Sathlokhar

Sathlokhar delivered a robust H1 FY26, achieving a revenue of INR250.21 crores, marking a significant 75.58% year-on-year growth. EBITDA stood at INR38.99 crores, also growing 75.13% YoY, with an EBITDA margin of 15.58% and PAT margin of 11.18%. The company attributes this performance to strong execution momentum and a favorable industry backdrop, including a surge in the industrial and warehousing leasing market and increased private sector capital expenditure intentions, projected to rise near 21.5% in FY 2026.

The company booked INR830 crores in new contracts during H1 FY26, contributing to a current un-executed order book of INR1,117.5 crores, providing 5-9 months of revenue visibility. Key wins included INR338.33 crores for a beverage facility in Andhra Pradesh, INR219.22 crores from Reliance Consumer Products, and INR174.45 crores from Pou Chen Group. The bid pipeline remains strong at INR13,637 crores, with an average bid-to-bid conversion rate of 12-15%. Additionally, INR190 crores in new orders were secured in October, including the first international order of INR35.59 crores from Sri Lanka.

In September 2025, the board approved a preferential issue of INR114 crores, comprising INR95.53 crores via equity shares and INR18.08 crores via fully convertible warrants, both priced at INR4.80 per share. This capital infusion is intended to enhance liquidity and support working capital requirements, which are substantial, requiring INR20-25 crores for every INR100 crores of revenue. The company noted an increase in short-term borrowing to INR36-37 crores in H1, with management expressing a desire for it to return to zero.

Sathlokhar plans to establish a dedicated PEB (Pre-Engineered Building) production facility, investing INR25 crores for land acquisition. This facility aims to significantly enhance monthly capability and capacity to 3,000 metric tons, up from the current 300 metric tons produced from a promoter-owned unit. The first 1-2 lines are expected to be inaugurated by August 31, 2026, with the entire four-line facility operational by the end of 2026. This in-house capability is projected to improve EBITDA and PAT margins by 1-1.5%.

The company is actively working to diversify its client base and geographical presence, aiming for 300 clients by 2027. Currently, 40% of orders originate from Tamil Nadu, 40% from Andhra, and 20% from Maharashtra, with efforts to expand to other states and internationally, as evidenced by the Sri Lanka order. Management expressed strong confidence in sustained growth for the next 15+ years, citing India's overall infrastructure development and available land for industrial projects, particularly in Tamil Nadu.

Sathlokhar employs both tender-based and EPC (Engineering, Procurement, and Construction) models. The EPC model involves a 3-month design and approval phase followed by a 9-month construction period, totaling 12 months for project completion. The company emphasizes careful project selection, avoiding long-lead residential projects, and focusing on fast-track industrial and commercial projects with 12-15 month timelines. The workforce has expanded significantly from 137 own employees pre-IPO to over 580 currently, supported by 4,000 laborers across sites, ensuring execution capability.

The company clarified its relationship with Archivo Infra, a promoter-group proprietary company providing architectural and design services. Management stated that Sathlokhar Synergys pays architectural fees to Archivo Infra Inc., disclosing INR3.1 crores for these services during April-September. The separation of design and execution operations is attributed to differences in work nature and talent management, with the new, larger PEB facility planned to be part of the listed entity.