Detailed Narrative
FY26 Performance Overview
Prostarm reported a 10% year-on-year growth in operating revenue for FY26, reaching INR 386 crores. PAT for the full year stood at INR 33 crores, reflecting a 14% YoY growth, and the PAT margin improved to 8.55% from 8.24% in FY25. This growth was achieved despite challenges in the fourth quarter.
Q4 FY26 Challenges and Impact on Revenue & Margins
Q4 FY26 operating revenue was INR 105 crores, showing a 27% YoY growth but a 35% sequential degrowth. EBITDA for the quarter was INR 11 crores, with a margin of 10.43%. This moderation was attributed to temporary supply chain disruptions, limited gas availability for fabrication due to geopolitical situations in West Asia, increased procurement costs, and dollar appreciation. Several projects, including a INR 40 crore Adani order, were deferred from Q4 to Q1 FY27.
Strengthened Order Book and Future Visibility
As of March 31, 2026, Prostarm's overall order book stood at INR 1202 crores, comprising INR 1106 crores of executable orders and INR 96 crores of additional L1 orders. Furthermore, bids aggregating INR 257 crores are currently under evaluation. Management expects a minimum 25% growth in FY27, with INR 430 crores of revenue already secured from the order book and channel business.
Working Capital and Liquidity Management
Working capital increased to INR 83 crores in FY26 from INR 64 crores in FY25, with working capital days rising to 185 days from 68 days. This was primarily due to higher receivables from large Q4 project executions and strategic inventory build-up. However, the company is effectively net debt-free, with long-term debt reduced to INR 80 lakhs and fixed deposits exceeding INR 102 crores, providing a strong liquidity buffer.
Manufacturing Capacity Expansion
Prostarm is expanding its manufacturing footprint with two new facilities. A 1.20 GWh battery manufacturing facility in Jhajjar, Haryana, costing INR 25 crores, is expected to be operational by the end of Q1 FY27, with a potential revenue of INR 1000 crores. Additionally, a UPS manufacturing facility in Gujarat, costing INR 5-6 crores, is slated for operation by Q2 FY27, aiming for INR 500-600 crores in revenue and enhancing product diversification.
Strategic Outlook and Margin Guidance
Management remains confident in achieving an EBITDA margin of 12-13% and a PAT margin of 8.5-9.5% in Q1/Q2 FY27. They anticipate positive operating cash flow in FY27, driven by improved collections and operational efficiencies. The company is also exploring hiving off BESS developer projects while retaining the EPC component, with an overall project IRR of 10-11%.