Quality Power El

Quality Power Electrical Equipments reported a strong Q3 FY26. Consolidated total income reached ₹284.3 crores, marking a 30% sequential growth and over 250% year-on-year increase. Consolidated EBITDA stood at ₹79.3 crores, with the margin improving to 28%. Profit after tax for the consolidated entity was ₹62.8 crores, reflecting a 65% sequential growth. Standalone performance also showed healthy growth, with total income at ₹59.2 crores (up 9% QoQ) and EBITDA at ₹20.4 crores (35% margin).

The company completed the acquisition of a 50% stake in Sukrut Electric Company Private Limited, forming a joint venture with Yash Highvoltage Limited. Sukrut, which specializes in electrical component manufacturing, turned operationally positive in its first month under Quality Power's management, a significant achievement given its prior performance. This acquisition enhances Quality Power's access to the transformer manufacturing value chain and brings complementary capabilities to its ecosystem.

Progress on capacity expansion is tangible, with the Sangli Global coil factory now targeting completion by June 2026, ahead of its original schedule. An additional investment has been approved for a Global Engineering and Technology center at Sangli, which will serve as a group-wide hub for design and product development. The Cochin expansion is fully operational, and Mehru's expansion is progressing with phased equipment commissioning. The company is also evaluating establishing an instrument transformer manufacturing facility in Turkey to serve European markets.

The company's current signed order book stands at approximately ₹895 crores, providing over one year of revenue visibility. Additionally, Quality Power is in advanced discussions for potential orders exceeding ₹300 crores, expected to be signed within the next few weeks. Demand is particularly robust from the Middle East, Europe, United States, and Australia, reflecting the strength of the product portfolio and growing global footprint. The company aims to execute 95% of its order book within 12-18 months.

A key milestone in portfolio expansion is the first Gas Insulated Switchgear (GIS) trial product, targeted for market readiness by June or July 2026. The company is also seeing an increase in customer audits for HVDC and STATCOM projects, indicating growing confidence from global customers. This focus on advanced planning, disciplined cost management, and customer timelines has helped sustain profitability despite a dynamic operating environment.

Overall EBITDA margin is guided to be 22% as a floor with an upward bias. While Mehru's EBITDA margin is 16.4%, the coil product factory (Quality Power) achieved 34% and Endoks 30%. The company manages commodity price volatility, with 98% of its order book being fixed-price. They adjust prices to manage anticipated increases in aluminium, and while copper prices have soared, their exposure is limited.

Working capital was stretched during the quarter due to the strategic stock piling of critical raw materials, such as insulators and long-lead cables. This measure was taken to ensure operational requirements and avoid execution delays, especially given ongoing supply chain constraints and insulator shortages. The company's net current assets are close to ₹390 crores, providing a strong liquidity position.