Quality Power Electrical Equipments Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Quality Power Electrical Equipments delivered a strong Q3 FY26, marked by robust consolidated revenue growth of 30% QoQ to ₹284.3 crores and significant margin expansion. Strategic moves included the acquisition of a 50% stake in Sukrut Electric, which quickly turned profitable, and accelerated capacity expansion plans. Despite challenges from commodity price volatility and working capital stretch, the company maintains a healthy order book of ₹895 crores and a positive outlook for future growth.

Highlights

  • Consolidated Total Income grew 30% QoQ to ₹284.3 crores and over 250% YoY.

  • Consolidated EBITDA increased to ₹79.3 crores, with margin improving to 28%.

  • Standalone EBITDA increased to ₹20.4 crores, with margin improving to 35%.

  • Mehru's EBITDA margin achieved 16.4%, aligning with commitments.

  • Completed acquisition of 50% stake in Sukrut Electric Company Private Limited, which became operationally positive in its first month under new management.

  • Sangli Global coil factory completion targeted by June 2026, ahead of schedule.

  • First GIS trial product targeted for market readiness by June or July 2026.

  • Order book expanded meaningfully to ₹895 crores, with an additional ₹300 crores in advanced discussions.

Concerns

  • Volatility in metal prices (copper, aluminium) and supply chain constraints persist.

  • Working capital is currently stretched due to strategic stock piling of critical raw materials.

  • Insulators remain a cause of concern due to ongoing shortages.

  • Bureaucracy in getting audits and approvals for new facilities is a challenge.

Key financials

  1. Consolidated Total Income 2,843 Mn +250%YoY
  2. Consolidated EBITDA 793 Mn
  3. Consolidated EBITDA Margin 28%
  4. Consolidated PAT 628 Mn
  5. Standalone Total Income 592 Mn +63%YoY
  6. Standalone EBITDA 204 Mn +99%YoY
  7. Standalone EBITDA Margin 35%
  8. Standalone PAT 146 Mn

What they filed

Q1 FY27: revenue up 31.6%, net profit up 27.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue94 73 108 177 206 +119%284 +289%281 +160%233 +32%
EBITDA8 17 16 31 36 +350%79 +365%30 +88%41 +32%
Net profit13 20 30 37 35 +169%63 +215%51 +70%47 +27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹281.7 Cr Total
  • Endoks ₹149 Cr 52.9%
  • Mehru ₹83 Cr 29.5%
  • Quality Power Electrical Equipments (Indian entities) ₹45.2 Cr 16.0%
  • Sukrut Electric Company Private Limited ₹4.5 Cr 1.6%

Order book

high confidence

Total value

₹895 Cr

as of 2026-02-05 quantified

Execution

95% executable over next 12-18 months

Composition

Mix 4 entities
  • Quality Power Electrical Equipments 33%
  • Sukrut 0.5%
  • Mehru 44.7%
  • Endoks 17.3%

Share of order book by entity· partial disclosure (95.5% of the book)

Pipeline

deal pipeline tcv

Advanced discussions for potential orders likely to sign in next few weeks

The company is covering more than one year of order book and expects to convert significant pipeline into signed orders soon.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Initial outlay for Mehru greenfield facility (test lab, allied equipment, manufacturing, building) $6 Mn
    • Sangli Global coil factory construction
    • Global Engineering and Technology center at Sangli
    • Instrument transformer manufacturing facility in Turkey
    The Sangli Global coil factory construction timeline has been advanced in line with our earlier communication and we are now targeting completion by June 2026 ahead of our earlier schedule. ... the board also has approved an additional investment for setting up a Global Engineering and Technology center at Sangli. ... The Cochin expansion is fully complete and we are evaluating the establishment of a instrument transformer manufacturing facility in Turkey... The initial outlay for the test lab and other allied equipment including manufacturing is about 3-$3.5 million, plus the building. So, we're working, I think the building would cost us about $2-$3 million. So, $6 million is what we have an outlay.
  • M&A Sukrut Electric Company Private Limited Acquisition · Closed

    Enhances access to transformer manufacturing value chain, brings complimentary capabilities, turned operationally positive in first month.

    Turned operationally positive in its very first month under the new management.

    On the strategic front we took an important step by completing the acquisition of 50% stake in Sukrut Electric Company Private Limited converting into a joint venture of the company along with Yash Highvoltage Limited. Sukrut operates in electrical component manufacturing and brings in highly complimentary capabilities to our ecosystem.
  • Liquidity Cash ₹390 Cr Net current assets are close to INR 390+ crores, providing financial flexibility.
    I think our net current assets is in close to INR 390-plus crores, and what we say, we would we would also attempt some acquisition in the near future if we find something attractive in our space.

Guidance & targets

Profitability

  • Overall EBITDA Margin Profitability · FY26 · High confidence 22% as a floor with an upward bias
    I think you can take about 22% as a floor and with an upward bias that we would try to achieve.

    — Bharanidharan Pandyan

Tax

  • Effective Tax Rate Tax · FY26 · Medium confidence about 20%
    About tax rate? Tax rate should be you can take it about 20%, assuming that even if we don't do any R&D in Turkey and there's only small R&D, you still would get it.

    — Bharanidharan Pandyan

Product Development

  • GIS Trial Product Market Readiness Product Development · FY27 · High confidence June or July 2026
    As part of the upcoming promising journey our first GIS trial product is targeted for market readiness by June or July of 2026 making an important milestone in our portfolio expansion.

    — Sanjog Mhatre

Capacity

  • Mehru Greenfield Facility Target Size Capacity · 2-3 years · Medium confidence $25 to $35 million
    At I think about $6 million, I think in about two to three years' time, I believe it should be a $25 to $35 million facility with similar margins of between 15% and 20%.

    — Bharanidharan Pandyan

Market context

  • Sangli Global Coil Factory Completion Capacity · FY27 · High confidence June 2026

    Previously later than June 2026 → June 2026

    The Sangli Global coil factory construction timeline has been advanced in line with our earlier communication and we are now targeting completion by June 2026 ahead of our earlier schedule.

    — Bharanidharan Pandyan

What to watch in Q4 FY26

Mehru EBITDA Margin Trajectory

next quarter
Current 16.4%
Target Higher teen margin

Why it matters

To assess if Mehru can achieve higher margins while pursuing growth, as guided by management.

I believe we should be in hope for a higher teen margin if the commodity prices remain stable.

Risks & concerns

  • Commodity Price Volatility

    medium

    Sudden increases in copper and aluminium prices can cause short-term shocks, though managed by fixed-price orders and price adjustments.

    Management acknowledged

  • Supply Chain Constraints (Insulators)

    medium

    Shortage of modern insulators is a cause of concern, especially for critical projects, leading to stock piling.

    Management acknowledged

  • Working Capital Stretch

    medium

    Working capital limits are optimally utilized and stretched due to strategic stock piling of critical raw materials to ensure operational requirements.

    Management acknowledged

  • Bureaucracy in Approvals

    low

    Delays in getting audits and approvals from authorities for new facilities and projects.

    Management acknowledged

  • Forex Translation Gains Reduction

    low

    Turkish Lira stability has resulted in zero forex gain or loss, which was previously a significant translation gain.

    Management acknowledged

Q&A highlights

8 direct
Mehru Margin Improvement vs. Growth Direct
I believe we should be in hope for a higher teen margin if the commodity prices remain stable. However, Mehru is also the place where we have new capacity coming in and we have some new geographies that we need to explore. So it's between margin and growth.

Management clarifies their strategic priority for Mehru is growth and market expansion, potentially sacrificing some margin in the short term, but aiming for higher teen margins.

Asked by Shaleen Kumar

New Sangli Facility Qualification and Order Booking Direct
So once we have an operational facility the customer audits would start on the HVDC. There would be at least about 40 - 50 different audits. ... I think orders at this moment is not the worry, it is how we are able to execute get the audits and the approvals faster from the authorities the bureaucracy that is basically.

Provides insight into the post-completion process for the new Sangli facility, highlighting the extensive customer qualification required and the focus on execution efficiency.

Asked by Shaleen Kumar

HVDC vs. Battery Energy Storage Systems (BESS) Direct
BESS is a complimentary technology to HVDC FACTS and battery energy storage is at this moment a couple of hours maximum. ... When you have to really store energy for more than 8 or 10 hours we still don't have those kind of batteries.

Clarifies that BESS and HVDC serve different purposes in the grid, with HVDC remaining crucial for long-duration energy transmission and storage, mitigating concerns about BESS cannibalization.

Asked by Praveen Motwani

Fixed Price Orders and Commodity Volatility Management Direct
I don't have the numbers, but I think I can be reasonably sure that 98% is fixed prices. So it's very rarely because we do not have any government direct dealings unless it's Power Grid.

Reveals that the vast majority of the order book is fixed price, indicating strong risk management against commodity price fluctuations, which is a key concern in the sector.

Asked by Aditya Trivedi

Working Capital Stretch and OCF to EBITDA Direct
Sir our working capital limits we have optimum utilization during this quarter for the procurement of raw materials like conductors and insulators to support the business operations and requirements. That's why it's stretched during this quarter.

Explains the reason for the stretched working capital, attributing it to strategic stock piling of critical raw materials to ensure execution and meet demand, rather than operational inefficiency.

Asked by Aditya Trivedi

GIS Product Line and Korean Partnership Benefits Direct
So working with Hyosung also not only allows us the Indian market going forward but also the Korean and the American markets where we see a lot of traction and including Middle East. So it has a natural buy in.

Highlights the strategic advantages of the partnership, including market access beyond India and knowledge sharing for high-end technology development.

Asked by Kartik Kohli

Chinese Competition and Trade Deals for Mehru Direct
With regards to instrument transformers to Indian utilities I think the discussion you are referring to is power transformers not instrument transformers. ... So I don't think the worry is at the Mehru end for the Chinese.

Management clarifies that recent news about Chinese relaxation primarily concerns power transformers, not instrument transformers, thus mitigating concerns about direct competition for Mehru.

Asked by Nemish Sunder

Rationale for Manufacturing Expansion in Turkey vs. India Direct
So, the customer here is not really worried about prices. It's not the lowest cost of manufacturing which decides a buy decision. It is also access to the factory, the FAT. So, most European customers need a visa to enter India, whereas it's a domestic flight for them to fly inside EU.

Explains the strategic rationale for expanding in Turkey, emphasizing proximity to European customers, ease of FAT, and utilizing existing cash, rather than solely focusing on manufacturing cost arbitrage.

Asked by Naman Parmar

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Highlights

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).

Strategic Acquisition and Joint Venture

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.

Capacity Expansion and New Facilities

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.

Robust Order Book and Market Demand

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.

Product Development and Innovation

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.

Margin Management and Commodity Price Volatility

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 and Liquidity

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.

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