Trom Industries Limited

Trom Industries reported a 12.01% year-on-year moderation in total revenue, reaching INR40.73 crores in H1 FY26, down from INR46.29 crores in H1 FY25. This was primarily attributed to invoicing delays for completed projects and weather-related disruptions. Despite the revenue dip, profitability significantly improved, with EBITDA growing 16.33% to INR6.98 crores (from INR6 crores) and net profit increasing 6.29% to INR4.39 crores (from INR4.13 crores).

The company's EBITDA margin expanded to 17.13% in H1 FY26 from 12.96% in H1 FY25, and net margin rose to 10.77% from 8.93%. Management stated that this improvement was due to disciplined execution, a better project mix, and operational efficiency, specifically highlighting the stabilization of solar panel prices in H1 FY26 compared to the previous year's fluctuations caused by duty structure changes. They expressed confidence in the sustainability of these improved margins, expecting a stable 2-5% profit margin on products.

Trom's current order book stands at approximately INR30 crores, which is expected to be executed and billed by March 30, 2026, with an additional INR15-20 crores in smaller orders to be completed by December. The company has improved its project execution cycle for 1-5 MW industrial rooftop projects from over 5 months to 2-3 months, attributing this to a stronger design team and better management of government registration and timelines. The company does not engage in fixed-price contracts, with project costs being determined on a case-by-case basis.

The company primarily focuses on government and industrial EPC projects, which constitute 75-80% of its revenue, with residential projects making up 20-25%. Management indicated a preference for higher-ticket government orders (over INR1 crore average ticket size) due to better margins (20-25% vs 10-15% for industrial) and less price-sensitive competition compared to the residential segment, particularly under schemes like PM Surya Ghar, where many small, price-conscious companies operate.

Trom is actively exploring new growth avenues, including green hydrogen and battery storage systems (BSS). Management confirmed ongoing work and attendance at seminars for green hydrogen, with plans to enter this segment in the future. They are also developing BSS solutions for solar systems, recognizing the significant market potential for battery storage over the next 10-15 years, and are considering manufacturing in the future, aiming for 30-40% annual growth in manufacturing.

The company is building its annuity-based RESCO (Renewable Energy Service Company) portfolio, with approximately 27 megawatts of orders in the pipeline expected to be executed within the next year. These RESCO projects are anticipated to yield an attractive Return on Investment (ROI) within four to five years. Funding for these projects is planned through general and bank financing, leveraging aggressive bank schemes for solar projects, with discussions already underway with banks.

Trom is actively pursuing geographical expansion beyond its strong base in Gujarat. The company reported plans to expand into Maharashtra, Rajasthan, and Madhya Pradesh. As part of this strategy, a 50 MW tender has already been secured in Maharashtra through a partnership with Oriana Power and DGR, indicating concrete steps towards broader market presence.

Trom utilizes digital tools and AI for its operations and maintenance (O&M) activities. This includes SAP ERP, a TaskForce app for monitoring employees and O&M work, and an app-based monitoring system for all projects. These tools enable real-time tracking of faults and generation issues, contributing to operational efficiency and customer satisfaction. The current O&M portfolio covers approximately 30 megawatts of government projects.