Detailed Narrative
Robust Q1 FY27 Financial Performance
Supreme Power Equipment Limited commenced FY27 on a strong note, reporting a total income of INR48.31 crores, marking a 37.33% year-on-year growth. EBITDA for the quarter stood at INR8.89 crores, an increase of 32.2% YoY, with an EBITDA margin of 18.4%. The company's net profit reached INR4.9 crores, growing 10.4% YoY, translating to an EPS of INR1.96, up 10.11% YoY. Management emphasized a disciplined approach to pricing, procurement, and operational efficiency as key to maintaining healthy profitability despite some margin moderation.
Strong Order Book and Inflow Visibility
The company secured new orders worth INR195.64 crores during Q1 FY27, with execution timelines ranging from 7 to 17 months. This robust inflow contributed to a total order book of INR590.06 crores as of August 13, 2026, providing healthy execution visibility for the coming quarters. The order book is predominantly composed of power transformers (76.91% or INR453.83 crores) and non-government orders (69.9% or INR412.46 crores), reflecting a strategic shift towards larger, higher-value projects. Approximately 80-85% of these orders are protected by price variation clauses, mitigating raw material price volatility.
Kannur Manufacturing Facility Ramp-up and Capacity Expansion
The new Kannur manufacturing facility, which became operational in January/February, has significantly bolstered the company's overall manufacturing capacity to approximately 9,000 MVA, capable of producing transformers up to 200 MVA and 220 kV. Currently, the new plant is operating at 20-25% utilization, with management expecting it to reach 30-50% utilization by Q4 FY27. The primary focus for ramp-up is on workforce training, with skilled workers from Unit 1 being deployed and freshers being trained to enhance execution efficiency.
Strategic Market Focus and Future Growth Outlook
Supreme Power is actively pursuing new opportunities in power transmission, distribution, renewable energy, and industrial applications, leveraging its expanded capacity and enhanced technical capabilities. The company is particularly keen on entering the data center segment, planning to conduct 165 MVA transformer testing to secure orders for 50-160 MVA units. Management projects a conservative revenue guidance of INR250-300 crores for FY27, with a minimum 30% year-on-year revenue growth, aiming for a peak revenue of INR600-650 crores from both plants by FY29.
Margin Trajectory and Working Capital Management
Management expects PAT margins to be maintained between 10-12% and EBITDA margins between 18-20% for the rest of FY27. While focusing on larger power transformers is expected to yield 1-2% higher margins, these gains are anticipated to be absorbed by increased overheads, including employee costs for the expanded facility. To support working capital requirements, the company has approached banks for higher limits. The debtors cycle is expected to be around 80-100 days, with inventory held for 2-2.5 months.
Main Board Migration and Capital Allocation Strategy
The company has initiated the process for migration to the main board, with the window expected to open after December and the migration planned for next year. For capital expenditure, Supreme Power plans to invest INR20-22 crores in a tank manufacturing facility, to be funded through term loans. While no equity dilution is planned for FY27, management indicated that an equity raise might be considered in FY28 to support future growth, acknowledging equity as the costliest form of funding.