Servotech Renewable Power System Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Servotech Renewable Power System Limited reported a strong Q1 FY26, with consolidated revenue growing 22% and EBITDA up 26.87%. While consolidated PAT growth was modest at 1.36% due to shareholding sales, standalone PAT surged by 59.18%. The company is strategically pivoting towards solar and energy storage amidst ongoing EV infrastructure challenges in India, while also pursuing global expansion with a new UAE subsidiary and the advisory of Errol Musk. Management highlighted efforts to improve profit margins through backward integration and supply chain optimization.

Highlights

  • Consolidated Revenue surged 22% YoY to ₹13,716.54 lacs in Q1 FY26.

  • Consolidated EBITDA increased 26.87% YoY to ₹1,038.18 lacs.

  • Consolidated Profit After Tax (PAT) grew 1.36% YoY to ₹455.06 lacs.

  • Standalone Revenue grew 28% YoY to ₹12,513.59 lacs.

  • Standalone PAT showed robust growth of 59.18% YoY to ₹755.06 lacs.

  • The company is strategically shifting focus towards solar and energy storage due to EV infrastructure challenges, with solar expected to contribute 60-70% of revenue this year (though Q1 EV revenue was 62%).

  • Servotech is expanding globally, with a new subsidiary planned in UAE before August 15, leveraging Errol Musk as a Global Advisor.

  • The company is developing on-board chargers to become an OEM supplier for EVs, aiming for a fixed market share in India.

Concerns

  • DCR Components Supply Chain Pressure

  • Raw Material Shortage for Project Execution

Key financials

  1. Consolidated Revenue 13,716.54 lacs +22%YoY
  2. Consolidated EBITDA 1,038.18 lacs +26.9%YoY
  3. Consolidated PAT 455.06 lacs +1.4%YoY
  4. Standalone Revenue 12,513.59 lacs +28%YoY
  5. Standalone EBITDA 1,423.17 lacs +63.6%YoY
  6. Standalone PAT 755.06 lacs +59.2%YoY

What they filed

Q1 FY27: revenue up 57.8%, net profit up 77.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue200 216 146 137 106 −47%211 −2%217 +49%216 +58%
EBITDA19 16 12 10 6 −67%28 +73%23 +85%20 +96%
Net profit11 9 8 5 0 −97%16 +69%11 +45%8 +77%
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

  • Customer Mix
    60% Public Sector Sales40% Retail/Channel/E-commerce Sales
  • Product Mix (Q1 FY26)
    62% EV Revenue
  • Product Mix (Expected FY26)
    60% Solar Revenue30% EV Revenue

Guidance & targets

Project Execution

  • 16 MW Solar Rooftop Order for MP Government Project Execution · Q2 FY26 / Q3 FY26 · Medium confidence Execution and updates by last month of Q2 or end of Q3
    I'd say that we can expect the execution and updates on this project by the last month of the second quarter or by the end of the third quarter.

    — Raman Bhatia, Founder & Managing Director

International Expansion

  • UAE Subsidiary Launch International Expansion · Q2 FY26 · High confidence Before August 15
    The company will be started before August 15. That's our plan.

    — Raman Bhatia, Founder & Managing Director

Channel Network Expansion

  • New Channel Partners Added Channel Network Expansion · Ongoing · Medium confidence At least two daily
    On average, we're trying to add at least two channel partners on a daily basis.

    — Raman Bhatia, Founder & Managing Director

Profitability

  • Breakeven Point Profitability · Annually · High confidence Beat breakeven point
    So the first thing we do internally, in terms of management approach, is to ensure we cross our breakeven point.

    — Raman Bhatia, Founder & Managing Director

  • Surpass Previous Year's Performance Profitability · Annually · High confidence Do anything better than last year
    The second is that if we will be able to do anything better than the last year? So the team is engaged to achieve it.

    — Raman Bhatia, Founder & Managing Director

Risks & concerns

  • DCR Components Supply Chain Pressure

    high

    Gap in supply and demand of DCR components from the government is creating immense pressure on the supply chain, expected to impact Q2.

    Management acknowledged

  • Raw Material Shortage for Project Execution

    high

    Shortage of DCL components (raw materials) is causing execution challenges for projects, despite having orders in hand.

    Management acknowledged

  • EV Infrastructure Challenges

    medium

    Government is still working on EV infrastructure, leading to slow progress in the EV business, causing Servotech to focus more on solar for now.

    Management acknowledged

Areas of evasion (1)

  • Specific AC charger unit numbers

Q&A highlights

3 direct
Errol Musk's role and global market expansion strategy Direct
We're planning to tap the global market with him. We're at par in terms of our technology... we've been working with him on some things behind the scenes that we can't disclose yet.

Reveals the strategic intent behind bringing a high-profile advisor and the company's international ambitions, including a new UAE subsidiary.

Asked by Himanshu Mahto

Company's focus shift between EV and Solar segments Direct
Servotech has been focusing equally on both solar and EV however... there are many challenges related to the EV infrastructure that the government is still working on... so we're working slightly more in the solar sector for now.

Clarifies the company's current operational pivot and the underlying reasons (EV infrastructure hurdles), indicating a temporary strategic adjustment rather than a permanent change in profile.

Asked by Neha Malhotra

Dip in consolidated profits despite strong standalone performance Direct
You can see consolidated profits are less this time, there are a few reasons behind it. We sold out a few shareholding,s and when you sell our shareholdings, the profits from it are not reflected in the consolidated report, you can only see that in the standalone reports.

Addresses a potential investor concern about lower consolidated PAT growth compared to standalone, providing a clear explanation related to accounting for shareholding sales.

Asked by Ashim Shah

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Servotech Renewable Power System Limited reported a robust Q1 FY26. On a standalone basis, total revenue surged by 28% YoY to ₹12,513.59 lacs, with EBITDA jumping 63.65% to ₹1,423.17 lacs and PAT growing 59.18% to ₹755.06 lacs. Consolidated performance also showed strong growth, with total revenue increasing 22% YoY to ₹13,716.54 lacs and EBITDA rising 26.87% to ₹1,038.18 lacs. Consolidated PAT, however, saw a more modest growth of 1.36% to ₹455.06 lacs, which management attributed to the sale of some shareholdings not reflected in consolidated reports.

Strategic Pivot Towards Solar & Energy Storage

The company is strategically shifting its focus towards the solar and energy storage segments. While Servotech aims to maintain an equal focus on both solar and EV, current challenges in EV charging infrastructure, which the government is still addressing, have led to slower progress in the EV business. Consequently, the company is temporarily prioritizing the solar sector, with an expectation that solar will contribute 60-70% of total revenue this year, a reversal from previous years. This pivot is supported by initiatives like the acquisition of a 27% stake in Rhine Solar for backward integration and improved profit margins.

Global Expansion and Errol Musk's Advisory Role

Servotech is actively pursuing international expansion, leveraging the advisory role of Mr. Errol Musk, father of Elon Musk, to tap into global markets. The company plans to establish a new subsidiary in the UAE, with operations expected to commence before August 15. This expansion aims to supply EV chargers and solar systems to countries in the Gulf Cooperation Council (GCC) and African regions, seeking benefits from subsidies and treaties to become more cost-effective than China.

Focus on On-Board Chargers for Electric Vehicles

In the EV segment, Servotech is concentrating on developing on-board chargers, which are integral units fitted within electric vehicles during manufacturing. The goal is to become an OEM supplier, securing a fixed share in this critical component segment for all EVs manufactured in India, including two-wheelers, three-wheelers, and e-rickshaws. This strategy aims to establish a strong foothold in the market and address the current reliance on imports, primarily from China.

Supply Chain and Execution Challenges

Despite a strong order book, Servotech is facing execution challenges due to supply chain pressures. Specifically, there is a significant gap in the supply and demand of DCR (Domestic Content Requirement) components, leading to raw material shortages. This issue is expected to create pressure in the second quarter, potentially impacting the full utilization of the company's production capacity. Management is actively working to mitigate these challenges by securing more suppliers and improving backward integration.

Customer and Product Mix

Servotech's customer mix is approximately 60% from the public sector, including government tenders, projects, and PSUs, while 40% comes from the retail market, channel distribution, and e-commerce. Historically, EV contributed 60-70% of total revenue, but the company anticipates a reversal this year, with solar expected to account for 60-70%. However, in Q1 FY26, EV still represented 62% of the total revenue, indicating a potential lag in the expected shift or a temporary fluctuation.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls