RMC

RMC Switchgears reported a consolidated revenue of Rs. 401.59 crore for FY26, marking a 26.4% growth over the previous year. Despite this top-line growth, overall profitability for the year was lower than expectations. This was primarily attributed to product development investments, project execution delays, and significant input cost pressures. The company did, however, show a recovery in Q4, moving from a net loss of Rs. 7.07 crore in Q3 to a net profit of Rs. 9.3 crore.

A key concern highlighted was the deterioration in working capital, with trade receivables increasing from Rs. 148 crore to Rs. 205 crore. Consequently, cash flow from operating activities turned negative. Management explained that this was largely due to maximum billing and deliveries occurring in March, with payments and installations extending into the next financial year. Challenges with government payment processes also contributed to these issues.

RMC is undergoing a strategic transition, aiming to be recognized as an electrical infrastructure and technology solutions company, moving away from being solely an EPC player in a 'red ocean market'. The focus is now on addressing utility pain points through innovation and differentiated solutions. This pivot includes a goal to increase the B2B revenue mix and reduce dependence on B2G orders.

A central element of RMC's new strategy is PulseBox, an IoT-enabled distribution monitoring solution. This product is designed to improve grid safety, reduce electrical theft, lower technical losses, and enhance visibility into distribution infrastructure. The proof of concept is complete, pilot deployments have been undertaken, and discussions with utilities are progressing towards formal specification and tender evaluation. The potential addressable market for PulseBox-type deployment is estimated at 75 lakh transformers, representing an opportunity of over Rs. 50,000 crore.

The company's current unexecuted order book stands at over Rs. 850 crore, complemented by a tender pipeline exceeding Rs. 1,500 crore. Management sees significant opportunities in India's power sector, driven by government initiatives such as the Rs. 9 lakh crore investment in transmission infrastructure by 2032, RDSS modernization, and the 102 GW requirement for floating solar power. The execution timelines for the order book vary, with electrical EPC taking 2 years, solar EPC 1 year, and product orders 3 months.

Moving forward, RMC's objective is to achieve profitable, sustainable, and high-quality growth, rather than growth at any cost. This involves better project selection, stronger procurement discipline, improved execution oversight, and prudent capital allocation to increase ROI year-on-year. The company expects to achieve positive cash flow and a stronger balance sheet in FY27, with an aspirational revenue target of Rs. 5,000 crore by 2030.