Rishabh Instrum.

Rishabh Instruments reported a consolidated revenue of ₹1,836 million in Q3 FY26, a modest 1.3% YoY growth. However, profitability saw significant improvement, with consolidated EBITDA surging 119.5% YoY to ₹314 million, leading to an EBITDA margin of 17.1%, up 920 basis points from Q3 FY25. Consolidated PAT also increased by 162% YoY to ₹205 million. The company's adjusted EBITDA for the nine-month period reached ₹100.9 crores, already achieving the full-year guidance set at the beginning of FY26.

Management highlighted three key policy milestones: the India-European Union Free Trade Agreement, the Union Budget, and the advancement of the India-U.S. Trade Arrangement. These developments are expected to strengthen India's manufacturing and export ecosystem, improving trade access to the EU and U.S. and enhancing export competitiveness. The government's focus on SMEs, labor-intensive manufacturing, and the proposed ISM 2.0 program for electronic components (₹40,000 crores outlay) are seen as positive structural tailwinds for Rishabh's manufacturing-led growth strategy. Despite these positive developments, the company noted that the previously zero-duty regime for Indian exports to the US is gone, with a flat 18% duty now applicable.

The Electrical and Electronic Instrumentation (EEI) segment, a primary growth driver, delivered a 17.7% YoY growth in Q3 FY26. This segment achieved an adjusted EBITDA margin of 26.6%, surpassing the benchmark of 25%. This strong performance was attributed to a robust product portfolio, favorable product mix, sustained operational efficiency, new product launches, and expanding geographic reach. The company remains confident in achieving 15%-20% top-line growth in this segment by the end of the fiscal year.

The high-pressure die-casting (LUMEL Alucast) segment is undergoing a deliberate transition, gradually reducing exposure to the automotive sector and increasing focus on non-automotive customers. This transition resulted in a 29.1% YoY revenue decline in Q3 FY26 to ₹448 million, and an adjusted EBITDA loss of ₹16 million. Management expects near-term softness to continue but aims to manage the business at break-even EBITDA levels. For FY27, Alucast is projected to have revenues of ₹150-160 crores with a 4-5% EBITDA margin, with a target of double-digit EBITDA by FY28 as new non-automotive projects materialize.

The solar business has sharpened its focus and execution, now operating profitably after a period of losses. The segment is witnessing healthy month-on-month demand, and Rishabh recently secured new orders for its single-phase inverter model. For the current fiscal year, the solar business is expected to generate ₹10-12 crores in revenue. The company aims for sustainable growth of 20-50% over the next three years, with initial growth rates potentially reaching 50-100%.

Work on the Nashik facilities, including two new multi-storied buildings, is progressing as planned and is nearing completion. These facilities are expected to double production capacity and become operational in H2 FY27, supporting rising export demands and long-term growth. R&D remains a strategic priority, with teams across LUMEL, Rishabh, and V&A working on multiple product development initiatives. A five-year strategic roadmap targets generating incremental revenue of up to 50% of current electronic turnover through new product lines, including expansion into the medium-voltage segment.

Beyond Europe, Rishabh is actively expanding its footprint across emerging markets in the Middle East, Africa, and South America, where significant untapped potential is identified. The company is leveraging its existing sales network to accelerate market penetration. In the US market, Rishabh achieved 50% growth this year, reaching $3 million in revenue, and aims to grow this to $5-10 million in a few years. The India business is also expected to grow by close to 30% next year, driven by new opportunities in Cam Switches, Solar, and Test & Measurement Instruments.