Prostarm Info Systems Q1 FY27 earnings call

Prostarm Info Systems Limited, established in 2008, has evolved from a specialized equipment supplier to a comprehensive power solutions company. The company focuses on designing, manufacturing, assembling, and servicing energy storage and power quality equipment, with a product portfolio including UPS systems, solar hybrid inverters, and lithium battery packs. Beyond manufactured products, Prostarm also executes solar EPC projects, system integration solutions, and provides value-added services like installation and AMCs. This strategic evolution positions the company to capitalize on the growing demand in the power electronics sector.

For Q1 FY27, Prostarm reported revenue from operations of INR 76 crores, marking a 38% year-on-year growth. Despite a sequential moderation from INR 104 crores in Q4 FY26, attributed to the seasonal nature of Q1, profitability saw significant improvement. EBITDA for the quarter stood at INR 7 crores, with an EBITDA margin of 8.55%, an increase of 126 basis points year-on-year. Profit after-tax was INR 5 crores, demonstrating a 156% year-on-year growth, and the PAT margin improved to 6.05%. This enhanced profitability was primarily driven by higher revenues and improved operating leverage.

As of June 30, 2026, Prostarm's total order book, including orders under L1 status, stood at approximately INR 1,090 crores. This order book is well-diversified, with energy storage systems accounting for the largest share, providing strong execution visibility. Key strategic orders secured in Q1 FY27 include a battery energy storage project worth INR 11 crores and a solar EPC order of INR 165 crores from Solarium Green Energy. Additionally, the company has bids under evaluation exceeding INR 2,000 crores, including two large orders valued at approximately INR 1,800 crores, indicating a robust pipeline for future growth.

To support its growth, Prostarm is expanding its manufacturing footprint. The 1.2 gigawatt-hour battery energy storage systems manufacturing facility at Jhajjar, Haryana, is in its final stage of commissioning and is expected to become operational shortly in H1 FY27. Concurrently, a new UPS manufacturing facility in Gujarat is progressing as planned, with commercial operations anticipated in Q2 FY27. These facilities are designed to significantly enhance manufacturing capabilities, expand product offerings, and meet growing demand. Furthermore, the implementation of SAP and Salesforce is nearing completion, expected to be operational by the end of H1 FY27, to strengthen operational efficiency and digital drive.

The company has shown significant improvement in working capital management, with working capital days reducing to 168 days in Q1 FY27 from 185 days in Q4 FY26. Cash flow from operating activities also improved, moving from INR 49 crores negative in Q4 FY26 to INR 16 crores negative in Q1 FY27. Management anticipates further unlocking of working capital, with major collections expected in Q2 FY27. The target for working capital days by March 2027 is set at 120-150 days, and the company expects cash flow from operations to turn positive by the end of FY27.

Prostarm has strategically shifted its focus within the Battery Energy Storage Systems (BESS) market. Due to intense pricing pressure and geopolitical challenges^🌐 (e.g., India-China issues, increased component costs, export restrictions, and new taxes) in the utility-scale BESS sector, the company has not bid for utility projects for approximately the last year. Instead, it is now concentrating on the higher-margin Commercial & Industrial (C&I) segment, which is less organized and offers better opportunities for value addition. This shift aims to mitigate margin pressures and leverage the company's expertise in a less competitive market segment.