product to Chinese manufacturers, which has, benefited, which will continue to benefit the Indian manufacturers... we always try to make sure that if there is a price benefit, we pass on to the customer. If there's a price escalation, that also we price on... pass on to the customer.

Explains how government policies and pricing strategy mitigate risks from Chinese competition and raw material volatility.

Asked by Mr. Pranav

GAN technology development and R&D depth compared to Chinese manufacturers Direct
we haven't acquired any technology, it's all indigenous technology. We have set up a R&D team, we invest in our R&D... we have started working on this since last 2 years... all the designs are indigenous, so it's not like whatever we supply is readily available somewhere with some manufacturer out there in China or Taiwan.

Highlights the company's commitment to indigenous R&D and differentiation from competitors relying on Chinese SKD/CKD.

Focus on waterproof lighting, its impact on margins, and scalability Direct
We see that this is a very niche space, because when you say facade lighting, or outdoor application, or architectural lighting, all of those kind of lights need to be waterproof... the costs are higher, the margins are higher... definitely, yes, the margins would... the top lines would also get better, and the margins would also get better.

Confirms the strategic shift towards higher-margin, specialized product categories.

Asked by Mr. Rudra

Clarity on BESS industry development and turnover expansion Direct
Currently, what we are trying to do with BESS is, we intend to get into assembly or manufacturing in future. That could be 2 years down the line, that could be 3 years down the line... We are intending to do... At, if nothing much, at least some 30 to 50 megawatt... So that would roughly convert to around 30 to 50 crores per annum

Provides initial quantitative targets and timeline for the new BESS venture, indicating its potential contribution.

Asked by Mr. Karun Kumar

Company's strategic shift and future focus Direct
when we got into the lighting business, we saw that Though... Lighting would... we chose to do these lights... now strip lights are being used in everybody's offices and houses... we are working on now application-based lightings, which very few companies are even thinking of.

Outlines the company's long-term vision of being an industry thought leader by focusing on emerging and application-based lighting solutions.

Asked by Mr. Ranesh Kwande

3 min read 7 chapters

Detailed narrative

Strategic Diversification into Application-Based Lighting

Kundan Edifice is strategically shifting its focus from generic lighting to application-specific products, particularly in furniture and fixture lighting. The company has successfully onboarded Hetich as a vendor for furniture lighting and is actively exploring other clients in this segment. This diversification aims to capitalize on the growing market for integrated lighting solutions in furniture, drawers, and wardrobes, which are expected to yield higher margins due to their customized nature.

Indigenous GAN Technology Development

The company has indigenously developed Gallium Nitride (GAN) technology for power supplies over the past two years, a process that involved building an in-house electronics development team. This technology enables the creation of more compact, powerful, and impactful products, meeting the market demand for sleeker designs. Kundan Edifice is currently in discussions with clients to launch these GAN-based products, initially targeting consumer-based lighting applications.

Entry into Facade Lighting and BESS Industry

Kundan Edifice is actively developing products for the facade lighting segment, recognizing its significant potential driven by government spending and infrastructure projects. Concurrently, the company has ventured into the Battery Energy Storage System (BESS) industry, a new and substantial market. While in its nascent stages, the company intends to move into assembly or manufacturing for BESS in the next 2-3 years, targeting a capacity of 30-50 megawatt, which could translate to ₹30-50 crores in annual revenue.

Operational Efficiency and Inventory Management

The company is focused on enhancing operational efficiency through the implementation of new software like SAP and HRMS, and by working towards Industry 4.0 integration to automate manufacturing processes and reduce labor dependency. Management acknowledged high inventory days and increased borrowings, attributing them to specific seasonal demand periods (e.g., Diwali, Chinese New Year) and past operational structures. Efforts are underway to optimize inventory and reduce borrowings.

Growth Outlook and Mainboard Migration

Kundan Edifice is targeting an aggressive 30-35% revenue growth for the next financial year, with an overall goal of achieving double-digit growth in the coming year. This growth is expected to be supported by a planned capital expenditure of ₹2-3 crores in Q1 FY27, which will be funded through internal accruals and is projected to help achieve a top line of ₹140-150 crores. The company is also preparing for mainboard migration, with eligibility anticipated by September 2026.

Raw Material Sourcing and Competitive Landscape

While core raw materials such as LED chips, flexible PCBs, and copper foils are primarily sourced from China and Taiwan, the company's indigenous design for GAN technology aims to reduce dependency on external suppliers. Management highlighted that government policies, including increased custom duties on finished goods and the denial of BIS certification for new Chinese manufacturers, provide a protective environment for Indian manufacturers. The company's strategy involves passing on raw material cost fluctuations to customers beyond a certain threshold.

Client Acquisition and Retention Strategy

The client acquisition process typically spans 6-8 months, involving initial R&D, product development, securing a proof-of-concept client, and then expanding to similar clients. The company maintains a strong client retention rate, with some customers having partnered since 2018-19. This high retention is attributed to the specialized and complex nature of their products, making it challenging for clients to switch vendors once manufacturing is established.

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