Servotech Renewable Power System Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Servotech Renewable Power System Limited reported a period of moderation in Q2 FY26, with consolidated revenue of ₹107.65 crore and PAT of ₹0.3951 crore, reflecting a year-on-year moderation. Management attributed this to evolving market circumstances, including the withdrawal of EV charger subsidies and the impact of GST regime changes on retailer revenue. Despite these short-term challenges, the company highlighted strong capacity for future growth, a robust order book, and active diversification into solar, BESS, and on-board EV chargers, while assuring investors of a bright long-term future.

Highlights

  • Q2 FY26 Consolidated Revenue stood at ₹107.65 crore.

  • Q2 FY26 Consolidated EBITDA was ₹7.44 crore, with a margin of 6.91%.

  • Q2 FY26 Consolidated PAT was ₹0.3951 crore (₹39.51 lacs).

  • H1 FY26 Consolidated Revenue reached ₹244.82 crore, with PAT of ₹4.94 crore.

  • The company possesses capacity to multiply last year's revenue by four times without significant additional infrastructure investment.

  • Strategic expansion includes new solar rooftop projects, international tie-ups in Mauritius and a subsidiary in Dubai, and a partnership with Zhuhai Piwin for BESS manufacturing.

  • The EV charger market experienced a significant slump due to withdrawal of government subsidies, causing projects to halt.

Concerns

  • EV Charger Market Slump due to Subsidy Withdrawal

  • Unusually High Standalone EBITDA Margin

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹107.65 Cr
  • Consolidated EBITDA
    ₹7.44 Cr
  • Consolidated PAT
    ₹0.395 Cr
  • Standalone Revenue
    ₹10.3 Cr
  • Standalone EBITDA
    ₹9.74 Cr
  • Standalone PAT
    ₹2.27 Cr

H1

  • Consolidated Revenue
    ₹244.82 Cr
  • Consolidated PAT
    ₹4.94 Cr

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.

Guidance & targets

Capacity

  • Revenue Multiplication Capacity Capacity · future · High confidence four times last year's revenue
    the area we have for production today, and the investment we have made in infrastructure over the last 6 months, gives us the capacity to multiply last year's revenue by four times without needing significant additional investment in infrastructure.

    — Raman Bhatia, Managing Director

Profitability

  • Q3 FY26 Results Profitability · Q3 FY26 · Medium confidence not be very good
    it is possible that the third quarter's results may also not be very good

    — Raman Bhatia, Managing Director

Market Conditions

  • Duration of Current Situation Market Conditions · next 6-12 months · Medium confidence six months, three quarters, or a maximum of four quarters
    This current situation is very short-term. It might last six months, three quarters, or a maximum of four quarters

    — Raman Bhatia, Managing Director

Risks & concerns

  • EV Charger Market Slump due to Subsidy Withdrawal

    high

    Government policies have changed, withdrawing hardware subsidies, causing nearly all EV charger projects to come to a standstill and creating a market vacuum.

    Management acknowledged

  • Unusually High Standalone EBITDA Margin

    high

    Q2 FY26 standalone EBITDA of ₹9.74 crore on a revenue of ₹10.3 crore implies an EBITDA margin of 94.56%, which is highly unusual for an operating business and warrants further clarification.

    Analyst not addressed

  • Impact of GST Regime Changes on Retailer Revenue

    medium

    Changes in the GST regime caused many purchases to be delayed, leading to a significant drop in revenue from 4,000 retailers (revenue dropped to 10% of what it was).

    Management acknowledged

  • Continued Short-term Financial Underperformance

    medium

    Management stated that Q3 FY26 results 'may also not be very good,' indicating that the current moderation could persist for another quarter.

    Management acknowledged

Q&A highlights

3 direct
Impact of government policy changes on EV charger market and order pipeline from oil & gas companies Direct
EV charger market has seen a significant slump (or 'plummet') in the last 4-6 months... government policies have changed considerably. They have withdrawn all the subsidies previously provided on hardware. Now, there are no subsidies, which has caused nearly all projects to come to a standstill.

This question revealed the significant headwinds in the EV charger segment due to policy changes and subsidy withdrawals, directly impacting the company's order pipeline from major clients like HPCL, BPCL, and Adani Total Gas.

Asked by Amitabh Vatsya

R&D department size, budget, and focus areas Direct
Regarding our R&D team, we have approximately forty to fifty people... any work that someone else can do for 10 crore, we are capable of doing that project for less than one-third or one-fourth of the cost. Therefore, the work that should cost 100 crore, we can do for 25 crore.

The response provided specific details on the company's R&D capabilities, team size, and a unique claim of high cost-efficiency in innovation, indicating a strategic advantage in product development across EV chargers, inverters, and BESS.

Asked by Harish Chandra Singh

Investor concerns regarding recent share price drop and lower profitability Direct
The drop that is visible today seems like a drop to them because they are not looking back beyond one, two, or four quarters... This is the stage where we are currently paused. The most important growth we need to achieve now is figuring out how we can take a very big leap from here, and we are working on exactly that.

This was a critical question addressing investor sentiment. Management provided a comprehensive historical context of the company's growth cycles, explained the strategic reasons for the current 'pause,' and offered strong assurances about the company's future and consistent promoter commitment, aiming to reassure long-term investors.

Asked by Gaurav Thakur

3 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance and Moderation

Servotech Renewable Power System Limited reported a period of moderation in Q2 FY26. Consolidated revenue stood at ₹107.65 crore, with an EBITDA of ₹7.44 crore (6.91% margin) and PAT of ₹0.3951 crore. For the first half of FY26, consolidated revenue was ₹244.82 crore and PAT was ₹4.94 crore. On a standalone basis, Q2 FY26 revenue was ₹10.3 crore, EBITDA ₹9.74 crore, and PAT ₹2.27 crore. Management acknowledged these results reflect a 'year-on-year moderation' and 'temporary softness' in revenues and profitability.

Strategic Initiatives and Market Diversification

Despite the current moderation, Servotech highlighted several strategic developments. The company secured multiple large-scale solar rooftop projects from Indian railways and state government agencies. International expansion is underway with significant tie-ups in Mauritius and a new subsidiary in Dubai. A partnership with Zhuhai Piwin aims for indigenous manufacturing of battery energy storage systems (BESS). Furthermore, customer service has been enhanced with an AI automated warehouse in Sonipat, and Mr. Sonu Sood has been appointed as a brand ambassador to expand grassroots market reach.

Challenges in the EV Charger Market

A significant headwind for the company is the 'plummet' in the EV charger market over the last 4-6 months. Management explicitly stated that government policies have changed, withdrawing all subsidies previously provided on hardware, which has caused nearly all projects, including those from HPCL, BPCL, and Adani Total Gas, to come to a standstill. The company is now focusing on buses, larger vehicles, and exports in the EV space, while also expanding its own Servotech EV Infra charging station network.

R&D Capabilities and Efficiency

Servotech maintains a dedicated R&D department with approximately 40-50 engineers and senior engineers, supported by tie-ups with various IITs and several patents. The company prides itself on efficiency, claiming to execute projects that would cost ₹100 crore for others at just ₹25 crore. Current R&D efforts are focused on manufacturing advanced EV chargers, upgrading grid-tied inverters up to 30 kW, developing hybrid inverter technology, and working on Lithium batteries and on-board chargers for two-wheelers and e-rickshaws.

Addressing Investor Concerns and Long-term Outlook

Management directly addressed investor concerns regarding the recent dip in share price and profitability. Raman Bhatia provided a historical perspective, noting that the company has experienced similar 'pauses' in its 21-year journey (e.g., stuck at ₹3 crore, then ₹40-50 crore revenue bands). He explained the current moderation as a necessary phase for 'tuning' infrastructure, manpower, and after-sales service for future scalability. He assured investors of a 'very bright future' and emphasized that promoter shareholding has continuously increased since the company's listing, demonstrating strong confidence.

Operational Adjustments and Short-term Challenges

The company is actively working on improving systems and processes for scalability, including recently separating its warehousing. However, changes in the GST regime led to delayed purchases, causing revenue from 4,000 retailers to drop to 10% of its previous level. Despite these operational challenges, management stated that the 'orders in hand (order book) are quite strong.' The current situation is expected to be 'very short-term,' lasting 'six months, three quarters, or a maximum of four quarters,' with Q3 FY26 results potentially 'not very good,' but the company remains confident in achieving its long-term plans.

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