Synergy Green Industries Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Synergy Green Industries reported a challenging Q3 FY26 with revenue and PBDIT declines attributed to plant relocation disruptions, increased operating costs, and customer-side delays. Despite this, the company is progressing with its significant ~₹200 crore Capex plan, including foundry expansion, solar plant, and in-house machining. Management remains optimistic for FY27, guiding for ₹500-700 crores in revenue and 16-20% PBDIT margins, driven by new product segments, full capacity utilization of 45,000 MT, and cost efficiencies from in-house operations.

Highlights

  • Capacity utilization at 89% of existing 30,000-ton capacity.

  • Successful development of 5MW components for Nordex, creating export opportunities.

  • Proto development for Envision completed, with go-ahead for serial supply in FY27.

  • Secured order from L&T for non-wind segment, expected to contribute ₹20-25 crores annually.

  • Facility approval from BHEL for power equipment castings.

  • Captive solar plant operational since Oct 25, saving ₹60-70 lakhs in electricity bills.

  • FY27 revenue guidance of ₹500-700 crores, with PBDIT margins targeted at 16-20%.

Concerns

  • Q3 FY26 total income dropped 4.8% YoY.

  • Q3 FY26 PBDIT dropped 34% YoY to ₹9.62 crores.

  • 9M FY26 PBDIT margins at 13.63% (down from 14.44% in 9M FY25).

  • Higher outsourcing costs due to plant relocation, impacting margins by ~1%.

  • Increased operating expenses, finance costs, and depreciation due to expansion activities.

  • Envision serial production delayed by one quarter (to Q1 FY27) due to commercial discussions.

  • Commodity price volatility impacting margins temporarily with a one-quarter lag.

Key financials

2 periods

Q3 FY26

  • Total Income Growth
    -4.8%
    YoY -4.8%
  • PBDIT
    ₹9.62 Cr
    YoY -34%
  • PBDIT Margins
    10.3%

9M

  • FY26 Total Income
    ₹252.92 Cr
    YoY -4.8%
  • FY26 PBDIT
    ₹34.48 Cr
    YoY -10.2%
  • FY26 PBDIT Margins
    13.6%

What they filed

Q1 FY27: revenue down 10.7%, net profit down 433.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue89 97 97 84 72 −19%92 −5%119 +23%75 −11%
EBITDA13 14 15 11 9 −29%8 −43%10 −33%5 −55%
Net profit4 6 4 3 2 −43%-1 −117%0 −100%-10 −433%
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.

Order book

high confidence

Total value

₹500 Cr

as of 2026-03-31 range

Composition

Mix 3 customers
  • L&T ₹20 Cr 0.2%
  • Adani ₹60 Cr 0.6%
  • Envision 10,000 Tonnes 99.2%

Share of order book by customer, derived from disclosed amounts

Pipeline

deal pipeline tcv

Envision asking for 35,000-40,000 Tonnes, with total requirement of 65,000-70,000 Tonnes.

Cancellations & deferrals

  • deferred: Envision business of ~₹30 crores delayed by one quarter due to commercial discussions.
Management expects a strong order book for the next financial year, with significant contributions from new customers and product segments, despite a one-quarter delay in a key Envision order.

Source: Prepared remarks · Q&A

Capital allocation

medium confidence
  • Capex ₹200 Cr New plan — This year alone, it's almost getting doubled. And again, when we did, we did not go with a full Leverage of our balance sheet. Today, we are at a debt equity ratio of closer to one is to two. Maybe by, if you look at the next financial year, if everything goes right, somewhere around 16-18% kind of margin if you do closer to 500 close plus kind of thing, we may end up in doing early repayment of the sum of the term loans.
    • Foundry expansion and equipment commissioning
    • Captive renewable power plant
    • In-house machining facilities (Phase 1 completed, Phase 2 by Q1 FY27)
    Historically, in the last 13 years, we've done about 200 crores capex. This year alone, we are doing 200 crores capex. Means, it's a 15 years' worth capex we are doing in one year.
  • Debt Debt disclosed
    The long-term borrowings and non-current assets have increased on account of the Capex, or capital advances. ... Today, we are at a debt equity ratio of closer to one is to two. Maybe by, if you look at the next financial year, if everything goes right, somewhere around 16-18% kind of margin if you do closer to 500 close plus kind of thing, we may end up in doing early repayment of the sum of the term loans.
  • Liquidity Liquidity disclosed Short-term borrowings and other current liabilities increased to support production, inventory, and advances for capital purchases.
    Drawing your attention to the short-term borrowings and other current liabilities. There has been a corresponding increase in production as well as inventory to take care of current quarter sales, as well as advances to suppliers on account of capital purchases.

Guidance & targets

Revenue

  • FY26 Revenue Growth Revenue · FY26 · High confidence 5%
    For the full year revenue growth, we're expecting around a 5% increase in the previous year.

    — Shreya Sirgaokar

  • FY27 Revenue Revenue · FY27 · High confidence ₹500-700 crores
    Okay, so 500 crores plus for the next year is in tech, as of now. V Srinivasa Reddy: Yes, absolutely, absolutely. ... The kind of projections customer has given this order book exceeds 650 to 700 crores.

    — V Srinivasa Reddy

Margin

  • FY26 PBDIT Margins Margin · FY26 · High confidence 14%
    For the full year FY26, margins are predicted to be around 14%, considering the ongoing expansion activities.

    — Shreya Sirgaokar

  • FY27 PBDIT Margins Margin · FY27 · High confidence 16-20% plus
    See, at least I expect minimum 16% plus kind of the margins for the... as far as the next financial year is concerned, actually, no. ... Probably, if you look at the second half of the quarter, we may be clocking 18-20% kind of thing... So, sir, let's say when we are in Q4 of next year, when we will have the full capacity running at full steam, and you would have the machining also in place, is it fair that you would be somewhere closer to the 20% mark in terms of margins? V Srinivasa Reddy: Yes, absolutely, you're right.

    — V Srinivasa Reddy

  • Machining Contribution to Bottom Line Margin · Ongoing · High confidence 3%
    So, in that, we have factored 4-5% passing the points come out, 3% contribution back to our bottom line. This is how we have planned

    — V Srinivasa Reddy

Capacity

  • 45,000 MT Capacity Utilization Capacity · FY27 · High confidence 85-90%
    So, just capacity is getting materialized. So, somewhere around 85-90% capacity, we should be able to utilize in the next year.

    — V Srinivasa Reddy

Cost Savings

  • Solar Electricity Bill Savings Cost Savings · Annual · High confidence ₹60-70 lakhs
    Almost, we are saving around 60 to 70 lakhs worth of the electricity bill on our book.

    — V Srinivasa Reddy

Incentives

  • Maharashtra Government Incentive Incentives · Over 10 years · High confidence ₹29 crores (total), ₹2.9 crores (per year)
    Yes, sir. We have an incentive. It's almost, I think, 29 crores incentive we got. Of course, I want approval, I need to claim over a period of, say, 10 years. So, I am expecting closer to 2.9 crores per year.

    — V Srinivasa Reddy

What to watch in Q4 FY26

Envision order materialization

Q1 FY27
Current Delayed to Q1 FY27
Target Materialization of ~₹30 crores business in Q1 FY27

Why it matters

Crucial for validating management's revised timeline and contributing to FY27 revenue targets.

the whole thing of Envision, which we were anticipating a business in the current year, almost around 30 crores business which we were expecting, that is getting spilled over the Q1 of next year onward section.

Risks & concerns

  • Execution delays due to plant relocation

    high

    Relocating the plant from Unit 1 to Unit 2 caused 'enormous' disruption, impacting Q3 performance and delaying new product ramp-up.

    Management acknowledged

  • Customer commercial discussions delaying order materialization

    medium

    Envision's serial production was delayed by one quarter (to Q1 FY27) due to commercial discussions, impacting Q3 revenue.

    Management acknowledged

  • Commodity price volatility impacting margins

    medium

    Recent 8-10% increase in commodity prices (Jan onwards) temporarily impacts margins, with customer price adjustments having a one-quarter lag.

    Management acknowledged

  • Increased operating expenses and finance costs from expansion

    medium

    Higher manpower costs, development activities, finance costs, and depreciation have risen due to the ongoing Capex, impacting current profitability.

    Management acknowledged

  • Civil execution delays impacting Capex timeline

    low

    Unanticipated delays in civil work for the Capex project were beyond the company's control.

    Management acknowledged

Q&A highlights

7 direct
Envision order deferral and impact on Q1 FY27 Direct
So, are we saying that this is not cancelled, this has just got postponed? The first quarter, this number will be visible, are we saying this way? V Srinivasa Reddy: Yes, you are right. Yes.

Confirms a significant order was postponed, not cancelled, and is expected to materialize in the next quarter, impacting revenue visibility.

Asked by Niteen Dharmawat

Delay in margin improvement and stabilization of operations Partial
So, the margin improvement that we were talking about is not happening in this financial year, in this quarter. Maybe next quarter onwards, we'll see, or will there be some more time for stabilization of the operations of machining in the foundry? V Srinivasa Reddy: I don't see many other things. It may be a gradual ramp-up, particularly this quarter, we are also not anticipating to go down below the previous quarter, this thing.

Highlights that expected margin improvements are delayed due to ongoing operational stabilization and expansion costs, with a gradual ramp-up anticipated.

Asked by Niteen Dharmawat

Confirmation of FY27 revenue target of ₹500 crores plus Direct
Okay, so 500 crores plus for the next year is in tech, as of now. V Srinivasa Reddy: Yes, absolutely, absolutely.

Reaffirms the company's ambitious revenue target for the next fiscal year, providing clarity on future growth expectations.

Asked by Niteen Dharmawat

Realization of cost savings from solar capex Direct
So, I think the solar capex would already be on stream, so have we seen some meaningful cost-saving, because the internal power generation, or maybe some of the benefit will still take a quarter or two for it to fully reflect? V Srinivasa Reddy: As far as solar is concerned, it is already delivering the results. Almost, we are saving around 60 to 70 lakhs worth of the electricity bill on our book.

Confirms that the solar power plant is already generating significant cost savings, which will positively impact profitability.

Asked by Parth

Timeline for full utilization of 45,000 metric ton capacity Direct
So, if I have to summarize, then can this 45,000 metric ton capacity get fully sweated out by next year? V Srinivasa Reddy: So, somewhere around 85-90% capacity, we should be able to utilize in the next year.

Provides a clear timeline for achieving high utilization of the expanded capacity, which is crucial for revenue growth and operational efficiency.

Asked by Pratik Jain

Impact of customer discounts on margins Direct
it was mentioned that there was some impact on margins because of discount... taking... discount given to the customer. Um, can you please explain what exactly is this? V Srinivasa Reddy: So, that includes the elimination of the logistic cost, that is one, plus the benefit of some of the things which I was mentioned in many of the calls, we wanted to pass on something to the customer. Both put together, so discount was offered.

Explains that discounts are strategic, linked to cost savings from in-house machining and logistics, and are expected to be offset by these efficiencies.

Asked by Pratik Jain

Finance costs and debt reduction plans Direct
are finance costs are consuming a significant portion of our operating profits. So, does the management or do we have any specific plan for debt reduction or some refinancing over these next 12 months? V Srinivasa Reddy: Today, we are at a debt equity ratio of closer to one is to two. Maybe by, if you look at the next financial year, if everything goes right, somewhere around 16-18% kind of margin if you do closer to 500 close plus kind of thing, we may end up in doing early repayment of the sum of the term loans.

Addresses concerns about rising finance costs, linking them to the temporary project phase and outlining a plan for early debt repayment contingent on achieving FY27 targets.

Asked by Sunil Jain

Increased outsourcing costs due to plant relocation Direct
You mentioned that there were increase in outsourcing costs. So, all these costs were related only to machining, or any other roles? V Srinivasa Reddy: So, for example, I was spending hardly 5 rupees per kg in-house, variable cost. I ended up paying 17, 18 rupees per kg, including transportation and paying additional outsourcing cost, no. So, that is another big addition in the last quarter this was the outsourcing activity.

Clarifies the significant impact of temporary outsourcing costs on Q3 margins due to plant relocation, explaining the cost differential.

Asked by Jignesh Vayda

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance Impacted by Expansion Disruptions

Synergy Green Industries reported a challenging Q3 FY26, with total income dropping 4.8% year-over-year and PBDIT declining 34% to ₹9.62 crores. The PBDIT margin for the quarter stood at 10.32%. For the nine months ended December 31, 2025, total income was ₹252.92 crores (down 4.8% YoY), and PBDIT was ₹34.48 crores (down 10.2% YoY), with PBDIT margins at 13.63%. Management attributed this underperformance primarily to disruptions from plant relocation, higher outsourcing costs (₹17-18/kg vs ₹5/kg in-house), increased operating expenses, and a one-quarter delay in a key Envision order.

Significant Capex Underway for Capacity Expansion and Modernization

The company is executing a substantial Capex plan, with approximately ₹200 crores being invested in FY26 alone, equivalent to 15 years' worth of historical Capex. This investment is focused on foundry expansion, equipment commissioning, and establishing in-house machining facilities. Phase 1 of machining is operational, with Phase 2 expected to be commissioned by Q1 FY27. Additionally, a captive 10 MW solar power plant became operational in October 2025, already generating ₹60-70 lakhs in electricity bill savings annually.

Robust Order Book and New Business Opportunities for FY27

Despite current quarter challenges, Synergy Green projects a strong order book for FY27, exceeding ₹500 crores and potentially reaching ₹650-700 crores. Key new business includes an order from L&T expected to contribute ₹20-25 crores annually and an Adani order for 3.3 MW components projected to generate ₹60-80 crores in revenue. The Envision order, though delayed by one quarter due to commercial discussions, is expected to materialize in Q1 FY27, with Synergy Green anticipating a contribution of at least 10,000 tonnes from their 65,000-70,000 tonnes requirement.

Margin Improvement Expected from Operational Efficiencies

Management anticipates PBDIT margins to improve to around 14% for FY26 and further to a minimum of 16% plus, potentially reaching 18-20%, in FY27. This improvement is expected from the full operationalization of in-house machining, which is projected to contribute 3% to the bottom line, and the realized cost savings from the captive solar plant. The company also expects to benefit from a ₹29 crore incentive from the Maharashtra government, translating to approximately ₹2.9 crores per year over ten years.

Strategic Positioning and Market Outlook

Synergy Green is strategically expanding its renewables portfolio and product offerings, including 5MW components for Nordex and power equipment castings for BHEL. The company notes improved competitiveness in the Indian market due to the Yuan-INR relationship and increased demand in the wind sector, partly driven by regulatory changes favoring wind over solar. With 85-90% utilization of its expanded 45,000 metric ton capacity targeted for FY27, the company aims to leverage its state-of-the-art facilities and diversified business interests for sustained growth.

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