Parth Electricals & Engineering Limited — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

Parth Electricals & Engineering Limited reported a strong FY26 with 13% YoY revenue growth and significant margin expansion. The company secured a robust order book of INR 271.59 crores, driven by new EPC projects and international expansion. Strategic investments in new manufacturing facilities and a Skill Development Center are set to boost future revenue and capabilities, despite challenges from raw material volatility and delayed export projects.

Highlights

  • FY26 Revenue grew by 13% YoY to INR 196.62 crores, building on previous years' growth.

  • EBITDA margin expanded by 49 bps to 10.53% and PAT margin by 140 bps to 7.19% in FY26, indicating improved profitability.

  • Secured a strong order book of INR 271.59 crores, including key EPC projects for PGVCL (INR 85 crores) and Reliance Data Center (INR 45 crores).

  • New GIS factory and Odisha facility are projected to add INR 300 crores in revenue, with operationalization expected by September and October 2026 respectively.

  • Successful entry into new export markets like USA, Zambia, Bhutan, and Nepal, with FY26 export revenue of INR 31 crores and a target of 20-25% of total revenue going forward.

Concerns

  • An inventory pile-up of INR 40 crores and delayed sales of INR 25 crores in FY26 were attributed to geopolitical tensions affecting a US export project.

  • Raw material price volatility (steel, copper, aluminum, gas) and the absence of price variation clauses with industrial customers pose a risk to margins on existing contracts.

  • Other expenses increased in H2 FY26 due to higher subcontracting costs associated with growing service and EPC revenue, impacting the expense structure.

Key financials

  1. Revenue ₹196.62 Cr +13%YoY
  2. EBITDA Margin 10.5%
  3. PAT Margin 7.2%
  4. Working Capital Days 73 days
  5. ROE 19%
  6. ROCE 16%

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue70 105 80 118
EBITDA7 9 10 11
Net profit4 6 6 8
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

₹271.59 Cr

as of 2026-05-21 quantified

Execution

mostly in the year 2027. A very small amount is planned in 2028.

Composition

Mix 2 projects
  • PGVCL RDSS project (EPC) ₹85 Cr 65.4%
  • Reliance Data Center (EPC) ₹45 Cr 34.6%

Share of order book by project, derived from disclosed amounts

The company has a strong order book of INR 271.59 crores, with a focus on value-added order booking rather than non-value-added orders. EPC projects are strategically taken to build credentials and push manufactured products.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed from the pre-IPO Round 1, Round 2, and IPO funds (total INR 62 crores)
    • GIS factory in Baroda ₹20 Cr
    • Odisha unit ₹19 Cr
    • Short-term borrowings, miscellaneous, and general corporate purpose ₹23 Cr
    I want to also give you an update on capex where, you know, we have raised INR62 crores from the pre-IPO Round 1, Round 2, and IPO funds. Overall, we have planned for INR20 crores to be placed in Karachiya GIS factory in Baroda, second unit of INR19 crores in Odisha, and the other funds were to be utilized for short-term borrowings.
  • Debt Debt disclosed
    • Repayment Used to repay short-term borrowings, reducing working capital requirement. ₹15 Cr
    You know, our working capital requirement was INR33 crores last year, and it has reduced to INR17 crores this year. It is because we could push those INR15 crores into this short-term repayment of short-term borrowings.

Guidance & targets

Revenue

  • Revenue Growth Revenue · next 2-3 years · Medium confidence 20-30%
    the revenue growth is expected 20% to 30% for next two to three year.

    — Jignesh Patel

  • Export Revenue Share Revenue · going forward · High confidence 20-25%
    going forward, we expect that at least 20% to 25% of the revenue comes from our export business.

    — Jignesh Patel

  • Export Revenue Share Revenue · this year · Medium confidence 25%
    but this year also our target is to at least reach 25% of our sales revenue for manufacturing.

    — Jignesh Patel

  • Incremental Revenue from GIS factory Revenue · when fully operational · High confidence INR 200 crores
    so I can say we can add another INR200 crores revenue actually when we start full-fledged and we start operating fully with the present capex.

    — Jignesh Patel

  • Incremental Revenue from Odisha facility Revenue · when fully operational · High confidence INR 100 crores
    And Odisha, we are expecting to add another INR100 crores in terms of sales revenue when the Odisha facility will be fully operative.

    — Jignesh Patel

  • Total Incremental Revenue from New Facilities Revenue · going forward · High confidence INR 300 crores
    So, overall, you can say with this capex we can add easily INR300 crores going forward, and we have done a lot of reverse integration actually in existing facility. So, overall, we can say that all three factories is going to contribute going forward.

    — Jignesh Patel

Margin

  • EBITDA and PAT Margin Improvement Margin · next 2-3 years · Medium confidence at least 100 bps
    But the EBITDA and PAT is going to be our focus, you can say, area, and I can say even moderately we are going to improve by at least 100 basis point going forward for next two to three years.

    — Jignesh Patel

What to watch in Q1 FY27

Completion of delayed US export project

by mid-June 2026
Current Project execution delayed, INR 25 crores sales pending
Target Project completed and sales realized

Why it matters

Resolution of delayed sales and reduction of inventory will positively impact financial performance.

But the project execution was delayed a bit, and that's how we could not really deliver almost INR25 crores sales, which was originally planned in last financial year, but we could deliver only in the first month and second month, or by 15th of this month or 25th of this month, the entire project is going to be over.

Risks & concerns

  • Inventory Pile-up/Export Project Delay

    medium

    Geopolitical tensions delayed a US export project, leading to INR 40 crores inventory pile-up and delayed sales of INR 25 crores in FY26.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Increased inventory levels were maintained to mitigate the impact of volatile raw material costs (steel, copper, aluminum, gas), which can erode profits.

    Management acknowledged

  • Lack of Price Variation Clauses

    medium

    Industrial customers do not offer price variation clauses, exposing the company to raw material price fluctuations on existing contracts, requiring contingency planning.

    Management acknowledged

Q&A highlights

7 direct
Export performance and growth Direct
Last year, you know, we have done almost INR31 crores export out of the complete manufacturing you can say, revenue, and going forward, we expect that at least 20% to 25% of the revenue comes from our export business.

Provides specific export revenue for FY26 and future targets, indicating international market focus and diversification.

Asked by Shreya, Individual Investor

Incremental capacity from new GIS plant Direct
So, we are expecting with both the factories coming in, of course, GIS factory you have asked the question, so I can say we can add another INR200 crores revenue actually when we start full-fledged and we start operating fully with the present capex. And Odisha, we are expecting to add another INR100 crores in terms of sales revenue when the Odisha facility will be fully operative. So, overall, you can say with this capex we can add easily INR300 crores going forward...

Quantifies the revenue potential from new manufacturing facilities, crucial for future growth projections and capacity expansion.

Asked by Ananya Singh, American Express

Sourcing orders from Zambia and other countries Direct
I explained actually that Zambian utility, they are looking for good manufacturing companies actually in India. So, they came to visit our factory, and that's how the first lead was generated. Like that, we are now invited to Zambia. So, we will be going to Zambia and we will be now adding a lot of other products also into the portfolio. So, not only RMU, but compact substation, then the smart RMU.

Details the strategy for international market entry and customer acquisition, highlighting product innovation (smart RMU) as a differentiator.

Asked by Shreyansh, KERPL

Overall spend on the Skill Development Center Direct
We spent almost INR6 crores to INR6.5 crores in terms of Skill Development Center, which was already -- if you see DRHP, maybe we have written already our plans for investment, and major investment of Skill Development Center was from internal accruals actually.

Provides insight into investment in human capital and long-term capability building, funded by internal accruals, to support future growth.

Asked by Shreyansh, KERPL

E-house products and their use Direct
So, E-house is basically right now used by many utilities to convert their civil construction substation into the complete compact substation. It is -- you can say it is electrical house, E-house. So, instead of compact, it has got everything inside. So, you can say your medium voltage switchgear, your low voltage switchgear, your control and protection relay panels, your battery, battery charger, even a small office goes into that.

Clarifies a new product offering and its application, particularly in data centers and for utilities, indicating product portfolio expansion.

Asked by Sandeep Kunwani, Kunwani Family Office

EPC order book and company's focus Direct
No. Because, see, you know we are in an expansion mode. We have to enter into many more avenues. Now EPC, you see EPC out of INR144 crores, there are two orders: one is INR85 crores, and I said you there are huge number of RMUs going into that field, so we wanted to create one credential for that. And second is INR45 crores, which is going actually into this Deendayal Port, Kandla Port... So, that way we are not focusing on more on EPC... our focus, the focus is going to be maximum in our manufacturing and value-added services.

Clarifies the company's strategic focus, indicating EPC is a means to gain credentials and push manufactured products, not a shift in core business.

Asked by Sandeep Kunwani, Kunwani Family Office

Increase in other expenses in H2 FY26 Direct
In the second half, our service revenue and EPC revenue is going higher because -- and then therefore our subcontract expenses are also going higher. Okay. If you see in our last year in FY25, our sub contractual level is only INR4 crores, and right now is INR8 Crores. Okay. That's jump is increase in other expenses.

Explains a significant increase in expenses due to higher service and EPC revenue, which involves subcontracting, indicating a shift in revenue mix and associated costs.

Asked by Disha, Sapphire Capital

US entity and potential subsidiary status Partial
What I understand is, I think from his question, although it is not fully audible, see, yes, going forward, down the line, we will consolidate if this entity becomes large enough and we can easily bring that under this company. That option is open. But we'll see what going forward actually what comes up.

Addresses potential conflict of interest or future strategic integration, with management indicating it's a possibility for the future, impacting long-term organizational structure.

Asked by Smit Shah, Individual Investor

3 min read 8 chapters

Detailed narrative

FY26 Financial Performance & Growth Drivers

Parth Electricals & Engineering Limited reported a steady revenue growth of 13% year-on-year for FY26, with EBITDA margin expanding by 49 basis points to 10.53% and PAT margin growing by 140 basis points to 7.19%. The company's working capital stood at 73 days, with ROE at 19% and ROCE at 16%. Management highlighted significant growth drivers including government policies like the RDSS scheme, the National Electricity Plan envisaging INR 9.16 lakh crores in T&D capex, and a sharp increase in peak power demand projected to reach 335 gigawatts by FY2030.

Product Portfolio Expansion & Innovation

The company is actively enhancing its product portfolio, moving beyond medium voltage switchgear to include high voltage ranges (220kV and 400kV) and related control and protection relay panels. A key achievement was the development of Intelligent Motor Control Centers for a US project, with the remaining part being dispatched this year. Parth Electricals is also introducing 33kV Ring Main Units (RMUs) and medium voltage panels, and has developed a unique Earth Link Box, previously imported, for data centers.

Export Market Expansion & Customer Engagement

Parth Electricals intensified its focus on export markets, dispatching products to USA, Zambia, Bhutan, and Nepal, which were negligible last year. FY26 export revenue reached INR 31 crores, with a target to increase this to 20-25% of total revenue going forward. The company's strategy involves providing value-added services, timely support, and specialized training, as exemplified by the successful INR 10.62 crores order from ZESCO Limited in Zambia, where the company demonstrated quick product delivery and committed to training local engineers.

Strategic Capex & Facility Development

The company raised INR 62 crores from pre-IPO and IPO funds, allocating INR 20 crores for a GIS factory in Baroda and INR 19 crores for a unit in Odisha. The Odisha facility's operational timeline has been shortened from May 2027 to October 2026 by opting for a long-term rental agreement for a 30,000-40,000 sq ft space. The GIS manufacturing facility in Baroda is on track for inauguration by September 2026, with the building nearing completion and machineries on the way.

Skill Development Center & Workforce Enhancement

Parth Electricals is inaugurating its Skill Development Center on May 26, 2026, at its Vadodara Manjusar facility, with an investment of INR 6-6.5 crores from internal accruals. This initiative aims to build a stronger, more skilled workforce, enhance in-house capabilities, and provide technical training. The center will also be used to train engineers from international clients, such as ZESCO, fostering long-term talent retention and growth.

Order Book & Execution Strategy

The company holds a strong order book of INR 271.59 crores, primarily for execution in 2027. This includes significant EPC projects: INR 85 crores for a PGVCL RDSS project and INR 45 crores for a compact substation for Reliance Data Center's AI factory. Management clarified that EPC projects are strategically undertaken to gain credentials and push manufactured products, not to shift away from their core manufacturing and value-added services focus.

Raw Material Volatility & Margin Management

Raw material price volatility, particularly for steel, copper, aluminum, and gas, remains a concern. To mitigate its impact on profits, the company has increased inventory levels. However, the absence of price variation clauses with industrial customers means Parth Electricals must build contingencies into new project bids and account for additional raw material costs to maintain margins.

US Market Entry & Subsidiary Potential

Parth Electricals is actively pursuing the US market, leveraging a small, co-founded US entity for local presence, service support, and market intelligence. This entity helps source components and understand US requirements, aiding in project execution. Management indicated that if this US entity grows sufficiently, there is an open option for its consolidation as a subsidiary of Parth Electricals in the future, potentially within 3 years.

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