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Macfos Limited — Q2 FY26 earnings call

Call held 31 Oct 2025

Company page: Macfos share price, financials & guidance record

Management summary

Macfos reported a strong H1 FY26 with INR 129 crores in revenue, INR 15.5 crores EBITDA, and INR 10.2 crores PAT. Excluding one-time orders, revenue grew 71% YoY, and average order value increased 27%. The company continues to focus on expanding its product portfolio, strengthening IT infrastructure, and growing its Robu 2.0 proprietary product segment, particularly in drones, which currently contributes less than 2% of total revenue but offers higher gross margins of over 35%.

Highlights

  • H1 FY26 total revenue reached INR 129 crores, demonstrating strong overall performance.

  • EBITDA for H1 FY26 stood at INR 15.5 crores, indicating healthy operational profitability.

  • PAT for H1 FY26 was INR 10.2 crores, reflecting solid bottom-line results.

  • Excluding one-time bulk orders from H1 FY25, revenue grew an impressive 71% year-on-year in H1 FY26.

  • Average order value increased by 27% in H1 FY26 compared to the previous half-year, driven by higher volumes from repeat and corporate customers.

Concerns

  • PAT declined marginally by 1% quarter-on-quarter (Q2 FY26 vs Q1 FY26) due to temporary factors like promotional offers and salary revisions.

  • Management acknowledged potential future margin pressure on bulk orders due to increasing competition in the electronics distribution industry.

Key financials

  1. Total Revenue ₹129 Cr
  2. EBITDA ₹15.5 Cr
  3. PAT ₹10.2 Cr -1%QoQ
  4. Gross Margin (Overall) 25%
  5. Gross Margin (Robu 2.0) 35%
  6. Average Order Value Growth 27%

What they filed

Q1 FY27: revenue up 37.2%, net profit up 17.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue90 46 63 59 68 −24%79 +72%102 +63%81 +37%
EBITDA9 4 6 7 7 −19%8 +115%15 +126%9 +16%
Net profit6 3 5 5 5 −19%6 +104%10 +105%6 +17%
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.

Capital allocation

low confidence
  • Capex Capex disclosed
    So right now on table, at least there is no question of the new capex in machineries or some big investment like that in factories because we are just getting started. We don't have much of the revenue. Just to give you an idea, if you look at a simple PCB, we have some modules which looks like a PCB and some components on it. So we are getting the PCB manufactured from outside.
  • Debt Debt disclosed
    So, I mean, generally what happens is we don't get an opportunity that, suddenly we have to go for maybe INR100 crores extra debt. I mean, that's outrageous. It will never happen. So, it is generally in tune of the overall revenue that we are doing. And we just take the decision as and when required. So, our main focus is on increasing revenue and with profitability. So, for that, whatever debt is required, I mean, if we are willing, we are confident that we'll be able to pay to banks and still make margins. Why not?

Guidance & targets

Revenue

  • Revenue Growth (excluding one-time orders) Revenue · next couple of years · High confidence 50% CAGR
    Yes, we have always said this that we are confident about our historic growth and we'll be able to maintain that growth. ... And next two to three years, we believe that we'll be able to continue on a similar growth path.

    — Atul Dumbre

Profitability

  • PAT Margin Profitability · ongoing · High confidence around 8%

    Previously 8% to 10% → around 8%

    PAT margins also, we want to take we want to maintain around 8%. That's our target.

    — Atul Dumbre

  • EBITDA Margin Profitability · ongoing · High confidence maintain EBITDA level margins
    So we generally avoid giving any future guidance, but we are confident to maintain the EBITDA level margins.

    — Atul Dumbre

Costs

  • Employee Salary as % of Total Revenue Costs · year-on-year · Medium confidence keep on reducing it a bit by bit
    And the percentage -- the important thing is what is the percentage of the employee salary in total revenue that we have. So that we always have our eye on. And year-on-year, we keep on reducing it a bit by bit.

    — Atul Dumbre

  • Marketing Budget as % of Revenue Costs · ongoing · High confidence never cross a certain percent
    So our marketing is bound to the maximum limit of our revenue. So we don't want to go about certain percentage of our revenue in marketing. That is the internal policy. So you'll see marketing growing as the revenue grows, but we will never cross the marketing budget by a certain percent.

    — Atul Dumbre

What to watch in Q3 FY26

Robu 2.0 Revenue Contribution

next quarter / H2 FY26
Current <5% (possibly <2%) of total revenue
Target Increased contribution, indicating market acceptance and scaling

Why it matters

Robu 2.0 is a strategic focus for higher margins and competitive advantage; its growth is key to future profitability.

So in Robu 2.0, we have been launching new products consistently. I think right now, we have around 300-plus products in Robu 2.0, which is developed products developed by us. I'm not probably even talking about the pro range brand products which are OEM. Our own developed products, we have more than 300 plus. And we have now almost focused on the -- like majority of our efforts in Robu 2.0.

Risks & concerns

  • Margin pressure from competition on bulk orders

    medium

    As the electronics industry grows, more players will enter, potentially leading to lower margins on large bulk orders.

    Management acknowledged

  • Market acceptance and response for Robu 2.0 products

    medium

    Robu 2.0 is still in early stages, with focus on building products and gaining market acceptance rather than immediate revenue targets.

    Management acknowledged

  • SKU growth not directly proportional to revenue

    low

    Adding many small-value SKUs, especially components, does not always translate directly to proportional revenue growth, though it builds a comprehensive portfolio.

    Management acknowledged

  • Temporary factors impacting PAT

    low

    PAT declined marginally QoQ due to promotional offers during Independence Day sales and salary revisions, which are temporary.

    Management downplayed

Q&A highlights

6 direct
Strategy for 'kitting' in the electronics industry and increasing average order value Direct
We also have launched a BOM tool, which will help you upload an Excel and get the bulk availability and price by including extra rather than one to one. So, yes, so we are looking at this industry right now, not much, but we have plans to support the contract manufacture.

Analyst inquired about a potential strategic shift to 'kitting' to increase average order value, and management confirmed plans to support contract manufacturers with tools like BOM.

Asked by Praneet, Individual Investor

Revenue split and gross margins between Robu 1.0 and Robu 2.0 Partial
No, we are I mean we don't have plans to give that. We said last time, I think that the Robu 2.0 volumes are insignificant. I think less than 5% of our total revenue. So that is the number that we have given. ... When we are doing Robu 2.0, our margins are in the range of 10% plus at least, so around 35% plus.

Analyst sought clarity on the financial contribution of the newer Robu 2.0 segment, and management reiterated its small revenue share but highlighted its significantly higher gross margins.

Asked by Praneet, Individual Investor

Factors driving the 27% increase in average order value Direct
One is the products -- it's always a factor of what products people are purchasing and what segments are doing better for us and not so good for us in this particular H1 or quarter. Second is we have seen that repeat and corporate customers are buying higher volumes. So that is also an impact on average order value.

Analyst questioned the significant jump in average order value, and management attributed it to a combination of product mix and increased purchasing volumes from repeat and corporate customers.

Asked by Kiran, TableTree Capital

Relevance of SKU count growth to revenue growth Direct
the number of SKUs is not directly proportional to the revenue that we do or the company's grow. It depends on what sector. ... However, we have been consistently saying that this current SKU growth is because we are focusing on the component segment, which has very small, small components with a smaller size. But to have a complete portfolio, you have to add at least around 100,000 SKUs and then see.

Analyst questioned the utility of reporting SKU count given its indirect relation to revenue, and management clarified that SKU expansion is strategic for building a comprehensive portfolio, especially in component segments.

Asked by Kiran, TableTree Capital

Main board listing plans and timeline Partial
So, yes, we know that till March we cannot, I mean that's out there and open that we have to wait for three years. And even all situations, we have discussed this topic, but we have never discussed this in detail. ... So it's not on the table right now. Let's see how it goes.

Analyst inquired about the company's plans for main board listing, and management confirmed eligibility after March 2026 but stated it's not a current priority and they haven't detailed the pros and cons.

Asked by Kiran, TableTree Capital

Nature of Robu 2.0 drone products, competition, and future plans for consumer drones Direct
So we are actually not making any drones as of now, I mean, not for the general customers per se. We are focusing on building some of the drone parts and products with the proprietary technology of our own. And the drones that we are doing for some military/ defense applications, I think we are even not in a position to disclose the details there. ... Not right now. Right now, the part is simple that we are making our own technology.

Analyst sought details on Robu 2.0's drone strategy, and management clarified focus on proprietary drone parts for military/defense applications, not consumer drones, and emphasized building technology and IP.

Asked by Swechha Jain, Whitestone Financial Advisors Private Limited

Capital expenditure plans for Robu 2.0 and manufacturing strategy Direct
So right now on table, at least there is no question of the new capex in machineries or some big investment like that in factories because we are just getting started. ... our key focus is always more on creating IP, developing our products, having the software IP or having the hardware design IP around our own product, the brand IP around our own products.

Analyst questioned capex plans for Robu 2.0, and management stated no significant capex for manufacturing currently, prioritizing IP and product development, with manufacturing outsourced for now due to volume.

Asked by Manav Vijay, MV Investments

Customer behavior regarding brand affinity versus product specifications Direct
So the thing is that customer always has -- I mean, it's not always, I would say, but more often than not, customers have their end application in mind with this product. ... So they're always thinking to get some job done. And we have noticed that they are less brand sensitive.

Analyst asked about customer purchasing drivers, and management indicated customers are less brand-sensitive and more focused on product specifications and functionality for their specific application, which benefits a platform with a wide range of options.

Asked by Chinmay Nema, Prescient Capital

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Macfos reported a robust financial performance for H1 FY26, achieving a total revenue of INR 129 crores. The company's EBITDA for the period stood at INR 15.5 crores, with a PAT of INR 10.2 crores. Excluding one-time bulk orders from the previous year, revenue growth was an impressive 71% year-on-year, demonstrating strong underlying business momentum. However, PAT saw a marginal 1% decline quarter-on-quarter due to temporary factors like promotional offers and salary revisions.

Strategic Focus on Robu 2.0 and Proprietary Products

The company's strategic roadmap continues to be guided by Robu 1.0 (electronics distribution) and Robu 2.0 (proprietary products). Robu 2.0, with over 300 developed products, currently contributes less than 5% (and possibly less than 2%) of total revenue but boasts significantly higher gross margins of over 35%, compared to the overall gross margin of approximately 25%. The primary focus for Robu 2.0 is on building strong fundamentals, developing new products, and gaining market acceptance, particularly in the drone segment, rather than immediate revenue targets.

Product Portfolio Expansion and Average Order Value Growth

Macfos added over 20,000 new products in H1 FY26, significantly broadening its product portfolio to over 100,000 SKUs. This expansion, coupled with increased traction from corporate customers and repeat purchases, led to a 27% increase in average order value compared to the previous half-year. The company also launched a Bill of Materials (BOM) tool to assist contract manufacturers with bulk availability and pricing for discrete components.

Operational Efficiency and IT Infrastructure

To support growth, Macfos is proactively strengthening its IT infrastructure, enhancing order fulfillment capacity, and improving intra- and inter-warehouse management systems. The company emphasizes efficiency in supply chain, warehousing operations, and IT infrastructure as key factors for maintaining margins in Robu 1.0. Inventory rotation cycles are maintained at approximately 4 to 4.5 times a year, indicating efficient inventory management.

Customer Profile and Market Dynamics

Macfos serves a diverse customer base, including educational institutions, government entities, and corporate clients. The company has observed strong growth from its industrial/B2B customer segment over the last five years. Management noted that customers are generally less brand-sensitive and prioritize product specifications and functionality for their applications, which aligns with Macfos' strategy of offering a comprehensive range of products.

No Immediate Capex for Manufacturing

Despite the focus on proprietary products in Robu 2.0, management stated there are no immediate plans for significant capital expenditure on manufacturing machinery or large factories. The current strategy involves outsourcing manufacturing, as volumes are not yet high enough to justify in-house production. The emphasis remains on developing intellectual property (IP) for software and hardware design, which is seen as the core value driver for Robu 2.0.

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