Detailed Narrative
Strong Financial Performance in FY25
Supreme Power Equipment Limited reported robust financial results for the full year FY25, with consolidated total income reaching INR 149.54 crores, marking a 31.65% year-on-year increase. Consolidated EBITDA grew by 24.60% to INR 29.07 crores, and net profit rose significantly by 32.84% to INR 18.06 crores. The company's EPS for FY25 stood at INR 7.44, reflecting a 4.49% growth over the previous year.
Robust Order Book and Future Visibility
The company's consolidated order book currently stands at INR 167.67 crores, providing strong revenue visibility for the upcoming quarters. This includes major order wins such as INR 60.5 crores from Neyveli Lignite Corporation, INR 22.26 crores from a leading electric company in Chennai, and INR 10.02 crores for transformer components. Management expects an additional INR 15-20 crores in order inflows in the next quarter, with a pipeline of offers totaling around INR 800 crores and a success rate of 10-15%.
Capacity Expansion and New Facility Progress
Supreme Power is actively expanding its manufacturing capabilities, with its new facility currently 70% completed. This plant is projected to be fully operational by December 2025, with a total capex of INR 80-85 crores, of which INR 60-65 crores has already been incurred. Once fully utilized within two to three years, this new facility is expected to generate approximately INR 500 crores in revenue, enabling the company to handle larger and more complex orders.
Strategic Diversification and Market Focus
The company is strategically diversifying its client base, with non-government orders accounting for approximately 73.5% of its revenue, driven significantly by the solar segment. While government orders were 26.5% last year, the company is now targeting federal government entities beyond state utilities. Product-wise, Inverter Duty Transformers (IDT) for solar applications constitute 40% of the current order book, reflecting a strong alignment with renewable energy trends.
Geographic Expansion and Export Ambitions
Supreme Power is actively pursuing geographic expansion beyond Tamil Nadu, targeting new regions such as Kerala, Telangana, Karnataka, and Punjab, where it has already achieved L1 status in some tenders. The company is also working towards entering the international market, with plans to secure export orders next year. This diversification strategy aims to support long-term and sustainable growth.
Margin Management and Cost Control
Management anticipates a slight compression in PAT margins, projecting a 10-12% range for FY26, a potential drop of 1-1.5% from current levels. This is attributed to increased workforce and overheads associated with the new capex. However, the company asserts its ability to manage raw material cost pressures through long-standing vendor relationships and by passing on costs to customers, thereby mitigating significant impact on profitability.