Parth Electricals & Engineering Limited

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.

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.

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.

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.

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.

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 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.

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.