Detailed Narrative
Strong H1 FY26 Performance and Non-Linear Growth
Pelatro delivered robust financial results for H1 FY26, with consolidated revenue reaching ₹60.74 crores, marking a 58% year-over-year growth. This strong top-line performance was accompanied by even higher growth in profitability, with EBITDA increasing by 59% YoY to ₹13.81 crores and PAT surging 63% YoY to ₹8.21 crores. This non-linear growth, where profits outpace revenue, is a key characteristic of the company's product-centric business model, indicating improving operational leverage.
High Revenue Visibility and Predictability
The company has achieved significant revenue visibility, having already contracted 100% of its target revenue for the full financial year 2026. Looking further ahead, 59% of the target revenue for FY27 is also already secured. This high level of contracted revenue provides strong predictability and stability to Pelatro's business, with management confirming that they are fully geared up with adequate delivery capacity to execute and recognize all contracted revenue.
Strategic Estel Acquisition and Early Synergies
The acquisition of Estel, effective July 1, 2025, has begun contributing to Pelatro's financials, adding ₹6.91 crores in revenue and ₹1.02 crores in EBITDA during Q2 FY26. While Estel's EBITDA margin of approximately 14.76% is currently lower than the core CVM division's 23.8%, causing a temporary weighted average margin decline, management anticipates an improvement in Estel's margins to CVM levels in the short term. Early cross-sell opportunities are emerging, with three existing CVM customers actively considering Estel products.
Improving Cash Flow and Efficient Collections
Pelatro has shown a notable improvement in its cash flow position. The average quarterly cash flow, which was negative ₹4 crores in the previous financial year, has reduced to negative ₹1 crore for the last two quarters. Management expressed strong confidence that cash flow will turn positive in the coming quarters⏳. Complementing this, the company maintained an efficient Days Sales Outstanding (DSO) of 100 days for H1 FY26, with trade receivables standing at ₹33.55 crores.
Product Development and Market Expansion Strategy
The company is committed to continuous product development, with plans to launch new versions for all acquired Estel products by March 2026. Pelatro currently serves over 45 telcos globally with a portfolio of five products in its CVM division and three in the Estel division. The organic growth strategy focuses on expanding its customer base and increasing average revenue per customer through cross-selling and upselling. Geographically, the Middle East and Africa are showing strong order momentum, while Asian customers contribute higher average revenue due to their larger scale, with ample room for expansion in these markets.
Financial Guidance for FY26
Pelatro provided clear financial guidance for the full FY26, expecting EBITDA margins to be around 24% and PAT margins around 14%, both including other income. The company also projects an effective tax rate in the range of 20% to 22% for the current year, benefiting from lower rates and enhanced deductions in Singapore. For the next three years, the company targets an organic revenue CAGR of 25% to 30%, indicating sustained growth expectations.