Rishabh Instruments Limited

Rishabh Instruments reported a robust start to FY26 with consolidated revenues growing 12.4% year-on-year to INR 190.3 crores. Profitability surged significantly, with consolidated Adjusted EBITDA expanding 950 basis points to 15.9% and PAT increasing more than six-fold to INR 19.6 crores. This strong performance underscores the resilience of the business model and operational discipline implemented by the company.

A standout achievement this quarter was the successful turnaround of Lumel Alucast, the High-Precision Die Casting (HPDC) segment. It posted 10.3% revenue growth to INR 75.4 crores and returned to a double-digit EBITDA margin of 10.2%, a 1,600 basis point improvement compared to losses in the prior year. This recovery was driven by exiting low-margin EV automotive contracts, renegotiating legacy contracts, and focusing on high-margin non-automotive segments, with a target mix of 75% non-automotive and 25% automotive, aiming for 12-16% EBITDA margins.

Rishabh India (standalone) delivered stellar results, with revenues growing by an impressive 17.3% year-on-year to INR 61.8 crores. Standalone EBITDA margins reached a staggering 24.5%, and PAT surged by 139% year-on-year to INR 9.9 crores. This growth was fueled by strong market demand, rising export demand, and robust domestic order inflow, supported by enhanced product mix, operational efficiencies, and operating leverage.

The company streamlined its operations into two clearly defined segments: Electrical and Electronic Instruments (EEI) and High-Precision Die Casting (HPDC). This reorganization aims to sharpen segment-level strategies, accelerate innovation, and better align with emerging market opportunities. The EEI segment, which includes Rishabh India and Lumel SA, showed strong performance in areas like Electrical Automation, Metering, and Control.

The solar inverter business, currently generating about INR 1 crore annually and operating at zero profit, has undergone a significant redesign to enhance competitiveness and margins. The company launched Solar UNO, a single-phase inverter, and redesigned 3-phase inverters up to 12kW. Management aims to grow this business from INR 1 crore to INR 2.5 crores annually in the short term, with a target of INR 10 crores in 2-3 years, by aggressively competing on cost and technology.

Rishabh Instruments commissioned a new Surface Mount Technology (SMT) line in India, which has successfully completed pilot batch productions for laptop motherboards. An order for 1,000 units has been secured, but large-scale commercialization is pending Intel approval. This venture represents a high-value opportunity, with the potential to fully occupy one SMT line and compete with established players from China.

Lumel SA's revenues declined by 6.1% year-on-year to INR 46 crores, influenced by external pressures^🌐 such as a shift in government spending towards defense. However, the company secured a significant EUR 5 million multiyear contract with a leading German energy sector firm, running through 2026, which is expected to offset sales drops and drive future growth. Management expressed confidence in Lumel SA's profitability, anticipating a much improved Q2.

The company is targeting significant growth in the US market, aiming for $3.5-4 million in FY26, up from $2 million in the last closed fiscal year, with an ambition to reach $10 million in 2-3 years. Despite current India-US tariffs being 25% + 25%, management believes their products remain competitive. They are exploring strategic options, including potential manufacturing in Mexico, to mitigate tariff impact^🌐s and optimize logistics for long-term growth.