Detailed Narrative
Record Financial Performance in FY26
Skipper achieved its highest ever annual revenue of ₹5,552.8 crores in FY26, marking a 20% YoY growth, driven by a 24% increase in the Engineering segment to ₹4,359 crores and the Polymer segment crossing ₹500 crores. Profitability scaled significantly, with full-year PAT growing 42% YoY to ₹207.3 crores, and EBITDA margins expanding to 10.3%. The company also saw improved return ratios, with ROE at 14.1% and ROCE at 21%, while maintaining controlled leverage with Debt-to-EBITDA at 1.6x.
Strong Order Book and Pipeline Despite FY26 Moderation
The company closed FY26 with its highest ever order book of ₹8,501.9 crores, supported by record annual inflows of ₹5,678 crores, with Q4 inflows at ₹1,029 crores. The order book is well-diversified with 90% domestic and 10% export mix, and includes a significant multimillion-dollar order from a North American utility. Despite a temporary moderation in overall industry bidding activity in FY26 due to execution constraints, the bidding pipeline remains robust at over ₹33,000 crores, providing strong future visibility.
Strategic Capacity Expansion and Technological Edge
Skipper is progressing well with its 75,000 tons capacity expansion, aiming to reach 450,000 tons per year by June 2026, with utilization levels currently above 85%. The company also commissioned Test Bed 2, making it the only global company with dual test bed facilities at the same location, enhancing testing capabilities for highest voltage towers and reducing lead times for customers. Further capacity additions of 75,000 tons are planned for FY27 and another 75,000 tons for FY28, with the new capacity expected to add ₹1,000-1,200 crores in yearly revenue.
Conservative FY27 Guidance Amidst Export Headwinds
For FY27, Skipper has provided a conservative revenue growth guidance of 15% and approximately 30% bottom-line growth. This cautious outlook is primarily attributed to ongoing geopolitical challenges🌐 impacting export execution and increased sea freight costs, which are causing customers to delay decisions. However, management expects bidding activity to be robust from next year onwards, with a return to 20-25% growth rates from FY28, as export markets are anticipated to open up later in the year.
Managing Working Capital and Margin Stability
Trade receivables increased to ₹1,485 crores in FY26, partly due to a technical delay of ₹260 crores received in April and a higher share of domestic revenue with longer realization cycles, though ₹600-700 crores were already realized in April. Despite potential inflationary pressures and increased freight costs, management expects to maintain margins, citing a healthy mix of FOB/CIF contracts with force majeure🌐 clauses and firm price contracts with buffers for commodity price increases, aiming for a long-term aspirational EBITDA margin of 12%.
Diversification and Focus on Higher-Value Projects
The company is actively diversifying its export markets beyond the Middle East to North America, Europe, and Australia, having secured a large contract in North America. Domestically, while Power Grid remains the predominant client, Skipper is actively pursuing business with aggressive private players like Adani, Sterlite, and Tata Power. The focus is also on higher-voltage projects (400kV, 765kV) and expanding into substations to increase its total addressable market, which are expected to contribute to margin improvement.