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    Quadrant Future Tek Limited

    QUADFUTURE
    Capital Goods·31 Jul 2025
    Management Summary

    Quadrant Future reported a 12% YoY increase in Q1 FY26 operational revenue to ₹28.7 crores, with EBITDA improving to 8.9%. The company has secured substantial Kavach orders worth ₹984 crores and is actively preparing for execution, despite the Kavach division incurring increased losses in Q1 due to preparatory investments and nil revenue contribution. The cable business is being revived, and the company is expanding into new segments like solar and electric vehicles.

    Highlights

    5

    • Operational revenue for Q1 FY26 stood at ₹28.7 crores, marking an increase of 12% on a YoY basis.

    • EBITDA for Q1 FY26 was approximately 8.9%, an improvement from 7.3% during the same period in the last financial year.

    • The company secured ambitious Kavach orders totaling ₹984 crores (₹829 crores for 1,200 locomotives and ₹155 crores for trackside systems).

    • Kavach production is in full swing, with raw materials mobilized and an in-house manufacturing capacity of 300 locomotives per month.

    • Received BIS approval for solar cables, enabling full-scale entry into the solar cable business, and revived the cable business development with a new CEO.

    Concerns

    3

    • The Train Signalling (Kavach) division's segment loss increased from ₹4.24 crores in Q1 FY25 to ₹10.09 crores in Q1 FY26, due to increased costs for team building and technical expenses.

    • Revenue contribution from the Kavach Division was nil in Q1 FY26 as the project is pending rollout clearance.

    • The company faces a tight deadline of December 11, 2025, to complete the initial Kavach order, which is contingent on timely certification.

    Key financials

    Single quarter

    02 metrics
    1. 01Operational Revenue₹28.7 Cr+12%YoY
    2. 02EBITDA Margin8.9%

    Segment breakdown

    Specialty Cable Division
    ₹28.7 Cr Revenue
    Train Signalling Division (Kavach)
    ₹10.09 Cr Segment Loss₹0 Cr Revenue Contribution
    List

    Order Book

    high confidence

    Total Value

    ₹ 1,024 crores

    as of 2025-06-30

    quantified

    Execution

    Kavach order to be completed by 11th December 2025.

    Composition

    Mix3 products
    • Kavach (Locomotives)80.9%
    • Kavach (Trackside)15.1%
    • Cable Division3.9%

    Share of order book by product

    Pipeline

    other

    Expecting further orders in cable division and continuous inflow of orders for Kavach.

    "The company has a strong order book for both Kavach and cable divisions, with continuous inflow expected for Kavach due to its massive rollout."

    Source:
    Prepared remarks

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Liquidity

    Liquidity disclosed

    The company has mobilized adequate working capital and does not foresee any problems in this regard.

    Guidance & targets

    5
    CategoryTargetPriority
    Kavach Project
    Kavach Order Completion
    by 11th December 2025
    		High
    Kavach Production
    Locomotive Production Capacity
    300 locomotives per month
    		High
    Kavach Orders
    Order Inflow
    continuous inflow
    		Medium
    Cable Business
    Growth in New Segments
    good amount of growth
    		Medium
    Solar Cable Business
    Market Entry
    full scale entry
    		Medium

    Kavach Certification Approval

    By December 11, 2025
    CurrentField trials about to begin, awaiting final certification
    TargetReceipt of Kavach 4.0 certification

    Why it matters

    Essential for revenue recognition and execution of the ₹984 crores Kavach order.

    We are very hopeful of completing the order and executing it within the scheduled timeline.

    How to verify

    risks_and_concerns[risk='Kavach Approval Deadline']

    Risks & concerns

    3
    RiskSeverity

    Kavach Approval Deadline

    The company has a tight deadline of December 11, 2025, to complete the initial Kavach order, which is contingent on receiving the 4.0 certification. — Management acknowledged

    high

    Increased Kavach Division Loss

    The Kavach division incurred a higher loss of ₹10.09 crores in Q1 FY26, up from ₹4.24 crores in Q1 FY25, due to investments in team building and technical expenses without corresponding revenue. — Management acknowledged

    medium

    Nil Kavach Revenue Contribution

    Despite significant orders, the Kavach division generated no revenue in Q1 FY26 as the project is awaiting rollout clearance, impacting overall profitability. — Management acknowledged

    medium

    Q&A highlights

    8

    “First of all, we have mobilized a very good quantum of raw materials already in our stock. The production of the Kavach equipment is into full swing. So, most of the components that were required for in-house production are already in for the complete order.”

    Clarifies the company's readiness for execution immediately after certification.

    asked by Piyush Sevaldasani

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance

    Quadrant Future reported Q1 FY26 operational revenue of ₹28.7 crores, marking a 12% year-on-year increase. EBITDA for the quarter improved to 8.9% from 7.3% in Q1 FY25. However, the Train Signalling (Kavach) division recorded an increased segment loss of ₹10.09 crores, up from ₹4.24 crores in Q1 FY25, primarily due to investments in team building and technical expenses, as the division had nil revenue contribution in the quarter.

    02

    Kavach Project Update and Order Book

    The company has secured significant orders for its Kavach system, totaling ₹984 crores, comprising ₹829 crores for locomotive installations and ₹155 crores for trackside systems. Production for these orders is currently in full swing, with raw materials mobilized and an in-house manufacturing capacity of approximately 300 locomotives per month. Additionally, the company holds ₹40 crores in orders for its cable division, bringing the total order book to ₹1024 crores.

    03

    Kavach Approval Process and Timelines

    Quadrant Future is in the final stages of obtaining the Kavach 4.0 certification, with field trials expected to commence shortly. The company is confident of meeting the December 11, 2025, deadline for completing the initial order, leveraging learnings from earlier vendors and its dedicated Bangalore-based Independent Safety Assessor. Management emphasized that the approval process is comprehensive, covering both locomotive and station systems, and does not anticipate long delays in field trials.

    04

    Specialty Cables Business Revival and New Avenues

    The company has revived its specialty cables business development, appointing Mr. Abhigyan Kotnala as the new Chief Executive Officer for this division. Quadrant Future recently received BIS approval for solar cables, enabling its full-scale entry into the solar cable market. The company also plans to expand into electric vehicle and export markets, aiming for significant growth in these mass-scale segments, which are expected to drive substantial growth in the coming years.

    05

    Working Capital and Production Readiness

    Management confirmed that adequate working capital has been mobilized to support the Kavach project, ensuring no liquidity issues. The company has built the necessary infrastructure and ecosystem for Kavach production and has 15 teams ready for installation. They expressed confidence in their ability to scale up operations quickly, potentially adding more teams or outsourcing if needed, to meet the ambitious delivery timelines post-certification.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.