Smarten Power Systems Limited — Q3 FY26 earnings call

Call held 6 Mar 2026

Management summary

Smarten Power Systems Limited held an investor meeting to discuss its business, strategy, and growth outlook. The company highlighted its integrated manufacturing, diverse product portfolio, and strong distribution network. Key initiatives include a new manufacturing facility in Jhajjar to double capacity and improve margins, and aggressive geographical expansion. While expecting 20-30% revenue growth and 9-10% EBITDA margins for FY27, the company noted its current heavy reliance on lead-acid batteries and geographical sales concentration.

Highlights

  • Integrated manufacturing of energy storage and power backup solutions with a diverse portfolio of over 370 products.

  • Strong distribution network across 23 states, 2 UTs, and exports to 17+ international markets.

  • Expanding manufacturing footprint with a new facility in Jhajjar, Haryana, expected to significantly increase production capacity and operational efficiency.

  • Entry into battery manufacturing for backward integration, improving margins, supply chain reliability, and quality control.

  • Well-positioned to benefit from global energy transition trends due to integrated product ecosystem and in-house R&D capabilities.

  • Expected 20-30% minimum revenue growth for FY27 and 9-10% EBITDA margins due to operational efficiencies.

Concerns

  • Heavy reliance on lead-acid batteries, contributing 90% of current revenue, despite electronics being compatible with lithium-ion.

  • Significant geographical concentration, with 80% of domestic sales revenue currently coming from Haryana and Uttar Pradesh.

  • New facility benefits (PLI, state benefits) are described as 'small', indicating limited external incentives.

Key financials

  1. Revenue (Qualitative) ₹200 Cr

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue93 87 108 122
EBITDA6 10 7 5
Net profit5 7 6 3
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

  • Electronics (Solar Inverters, Charge Controllers)
    60% Revenue Share
  • Batteries
    30% Revenue Share
  • Solar Panels
    10% Revenue Share

Order book

high confidence

Inflow this quarter

5,000 pieces

Pipeline

L1 awaiting loa

Inquiries for repeat orders

The company has started participating in government tenders and successfully delivered a 5000-piece order, with significant inquiries for repeat orders.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    • New manufacturing facility at Jhajjar, Haryana (civil work 100% completed, fire safety and electrical work ongoing)
    • Machinery for battery manufacturing unit ₹7.5 Cr
    • Machinery for inverter assembly ₹1 Cr
    And I am going to correct you, right now for the battery manufacturing unit, we have machinery around 7.5 crores investment for the machinery for the battery manufacturing plant. And that 1 crore you are right, that is for the inverter assembly only.

Guidance & targets

Revenue

  • Minimum Revenue Growth Revenue · next year (FY27) · High confidence 20-30%
    Actually, for the minimum, we are expecting 20-30% minimum growth next year.

    — Mr. Ravi Dutt

Profitability

  • EBITDA Margin Profitability · next year (FY27) · High confidence 9-10%
    So can we expect around 9-10% of EBITDA margins? Yes, yes, definitely.

    — Mr. Ravi Dutt

Capacity

  • Electronics Production Capacity (Single Shift) Capacity · at new facility · High confidence 1200 units per day

    From 600 units per day today

    Right now we are producing around 600 units per day at present. And over at the new facility, around 1200 units per day on a single shift. Immediately double the quantity. Definitely.

    — Mr. Ravi Dutt

Cost Savings

  • Monthly Rent Savings Cost Savings · upon moving to own building · High confidence ₹20 lakhs
    Around 20 lakhs per month right now for three buildings. So we will save on that cost.

    — Mr. Ravi Dutt

What to watch in Q4 FY26

Jhajjar facility partial commissioning

Within 3-4 months (next quarter)
Current Civil work 100% complete, fire safety/electrical ongoing.
Target Partial 25% production capacity operational.

Why it matters

Indicates progress on capacity expansion, which is a key driver for future revenue growth and operational efficiency.

In the next three to four months, we will shift some partial 25% production capacity to the introductory level there.

Risks & concerns

  • Heavy reliance on lead-acid batteries

    medium

    90% of revenue from lead-acid, while lithium-ion adoption is growing, though electronics are compatible and assembly is easier.

    Analyst acknowledged

  • Geographical concentration of sales

    medium

    80% of domestic sales from Haryana and UP, requiring aggressive expansion into other states for sustained growth.

    Management acknowledged

  • Limited benefits from new facility incentives

    low

    PLI and state benefits for the new factory are described as 'small', implying less financial incentive than potentially expected.

    Management acknowledged

Q&A highlights

8 direct
Revenue bifurcation and product manufacturing strategy Direct
So our 60% revenues come from electronics, like solar inverters, charge controllers. And around 30% revenue comes from batteries. And about 10% revenues come from solar panels. ... our battery manufacturing is in-house. And inverters, solar inverters, everything we do in-house—everything, design, development, production, assembly, everything like bill of material, control, everything is in-house. And solar panel, we are buying from outside.

Clarifies the company's core business, revenue mix, and in-house vs. outsourced manufacturing strategy for different product categories.

Asked by Patel Pahel

Role and strength of in-house R&D Direct
Regarding R&D, sir, basically, a company that has its own in-house R&D has 100% control over its bill of materials. And if there are any issues in after-sales service, then having in-house R&D allows them to quickly take care of those things there. ... My own background is around 20+ years dedicated to the R&D development side, and our other promoter, Mr. Tirath Singh Kheda, who is our senior, has around 30+ years of experience in major companies like Sony, Panasonic, Delta, Emerson.

Highlights the strategic importance of in-house R&D for quality control, service, and innovation, backed by experienced leadership, differentiating Smarten from OEM-dependent competitors.

Asked by Patel Pahel

Comparison with competitors and lead-acid battery focus Direct
Sir, if we talk about revenue now, our R&D portion is basically working on the backend side. The sales side is also important in revenue. ... to sell a product in India, you need three dedicated things: first is your brand value, second is credit to your local market, and third is your after-sales service. ... practically speaking today, around 90% of revenue right now is coming from lead-acid batteries.

Explains the drivers of revenue growth (sales and geographical expansion) and the company's current strong reliance on lead-acid batteries due to market factors like price and GST.

Asked by Patel Pahel

Government tender participation and orders Direct
we have started participating in government tenders, state government tenders, through third parties. In that, there are projects like the Har Ghar Jal Yojana, and we recently delivered a 5000-piece order for Odisha in one shot. From the deliveries we made in Odisha, we are getting inquiries for repeat orders—currently, we just did 5000, and there are inquiries for another 10-15,000 in the backend.

Reveals a new and potentially significant revenue channel through government tenders, with initial success and strong pipeline for repeat orders.

Asked by Patel Pahel

Dependency on imported materials and new Haryana facility timeline Direct
No, sir, there is no dependency for materials from other countries. Only the machinery used for manufacturing or the test equipment involves a one-time investment... For that, sir, the civil work is 100% completed. Fire safety and electrical work is basically going on. In the next three to four months, we will shift some partial 25% production capacity to the introductory level there.

Addresses concerns about supply chain localization and provides a clear timeline for the partial commissioning of the new manufacturing facility, indicating progress on capacity expansion.

Asked by Patel Pahel

Capacity and revenue impact from the new plant Direct
Sir, capacity is going to be just double on a single shift only. Right now we are producing around 600 units per day at present. And over at the new facility, around 1200 units per day on a single shift. Immediately double the quantity. Definitely. ... There will be manufacturing of electronics items only, like solar charge controllers, solar inverters, and normal home UPS.

Quantifies the significant increase in production capacity for key electronics products and links it directly to future revenue growth expectations of 20-30%.

Asked by Patel Pahel

How 200 crores revenue is generated on low plant & machinery investment Direct
For inverters, basically we are doing final assembly, quality, after-sales service, and sales. ... PCB design we do in-house, bill of material procurement, posting of all the components we do in-house. But for the manufacturing of PCB assembly, we do outsource. Similarly, for injection molding... for the manufacturing of plastic parts, we do outsource... for sheet metals... for the manufacturing we do outsource. That's why the requirement of machinery is less because we do require only the assembly line for final assembly lines.

Explains the company's asset-light manufacturing model for electronics, where high-capex processes are outsourced, allowing for significant revenue generation with relatively lower in-house machinery investment.

Asked by Tejas

Capacity to manufacture more lithium-ion batteries Direct
for the lithium batteries, the cell is basically coming from outside India, right? And a company like Smarten or similar companies, they are doing basically just assembly. So setting up the assembly facility for the lithium batteries is much easier as compared to a lead-acid battery manufacturing plant.

Indicates the company's flexibility and ease of adapting to increasing demand for lithium-ion batteries by leveraging an assembly-focused model, despite current lead-acid dominance.

Asked by Patel Pahel

2 min read 5 chapters

Detailed narrative

Company Overview and Product Portfolio

Smarten Power Systems Limited, established in 2014, is an integrated manufacturer of energy storage and power backup solutions. The company offers a diverse portfolio of over 370 products, including solar inverters, UPS systems, batteries, solar charge controllers, and solar panels, catering to residential, commercial, and solar energy applications. Its core business, electronics manufacturing, contributes 60% of revenue, followed by batteries at 30%, and solar panels at 10%.

Manufacturing and R&D Strategy

Smarten employs an asset-light manufacturing model for its electronics, outsourcing PCB assembly, injection molding, and sheet metal work while retaining in-house design, final assembly, quality control, and after-sales service. This strategy minimizes machinery investment, with approximately ₹1 crore for inverter assembly and ₹7.5 crores for battery manufacturing. The company emphasizes its strong in-house R&D, which ensures 100% control over bill of materials, rapid issue resolution, and quick development of new technologies, supported by promoters with 20-30+ years of R&D experience.

Capacity Expansion and Operational Efficiency

The company is expanding its manufacturing footprint with a new facility in Jhajjar, Haryana, where civil work is 100% complete. This expansion is expected to double production capacity for electronics items on a single shift, from 600 units/day to 1200 units/day. A partial 25% production shift is planned within 3-4 months, with parallel operations for about a year. This move to an owned facility will also eliminate approximately ₹20 lakhs per month in rent, contributing to an expected EBITDA margin of 9-10% for the next fiscal year.

Market Strategy and Growth Outlook

Smarten aims for a minimum revenue growth of 20-30% in the next fiscal year (FY27), driven by enhanced manufacturing capabilities and aggressive geographical expansion. Currently, 80% of domestic sales originate from Haryana and Uttar Pradesh, and the company is actively working to expand its presence in other states. Additionally, Smarten has begun participating in government tenders, having delivered a 5,000-piece order for Odisha and receiving inquiries for another 10,000-15,000 units, signaling a new channel for large, repeat orders.

Battery Technology and Market Dynamics

While the company's electronics are 100% compatible with both lead-acid and lithium-ion batteries, approximately 90% of current revenue comes from lead-acid solutions. This is attributed to their lower price, end-of-life resale value, and recent GST regime changes that made lead-acid more competitive. However, Smarten notes that lithium-ion battery assembly is less complex than lead-acid manufacturing, positioning the company to adapt easily if demand for lithium-ion increases, as cells are sourced externally.

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