Servotech Renewable Power System Limited — Q4 FY26 earnings call

Call held 7 May 2026

Management summary

Servotech Renewable Power System Limited reported robust standalone performance in Q4 and full year FY26, driven by significant revenue and EBITDA growth and margin expansion. The company commissioned new manufacturing capacity to support future growth. However, working capital remained a challenge with negative operating cash flow, increased borrowings, and high receivables, particularly from government-related projects. Management is focused on operational consolidation and working capital normalization for FY27.

Highlights

  • Q4 FY26 Standalone Revenue was ₹212.2 crores, growing 76% year on year.

  • Q4 FY26 Standalone EBITDA was ₹23.2 crores, growing 76% year on year.

  • Full Year FY26 Standalone Operating EBITDA was ₹74.2 crores, growing 26.5% year on year.

  • Full Year FY26 Standalone EBITDA margin expanded to 11.6%, up 161 basis points from 9.7% in FY25.

  • ₹64 crore of new manufacturing capacity commissioned, supporting continued growth.

Concerns

  • Operating cash flow was negative for the full year FY26.

  • Standalone borrowing increased from ₹75 crore to ₹196 crore during the year.

  • Trade receivables increased from ₹155 crore to ₹243 crore, with ₹100 crore stuck due to payment delays from OMCs and railway projects.

  • Consolidated revenue for FY26 was broadly flat at ₹674 crore (vs ₹676 crore in FY25) due to a deliberate scale-down of low-margin trading activities in the Rebreathe Medical Device subsidiary.

Key financials

2 periods

Q4 FY26

  • Standalone Revenue
    ₹212.2 Cr
    YoY +76%
  • Standalone EBITDA
    ₹23.2 Cr
    YoY +76%
  • Standalone PAT
    ₹11.7 Cr
    YoY +49%
  • Consolidated Revenue
    ₹219 Cr
    YoY +49%
  • Consolidated EBITDA
    ₹24.2 Cr
    YoY +81%

FY26

  • Standalone Revenue
    ₹637 Cr
    YoY +8.4%
  • Standalone Operating EBITDA
    ₹74.2 Cr
    YoY +26.5%
  • Standalone EBITDA Margin
    11.6%
  • Standalone PAT
    ₹36.3 Cr
    YoY +8.3%
  • Consolidated Revenue
    ₹674 Cr
    YoY -0.3%
  • Consolidated EBITDA
    ₹71 Cr
    YoY +22%
  • Consolidated PAT
    ₹33.5 Cr
    YoY +2.4%
  • EPS
    ₹1.61
    YoY +8%

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

  • Solar Products
    51% Share of Revenue
  • DC Chargers
    15% Share of Revenue
  • AC and Small Chargers
    27% Share of Revenue
  • Energy Storage
    1% Share of Revenue
  • Power
    1% Share of Revenue
  • INC and AMC
    4% Share of Revenue

Order book

low confidence

Pipeline

other

Strong order pipeline for government EPC business, including state EV charging tenders and railway projects.

Management noted a strong order book and pipeline, particularly in government EPC, providing confidence for future top-line trajectory.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹64 Cr this quarter · ₹64 Cr (FY26) planned internal accruals for future CapEx
    • New manufacturing capacity for solar hybrid inverters, grid-tied models, and lithium-ion battery packs. ₹64 Cr
    • Investment in solar PV manufacturing company, asset purchase, and capital expenditure. ₹79 Cr
    Total CapEx for the year was 64 crore. Importantly, this CapEx program is now substantially complete, and it will help us to deliver the growth ahead in FY26-27. We expect twenty-seven CapEx to moderate to a lower run rate funded entirely from internal accruals.
  • Debt 1.9× EBITDA
    • New borrowing Fresh debt taken during the year, contributing to increase in standalone borrowing from ₹75 crore to ₹196 crore. ₹121 Cr
    Our standalone borrowing increased from 75 crore to 196 crore during the year. ... Debt to equity at the year-end, 0.74 times. Net debt to EBITDA is 1.88 times within comfortable lender ranges. Current ratio is 1.5 times. Return on equity is 14.7 percentage. Earning per share basis, 1.61 per share, growing 8 percent year on year. Our credit rating from informerics remains at BBB+ with a stable outlook on the long term and A two one short term. An upgrade received in September 25.
  • Liquidity Liquidity disclosed Operating cash flow was negative for the year.
    Operating cash flow was negative for the year.

Guidance & targets

Working Capital

  • Working Capital Days Working Capital · FY27 · High confidence 60-70 days
    Our target is to bring it down to 60, 70 days.

    — Raman Bhatia

Debt

  • Gearing (Debt to Equity) Debt · FY27 · High confidence below half a turn
    reducing our gearing back below half a turn over the year

    — Raman Bhatia

Receivables

  • Receivable Collection Receivables · FY27 · High confidence industry typical level
    bringing receivable collection back to industry typical level

    — Raman Bhatia

Profitability

  • Operating EBITDA Margin Profitability · FY27 · Medium confidence modestly improve from current level
    Margin expansion in FY26 was structural and we expect to sustain a modestly improve from current level.

    — Raman Bhatia

Revenue Mix

  • Retail Channel Contribution Revenue Mix · FY27 · High confidence more than 50%
    I think that the contribution of the retail channel will be more than 50%.

    — Raman Bhatia

Capacity Utilization

  • Fixed Asset Utilization Capacity Utilization · FY27 · High confidence 100%
    Our target in FY27 is to utilise it 100%. We are working on that.

    — Raman Bhatia

Product Mix

  • Solar vs EV Revenue Share Product Mix · Future · Medium confidence 60% Solar, 40% EV
    But yes, our thought process is very clear the ratio will remain somewhere around 60-40. 60 percent Solar and around 40 percent EV.

    — Raman Bhatia

Market context

  • Operating Cash Flow Operating Cash Flow · FY27 · High confidence positive
    restoring positive operating cash flow

    — Raman Bhatia

What to watch in Q1 FY27

Working Capital Normalization

FY27
Current Negative operating cash flow, 138-140 receivable days, 0.74 debt-to-equity
Target Positive operating cash flow, 60-70 working capital days, gearing below 0.5x

Why it matters

Improvement in working capital is crucial for cash flow generation and reducing debt, which are key management priorities.

Our focus is on three measurable outcomes restoring positive operating cash flow, reducing our gearing back below half a turn over the year, and bringing receivable collection back to industry typical level.

Risks & concerns

  • Negative Operating Cash Flow

    medium

    Operating cash flow was negative for the full year FY26, indicating cash generation issues despite profit growth.

    Management acknowledged

  • Increased Borrowings and Receivables

    medium

    Standalone borrowing increased from ₹75 crore to ₹196 crore, and trade receivables rose from ₹155 crore to ₹243 crore, with ₹100 crore stuck due to payment delays.

    Management acknowledged

  • Lengthened Working Capital Cycle

    medium

    The government EPC business model inherently leads to a longer working capital cycle due to milestone billing, retention money, and performance bank guarantees.

    Management acknowledged

  • Regulatory Restrictions on Forward Guidance

    low

    Management is unable to provide specific forward-looking financial guidance due to SEBI regulations, which can limit investor clarity.

    Management acknowledged

Q&A highlights

4 direct, 2 evasive
Q1 FY27 Financial Expectations Evasive
Sir, I cannot tell you the forward growth plan. I am sorry for the government rules. But all I can say is that we are working with them in a very good way.

Management explicitly declined to provide forward-looking numbers, citing regulatory restrictions, which limits investor visibility.

Asked by Prashant Pardesi

New DC Charger Range Production Percentage Evasive
I cannot give you an answer right now regarding how much it will be or won't be. There are many factors involved here that I won't be able to explain easily over this call. Honestly, I don't even know what you are trying to understand from this or what your objective is behind asking this.

Management was unwilling to quantify the contribution of the new high-capacity DC charger range, indicating either competitive sensitivity or lack of clear internal targets.

Asked by Jitesh Parmar

Working Capital Peak and Stabilization Partial
No, we have already reached the peak. The balance sheets and financial books that are being written by us are peaked from the investor's point of view. But it is not peaked from our point of view because the revenue from the last quarter is more than 200 crores. So, if I assume that there is a revenue of 200 crores and my outstanding is 230-240 crores, out of which 100 crores is in my commissioning project, which is a standard term. So, according to that, my receivable is not even worth of 80-90 days. But if we look at it from the point of view of a standard analyst, then it is around more than 140 days. 138 days.

Management asserted that working capital has peaked from their perspective, but acknowledged that a 'standard analyst' might view the receivable days as high (138-140 days), highlighting a potential disconnect in perception.

Asked by Jitesh Parmar

Equity Dilution or Fundraise Direct
Sir, many things are currently in progress regarding this. Probably some work is going on regarding a QIP. So, we are hoping the market will understand and if things get better, we will definitely do it.

Management indicated that a Qualified Institutional Placement (QIP) is under consideration, signaling potential future equity fundraising.

Asked by Randhir Singh

EV Charging Infrastructure Development Direct
The work is going on. That is why the government has changed the scheme. Now, the work of developing the infrastructure has been given to the private parties. You develop it and we will support you. So, the model has been changed. Now, it has gone to the PPA model.

The government's shift to a Public-Private Partnership (PPA) model for EV charging infrastructure development creates new opportunities for private players like Servotech.

Asked by Randhir Singh

BESS and Battery Pack Manufacturing Value Chain Direct
Sir, you first need to understand this. In India, 99% of batteries are just assembly. Battery packs are strictly assembled because battery cells are not made in India. In fact, they aren't made anywhere else besides China. ... So, we feel we are standing in a good place because our product has been approved by ICAT, and work is ongoing on other specifications, so it seems we will get all the certificates very soon.

Management clarified that Indian battery manufacturing is primarily assembly, with Servotech adding value through BMS, software, and mechanical design, and highlighted ICAT approval as a key milestone.

Asked by Jitesh Parmar

Working Capital Days Improvement Direct
Absolutely. Sir, I have repeated the points for improvement multiple times. I would like to repeat them once more and tell you again that this is why we are looking at a major business diversion or the next growth coming from the retail channel and channel distribution, so that working capital becomes even better. Our target is to bring it down to 60, 70 days.

Management reiterated its commitment to improving working capital days to 60-70 by shifting focus towards the retail and channel distribution segments, which have shorter cycles.

Asked by Randhir Singh

3 min read 7 chapters

Detailed narrative

Strong Q4 and Full Year FY26 Standalone Performance

Servotech reported a robust Q4 FY26 with standalone revenue growing 76% YoY to ₹212.2 crores and standalone EBITDA also increasing 76% YoY to ₹23.2 crores. For the full year FY26, standalone revenue reached ₹637 crores, an 8.4% YoY growth from ₹587 crores in FY25. Operating EBITDA for FY26 stood at ₹74.2 crores, marking a 26.5% YoY increase, with the EBITDA margin expanding by 161 basis points to 11.6%, the highest in the company's listed history.

Consolidated Performance and Subsidiary Scale-down

On a consolidated basis, FY26 revenue was ₹674 crores, broadly flat compared to ₹676 crores in FY25. Consolidated EBITDA grew 22% to ₹71 crores, while PAT attributable to shareholders was ₹33.5 crores, in line with FY25's ₹32.7 crores. The flat consolidated revenue was attributed to a deliberate scale-down of low-margin trading activities in the Rebreathe Medical Device subsidiary, whose revenue declined from ₹98 crores in FY25 to ₹32 crores in FY26. Excluding this subsidiary, consolidated revenue grew approximately 12% YoY.

Operational Capability Building and Product Mix Shift

FY26 was a year of significant capability building, with ₹64 crores invested in commissioning a new manufacturing line for solar hybrid inverters, grid-tied models, and lithium-ion battery packs. This CapEx program is largely complete and is expected to support growth in FY26-27. A structural shift towards solar inverters and higher capacity DC chargers (120kW to 360kW) and BESS contributed to a 200 basis point margin expansion, which management expects to sustain or modestly improve.

Retail Channel Expansion and Brand Building

The company's retail channel has seen substantial growth, increasing from ₹2 crores per month in FY22 to approximately ₹25 crores per month in FY26. To support this scaling, Servotech has engaged a brand ambassador, launched TV advertisement campaigns, and undertaken extensive marketing activities. Investments in cricket through the Siliguri Strikers franchise and group entities like Servotech Sports and Entertainment are also supporting retail channel scale-up.

Working Capital Challenges and Normalization Plan

Servotech faced working capital challenges in FY26, with standalone borrowing increasing from ₹75 crore to ₹196 crore and trade receivables rising from ₹155 crore to ₹243 crore. Operating cash flow was negative for the year. Approximately ₹100 crore of receivables are stuck due to payment delays from oil marketing companies and railway projects. For FY27, management's focus is on restoring positive operating cash flow, reducing gearing below half a turn, and bringing receivable collection back to industry typical levels, targeting 60-70 working capital days.

Future Outlook and Strategic Focus

For FY27, Servotech anticipates strong demand across its solar, inverter, and DC charger segments, driven by government EV infrastructure rollout and BESS applications. The year will focus on operational consolidation, leveraging FY26 capacity additions. Management expects margin expansion to be structural and aims for modest improvement. The company plans to fund future CapEx entirely from internal accruals and targets a product mix of 60% Solar and 40% EV.

Battery and EV Charger Manufacturing Strategy

Management clarified that Indian battery manufacturing primarily involves assembly, as cells are not made in India. Servotech adds value through Battery Management Systems (BMS), software, mechanical design, and thermal engineering. Their products have received ICAT approval. For EV chargers, the company is focusing on high-capacity chargers (120kW to 360kW, and even 1MW) for large vehicles, noting that 70-80% of the manufacturing process for EV chargers and solar inverters is common.

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