Tembo Global Industries Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Tembo Global Industries reported strong Q3 FY26 financial performance with significant YoY growth in revenue, EBITDA, and PAT. The company achieved a robust order book and commenced production at its new Vasai facility, enhancing manufacturing capacity. Progress in new verticals like Solar and Defence, with the latter expected to begin commercial production soon, underpins future growth. Management provided optimistic guidance for FY27 growth and margins, while addressing questions on working capital and material costs.

Highlights

  • Q3 FY26 Revenue of ₹251 crores, up 49.5% YoY, driven by strong traction in Engineering and Textile segments.

  • Q3 FY26 EBITDA at ₹43 crores, up 41.9% YoY, with EBITDA margin at 17.2%.

  • Q3 FY26 PAT at ₹26 crores, up 36.7% YoY.

  • Consolidated order book of approximately ₹1484 crores as of December 2025, providing strong revenue visibility.

  • New Vasai manufacturing facility commenced commercial production, increasing installed capacity to 100,000 metric tons.

  • Significant progress in new business verticals: Solar land acquired across 24 sites and project financing disposed; Defence completed regulatory steps and targeting Sep-Oct 2026 for commercial production.

Concerns

  • Cost of material increased by 86% QoQ, though management attributed it to project-specific variations.

  • Working capital days remain at 80-90 days, indicating continued capital intensity.

Key financials

3 periods

Headline

  • Working Capital Days
    80 days

Q3 FY26

  • Revenue
    ₹251 Cr
    YoY +49.5%
  • EBITDA
    ₹43 Cr
    YoY +41.9%
  • EBITDA Margin
    17.2%
  • PAT
    ₹26 Cr
    YoY +36.7%
  • PAT Margin
    10.4%

9M FY26

  • Revenue
    ₹744 Cr
    YoY +58.6%
  • EBITDA
    ₹104 Cr
    YoY +64.7%
  • EBITDA Margin
    13.9%
  • PAT
    ₹68 Cr
  • PAT Margin
    10.4%

What they filed

Q1 FY27: revenue up 21.8%, net profit up 55.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue164 168 274 248 245 +49%251 +49%346 +26%302 +22%
EBITDA15 30 29 28 32 +113%43 +43%39 +34%49 +75%
Net profit15 19 16 20 22 +47%26 +37%30 +88%31 +55%
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

  • Engineering Division
    52.9% Revenue Growth (Q3 FY26)
  • Textile Division
    44.4% Revenue Growth (Q3 FY26)

Order book

high confidence

Total value

₹1,484 Cr

as of 2025-12-31 quantified

Execution

12 to 24 months of execution

Composition

  • Engineering products and EPC led projects (product)

Pipeline

deal pipeline tcv

active discussions for potential projects related to Port construction and Fuel Farm systems with a potential valuing exceeding Rs. 700 crores spanning Civil, MEP and HVAC packages.

This order book gives us a strong revenue visibility for the coming Quarters.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Solar loans passed, Defence commitment from banker. Internal accruals and bankers for working capital.
    • Defence plant (first stage) ₹300 Cr
    • Solar capital outlay plant ₹650 Cr
    • New Vasai manufacturing facility
    So Defence has a CAPEX of Rs. 1000 crores. Solar has a CAPEX of Rs. 650 crores with the projects have been already approved by institutions and the loans have passed. Solar loans have passed. For Defence, we already have commitment from, in principle from banker. So those, those both have been taken care of and, Tembo Global Industries already plant is in motion. Machinery is coming in.
  • M&A Tembo Infra Merger · Pending regulatory
    the board approved and proposed merger of Tembo Infra with Tembo Global Industries, with filings completed with the NSE.
  • M&A Tembo Defence Acquisition · Closed

    Entry into Defence sector

    First you have taken 75.09% stake in Tembo Defence. So who is the remaining, who has the remaining share in Tembo Defence? Is there an investor who has a share? As a promoter, have a share of the remaining this one?

Guidance & targets

Revenue

  • Defence Revenue Revenue · FY27 · High confidence 125-150 crores
    FY27, you can expect Rs. 125 to Rs. 150 crore.

    — Sanjay Patel

  • Defence Annual Revenue Potential (Full Capacity) Revenue · Annually (after full ramp-up) · High confidence 300 crores
    Annually, it should reach around Rs. 300 crore, this is the first stage of plant.

    — Sanjay Patel

  • Solar Revenue Revenue · Next year · High confidence 75-90 crores
    Next year's revenue, you can expect around Rs. 75 to Rs. 90 crore and subsidies around Rs. 110 crore.

    — Sanjay Patel

  • Solar Annual Revenue (Full Capacity) Revenue · per annum for 25 years · High confidence 75-90 crores
    Annual generation would be around Rs. 75 to Rs. 90 crore per annum which will go for 25 years.

    — Sanjay Patel

Margin

  • Defence EBITDA Margin Margin · Ongoing · High confidence 30-35%
    EBITDA might be around 30% - 35%.

    — Management

Capacity

  • Defence Commercial Production Start Capacity · Q3 FY27 · High confidence September end or October 2026
    So maximum to maximum, September end or October we should start commercial production for Defence.

    — Sanjay Patel

  • Vasai Plant Utilization Capacity · in two to three years · Medium confidence 90-100%
    No factory is 100%, but yeah, around 90% to 100%.

    — Shabbir Merchant

Other

  • Solar Subsidies Other · Next year · High confidence 110 crores
    Next year's revenue, you can expect around Rs. 75 to Rs. 90 crore and subsidies around Rs. 110 crore.

    — Sanjay Patel

  • Solar Commercialization Other · 2027 · High confidence Fully commercialized in 2027
    Yes. And to add in, we have a Rs. 110 crore of subsidy which will come out from the government.

    — Shabbir Merchant

  • Solar Payback Period Other · Within 5 years · High confidence Maximum five years
    Maximum five years.

    — Sanjay Patel

  • Textile Business Separation Other · 2027 · High confidence Separated by 2027
    So we are planning to get it separated by 2027.

    — Sanjay Patel

Market context

  • Tembo Global Revenue Growth Growth · FY27 · High confidence 35-40%
    So next year we are targeting a growth of around 35% to 40%, from current level.

    — Sanjay Patel

  • Tembo Global PAT Margin Profitability · FY27 · High confidence 10-12%
    Margins is around 10% to 12% PAT.

    — Sanjay Patel

What to watch in Q4 FY26

Defence Commercial Production Start

Next quarter (Q3 FY27)
Current Machinery coming in, payments made, regulatory steps completed
Target Commercial production started

Why it matters

The Defence segment is a new, high-margin vertical, and its operationalization is key to future growth and profitability.

So maximum to maximum, September end or October we should start commercial production for Defence.

Risks & concerns

  • Cost of Material Volatility

    medium

    An analyst noted an 86% QoQ increase in cost of material, which management attributed to project-specific variations rather than a systemic issue.

    Analyst acknowledged

  • Working Capital Intensity

    medium

    The company's working capital cycle is 80-90 days, which is typical for the capital goods sector but requires continuous management and funding.

    Analyst acknowledged

  • Project Execution Delays in New Verticals

    medium

    While specific timelines are provided for Defence commercial production (Sep-Oct 2026) and Solar commercialization (2027), project execution in new, complex areas inherently carries risks of delays.

    Acknowledged

Q&A highlights

7 direct
Defence Segment Timeline, Revenue & Margins Direct
So maximum to maximum, September end or October we should start commercial production for Defence. ... FY27, you can expect Rs. 125 to Rs. 150 crore. ... Annually, it should reach around Rs. 300 crore... EBITDA might be around 30% - 35%.

Provides specific financial and operational targets for the new, high-margin Defence vertical, which is a key growth driver.

Asked by Deepak Poddar

Overall Company Growth and PAT Margins for FY27 Direct
So next year we are targeting a growth of around 35% to 40%, from current level. ... Margins is around 10% to 12% PAT.

Offers a comprehensive outlook on the company's expected top-line growth and profitability for the upcoming fiscal year.

Asked by Deepak Poddar

New Vasai Plant Ramp-up Plan Direct
Basically, it is a phased manner. ... it will get ramped up as discussed in the next, on a higher side, two to three years. On a very higher side, we would be working on complete capacity.

Clarifies the timeline for achieving full capacity utilization at the new manufacturing facility, which is crucial for scaling operations and improving efficiency.

Asked by Deepak Poddar

Execution Timeline of Current Order Book Direct
We are looking for around 12 to 24 months of execution.

Provides clarity on the revenue visibility and conversion pace of the existing robust order book.

Asked by Deepak Poddar

Traction from Marquee Clients and Future Order Pipeline Direct
So we are looking at around Rs. 700 to Rs. 1000 crore of orders to add on to. And we are almost in final stage of negotiation. In fact, that is why I said that there will be a lot of pleasant surprises going forward.

Highlights significant potential for new order inflows from large corporate clients, indicating strong future business development.

Asked by Kriti Tripathi

Solar Division Revenue, Subsidies, and Commercialization Direct
Next year's revenue, you can expect around Rs. 75 to Rs. 90 crore and subsidies around Rs. 110 crore. ... this solar will be fully commercialized in 2027?

Details the expected financial contribution and timeline for the Solar division, a new strategic vertical.

Asked by Kriti Tripathi

Increase in Cost of Material QoQ Partial
So the cost of the, COGS depends upon the, every project to project that what we earn. So that is in the consolidation. So some projects might get a lower margins and some projects might get higher margins. So that is why the COGS is on.

Addresses a significant QoQ increase in material costs, providing management's explanation for the variability, which could impact margins.

Asked by Vansh Saini

Funding for Working Capital Requirements Direct
So usually we go to banker and in our internal accruals also helps out in that, but CAPEX and all is there, then that balance fund, either we raise by a promoter's contribution or something, or 99% we go for bankers.

Clarifies the company's strategy for funding its working capital needs, emphasizing reliance on bankers and internal accruals over equity dilution for routine operations.

Asked by Suruchi Parmar

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in Q3 & 9M FY26

Tembo Global Industries delivered strong financial results for Q3 FY26, with revenue reaching ₹251 crore, marking a 49.5% year-on-year growth. EBITDA for the quarter stood at ₹43 crore, up 41.9% YoY, achieving a margin of 17.2%. Profit after Tax (PAT) increased by 36.7% YoY to ₹26 crore. For the nine-month period, revenue grew 58.6% YoY to ₹744 crore, with EBITDA at ₹104 crore (up 64.7% YoY) and PAT at ₹68 crore, reflecting consistent execution and improved scale.

Expanded Manufacturing Capacity and Operational Efficiency

A key operational highlight was the commencement of commercial production at the new manufacturing facility in Vasai. This modern facility significantly scales up manufacturing capabilities, increasing installed capacity to approximately 100,000 metric tons. The company expects this facility to reach 90-100% utilization within two to three years, which is anticipated to improve operational efficiency, logistics, and overall margins.

Strong Order Book and Promising Pipeline

The company maintains a robust consolidated order book of approximately ₹1484 crore as of December 2025, primarily driven by Engineering products and EPC-led projects, providing strong revenue visibility for the coming quarters. Management indicated an execution timeline of 12 to 24 months for this order book. Furthermore, Tembo Global is in active discussions for potential projects exceeding ₹700 crore in Port construction and Fuel Farm systems, spanning Civil, MEP, and HVAC packages.

Strategic Progress in New Business Verticals: Defence

Significant progress was reported in the Defence vertical, where the company has completed key regulatory steps, including land allotment and obtaining the arms license. Orders for machinery and technology have been placed, with commercial production targeted to commence by September end or October 2026. The first stage of the Defence plant has an annual revenue potential of ₹300 crore, with an expected EBITDA margin of 30-35%.

Strategic Progress in New Business Verticals: Solar

In the Solar segment, Tembo Global has successfully acquired land across 24 sites, and the first tranche of project financing has been disposed by banking partners. The company is setting up a capital outlay plant of ₹650 crore, which will generate annual revenue of ₹75-90 crore for 25 years by selling power to the Maharashtra government. The Solar project is expected to be fully commercialized in 2027 and has a maximum payback period of five years, with an additional ₹110 crore in subsidies expected next year.

Outlook and Capital Allocation Strategy

For FY27, Tembo Global is targeting a revenue growth of 35-40% and a PAT margin of 10-12%. The company's capital expenditure plans include ₹1000 crore for Defence and ₹650 crore for Solar, with funding secured through institutional approvals and banker commitments. The company also announced the proposed merger of Tembo Infra with Tembo Global Industries and plans to separate its textile business by 2027 to unlock value, while maintaining a stable working capital matrix.

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