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RMC Switchgears Limited — Q2 FY26 earnings call

Call held 21 Nov 2025

Management summary

RMC Switchgears Limited reported strong H1 FY26 financial results, with significant year-on-year growth in revenue, PAT, and EBITDA, driven by its EPC and Electrical Products segments. The company is strategically pivoting towards becoming a Renewables Infrastructure Integrated Player, supported by a robust order book and the successful POC of its PulseBox system. However, the planned solar module manufacturing plant has been deferred due to market uncertainties, and the company is not providing definitive financial guidance for the upcoming periods.

Highlights

  • Revenue from Operations of ₹221.61 crore in H1 FY26, representing approximately 111.50% year-on-year growth over H1 FY25, reflecting strong execution across business segments.

  • Profit After Tax (PAT) increased significantly by 97.93% year-on-year to ₹20 crore, demonstrating improved profitability.

  • EBITDA rose by 71.46% to ₹34 crore, indicating strong operational performance.

  • The company maintains a healthy order pipeline of approximately ₹825 crore to be delivered over the next 12 months, providing good revenue visibility.

  • Successful completion of the Proof of Concept (POC) for its innovative PulseBox low-tension power distribution system during Q2 FY26, with samples deployed and negotiations underway.

Concerns

  • EBITDA margin stood at 15.34% in H1 FY26, a decrease from approximately 19% in H1 FY25, attributed to a strategic decision to prioritize volume expansion and market share over short-term percentage margins.

  • The planned 1 Gigawatt (GW) solar module manufacturing plant has been deferred due to uncertainties in policy, technology landscape, and the belief that current market conditions would make an equity raise value destructive.

  • Management is currently unable to provide definitive financial guidance for the second half of FY26 and FY27 due to recent strategic changes and market dynamics.

Key financials

  1. Revenue from Operations ₹221.61 Cr +111.5%YoY
  2. PAT ₹20 Cr +97.9%YoY
  3. EBITDA ₹34 Cr +71.5%YoY
  4. EBITDA Margin 15.3%
  5. Debt-to-Equity Ratio 0.59×
  6. Working Capital Cycle 60 days

What they filed

Q1 FY27: revenue down 58.0%, net profit down 54.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q2 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue85 105 164 76 241 +184%18 −83%91 −45%32 −58%
EBITDA14 20 16 7 34 +143%-5 −126%10 −38%6 −8%
Net profit7 10 10 3 20 +186%-7 −175%4 −61%1 −55%
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 Contribution
₹211.61 Cr Total
  • Solar EPC ₹104.46 Cr 49.4%
  • Electrical EPC ₹57.49 Cr 27.2%
  • Electrical Products ₹49.66 Cr 23.5%

Order book

high confidence

Total value

₹825 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹70 Cr

Execution

to be delivered over the next 12 months

Pipeline

qualified rfp

participated in tenders

Cancellations & deferrals

  • deferred: Solar module manufacturing plant deferred due to policy and technology landscape uncertainties.
  • deferred: 42 Gigawatt contract on hold by Central Government, impacting Power Purchase Agreements (PPAs) not EPCs.
The company has a healthy order pipeline and is actively participating in new tenders, expecting a good order book for the next financial year despite some deferrals in strategic projects.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed New plan — deferral of solar module manufacturing plant · internal accruals, selective debt, and operational cash flows
    We will instead fund our growth through internal accruals, selective debt, and operational cash flows.
  • Debt Debt disclosed
    • New borrowing Increase in short-term borrowings to meet working capital requirements for EPC projects.
    Despite this strategic shift, we continue to maintain strong financial discipline, operating with a Debt-to-Equity ratio of 0.59 times and a working capital cycle of 60 days.
  • M&A BES manufacturers Joint venture · Signed · Consideration ₹[object Object] (undisclosed)

    To participate in Battery Energy Storage (BES) tenders and leverage capabilities for EPC.

    We have already secured two to three joint ventures with BES manufacturers, and we are participating in the tenders.
  • Liquidity Liquidity disclosed Other current assets increased due to government retention amounts, which are expected to be released within a year.
    the rise in current assets is due to the retention amount that the government keeps while releasing the payment. They will be released within a year's time, and that is why they are into current assets.

Guidance & targets

Revenue

  • Sales Revenue · by 2030 · High confidence ₹5,000 crore
    We recognize that our long-term aspiration of achieving *5,000 crore in sales by 2030 is ambitious and requires structural scaling with stability.

    — Mr. Ankit Agarwal

Volume

  • Smart Metering Enclosure Segment Growth Volume · until completion · Medium confidence double-digit growth year-on-year
    I believe the smart metering enclosure segment should see double-digit growth year-on-year until it gets completed, because whatever the roadblocks are there, they are getting eliminated. So, I think double-digit growth is quite good enough.

    — Mr. Ankit Agarwal

Order Book

  • Order Book for next financial year Order Book · next financial year · Medium confidence good amount
    Accordingly, we would like to see us going forward into the next financial year with a good amount of order book. I cannot commit the numbers, but yes, whatever we are targeting, we can be sure that we will be entering the next financial year with that order book.

    — Mr. Ankit Agarwal

What to watch in Q3 FY26

Clarity on solar module manufacturing policy and technology

Next quarter/H2 FY26
Current Uncertain, plant deferral
Target Clear policy, stable technology landscape

Why it matters

This decision impacts future growth drivers and capital allocation, and its resolution is key to potential re-evaluation of manufacturing plans.

until and unless we get some clarity on the policies of the cell and the qualities of the cell stabilize. So, until then, we have already paused the plan.

Risks & concerns

  • Policy and technology uncertainties in solar module manufacturing

    medium

    Domestic cell availability and performance are evolving, and global technologies are shifting rapidly (PERC to TopCon and HJT), risking outdated technology if manufacturing is entered prematurely.

    Management acknowledged

  • Dependency on government order inflows for growth

    medium

    The company's growth is heavily reliant on government orders, although management highlights entry barriers and fair comparison processes in government tenders.

    Analyst acknowledged

  • Competitive pricing pressure in EPC segments

    medium

    Concerns about competing on pricing with larger players in the EPC segment, but management emphasizes RMC's integrated offerings and pre-qualification requirements in government projects.

    Analyst acknowledged

  • Value destructive equity raise for CAPEX

    low

    Issuing equity under current market conditions would be value destructive and dilutive to existing shareholders, leading to the deferral of CAPEX plans.

    Management acknowledged

Q&A highlights

8 direct
Impact of Central Government's 42 Gigawatt contract hold on RMC's order book and FY27 growth outlook. Direct
Whatever orders we have, no impact will be there on the orders. The reason being, whenever we get an order, it is a contract, and a contract cannot be single-sidedly handled by any party. So, no problem is there on the current orders. As far as the further 42 Gigawatt is concerned, they have stopped the Power Purchase Agreements (PPAs) and not the EPCs, which is what we are doing.

Clarifies RMC's specific exposure to the 42 GW contract hold, indicating minimal direct impact on current EPC orders and outlining strategy for future order inflows.

Asked by Aman Soni

Deferral of solar module manufacturing plant and its impact on growth plans for H2 FY26 and FY27. Direct
The module manufacturing plan, we have paused, we have deferred; we have not eliminated the thing. We will be doing it, that is sure. Since there are so many policy changes, and the cells are not generating the proper power—the Indian cells—we believe that the Indian government will come with some challenges or policies or amendments in policies.

Explains the strategic rationale behind deferring a major capital expenditure, highlighting policy and technology uncertainties in the solar module sector and its effect on future growth projections.

Asked by Aman Soni

RMC's positioning as a product vs. EPC vs. solution company and dependency on government orders. Direct
I think it is better to see RMC as a solution company because we are more focused on providing solutions to our customers' problems. The problems we are always talking about are electrocution and electrical theft. So, it is not a product company; it is a solution company.

Clarifies the company's core identity and strategic focus on solving industry problems, while acknowledging its reliance on government order inflows.

Asked by Aman Soni

Competitive landscape and pricing strategy in the EPC segments, especially against larger players. Direct
The problem is not with the big companies; the problem is with the small companies when you have to compete with them. But there comes a benefit of working in government because there is an entry barrier in government, which is known as pre-qualification requirements. The government wants to compare the price of "apple to apple" and "peer to peer.

Addresses concerns about competitive pressures and explains how RMC leverages its credentials and the government tender process to maintain profitability and win orders.

Asked by Vinay Lakhera

Status of PulseBox commercialization and interest from private players. Direct
As I have mentioned in my opening remarks, the POC has been completed, and currently the samples have been deployed under various states, and they are being tested. Negotiations are being done, and technical specifications are being designed. Since all the procurement happens in the government through tendering, we will have to wait for the formal sales velocity. It might take six to eight months until we get some orders.

Provides a detailed update on the commercialization timeline for PulseBox, a key innovative product, and clarifies the company's cautious approach to engaging private players initially.

Asked by Abhishek Agarwal

Update on the water management subsidiary and geographic diversification strategy. Direct
Secondly, the water management subsidiary has been now pulled for the Kusum project. The Kusum project is being developed under that subsidiary. Water projects have been put on hold because when we started water projects, we were not hoping for such big opportunities in the electrical sector as what we see now. So, I think first we should work completely on the electrical sector.

Explains the strategic decision to refocus on the electrical sector, leading to the de-emphasis of the water management subsidiary, and clarifies the current focus on pan-India presence.

Asked by Manav Mehta

Reasons for the increase in other current assets and short-term borrowings. Direct
the rise in current assets is due to the retention amount that the government keeps while releasing the payment. They will be released within a year's time, and that is why they are into current assets. The increase in short-term borrowings means that we have taken these short-term borrowings to meet the creditor payment days because of the working capital requirement in EPCs; we need money for that.

Provides transparency on changes in the balance sheet, explaining the drivers behind increased current assets and short-term debt, and reassuring that the debt-to-equity ratio remains under control.

Asked by Hriday Jain

Explanation for the decline in gross margins (EBITDA margin). Direct
The change in margin is a strategic decision at this stage of our growth. We are positioning scale and absolute profit, rather than margin percentage, actually. This is a temporary dilution which is intentional and aligned with our broader execution plan. Our bidding is continuing to remain disciplined, and we are not taking any low-margin projects out of pressure.

Clarifies management's strategic rationale for the observed margin compression, linking it to a deliberate focus on volume expansion and absolute profit growth in key segments, rather than aggressive bidding or poor cost management.

Asked by Pranav Bohra

3 min read 7 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

RMC Switchgears Limited reported robust financial results for H1 FY26, with Revenue from Operations reaching ₹221.61 crore, marking a significant 111.50% year-on-year growth over H1 FY25. Profit After Tax (PAT) increased by 97.93% year-on-year to ₹20 crore, while EBITDA rose by 71.46% to ₹34 crore. The company maintained strong financial discipline with a Debt-to-Equity ratio of 0.59 times and a working capital cycle of 60 days, reflecting efficient management amidst growth.

Strategic Transition and Business Model

RMC is strategically transitioning to become a Renewables Infrastructure Integrated Player, focusing on four integrated verticals: Electrical Products, Electrical EPC, Solar EPC, and Solar Products. The company's business model is centered on providing solutions to critical electrical industry problems like theft and electrocution. In H1 FY26, Solar EPC contributed 52% (₹104.46 crore) of total revenue, Electrical EPC 26% (₹57.49 crore), and Electrical Products 22% (₹49.66 crore), showcasing a diversified revenue stream.

Solar Module Manufacturing Deferral

RMC has deferred its plan to set up a 1 Gigawatt (GW) solar module plant following a detailed review of the policy and technology landscape, including upcoming DCR cell requirements and shifts from PERC to TopCon and HJT technologies. Management stated that entering manufacturing during this transition risks locking into outdated technology and that issuing equity for funding would be value destructive. The company will instead fund its growth through internal accruals, selective debt, and operational cash flows.

Order Book and Pipeline

The company currently holds a healthy order pipeline of approximately ₹825 crore, which is expected to be delivered over the next 12 months. RMC has actively participated in tenders worth ₹1,500 crore and is L1 in tenders worth ₹70 crore, awaiting the Letter of Award (LOA). Management indicated an order conversion ratio of 30-35% of bids, expressing confidence in securing a good order book for the next financial year and maintaining strong execution capabilities.

PulseBox Development and Market Opportunity

RMC's innovative low-tension power distribution system, PulseBox, successfully completed its Proof of Concept (POC) during Q2 FY26. The system is designed to enhance grid safety and deter electricity theft. Samples have been deployed under various states for testing, and negotiations are ongoing, with formal sales velocity expected in six to eight months. The total addressable market for RMC, including transmission, distribution (RDSS Part 2), and solar, is estimated at ₹20 lakh crore, with even a 1% conversion representing a huge opportunity for the company.

Human Capital and Governance Enhancements

RMC has made significant strides in strengthening its human capital and leadership, appointing Mr. Samujjal Ganguly as Business Head of RMC Green and Mrs. Shivani Bairathi as Compliance Officer. Mrs. Neha Agrawal assumed the additional charge of Chief Financial Officer. The company also inducted two senior professionals in its financial and accounts department and implemented an ESOP policy to align employee growth with the company's, ensuring robust oversight and operational rigor as it scales.

Capital Allocation Strategy and Market Visibility

The company emphasizes disciplined capital allocation, directing resources towards high-return areas like strengthening its EPC engine, expanding electrical product portfolio, and developing IoT-based solutions. RMC is also taking preparatory steps for migration from the BSE SME platform to the BSE Main Board and listing on the NSE to enhance market visibility and engage with a larger investor pool. The increase in short-term borrowings was attributed to meeting working capital requirements for EPC projects, with the Debt-to-Equity ratio remaining well under control at 0.59 times.

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