This article first appeared on GuruFocus .
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Revenue:INR18.4 billion for Q1 FY26-'27, up 38% year-on-year from INR13.3 billion.
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Order Intake:INR11.4 billion, down 30% year-on-year from INR16.2 billion, due to lower TBCB market realizations.
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Order Backlog:INR209.3 billion as of June 2026, down 2.5% quarter-on-quarter from INR214.6 billion.
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Profit Before Tax:INR4.9 billion for the quarter, up from INR3.9 billion in the same quarter last year.
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Gross Margin:41.3%, down from 48.4% a year ago and 47% in the last quarter.
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EBITDA:25.1%, in line with the mid-20s band guidance.
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Cash Generation:INR4.3 billion generated during the quarter, with total available cash at INR29.3 billion.
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Export Revenue:30% of Q1 revenues, down from 33% in the last financial year.
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Export Orders:46% of Q1 orders, reflecting diversification.
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Backlog Composition:Private customers 77%, central utilities/PSUs 21%, state utilities 2%.
Release Date: August 07, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew 38% year-on-year to INR18.4 billion, driven by strong execution of the order backlog.
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Order backlog remains robust at INR209.3 billion, providing over three years of revenue visibility.
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EBITDA margin of 25.1% was delivered, in line with the company's mid-20s guidance.
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Export diversification is strengthening, with exports accounting for 46% of Q1 orders, including new wins from North America, Spain, and Morocco.
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The company maintains a zero-debt position and generated INR4.3 billion of cash during the quarter, with a total cash balance of INR29.3 billion.
Negative Points
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Order intake declined 30% year-on-year to INR11.4 billion due to a soft TBCB (Tariff-Based Competitive Bidding) pipeline in the previous quarter.
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Gross margins contracted to 41.3% from 45.3% in FY26, impacted by lower export revenue mix, elevated commodity prices, and ramp-up of lower-margin HV business.
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A large INR3,000 crore RPT (Related Party Transaction) order has been put on hold by the customer, and the approval is set to expire at the upcoming AGM.
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The INR1,300 crore US data center RPT order has been delayed due to changes in project location and scope, with finalization now expected in Q2 or Q3.
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The HVDC project pipeline is experiencing delays, with the Lakadia project on hold and the Begunia project converted to EHVAC, though the pipeline remains intact.
Q & A Highlights
Q: What is the status of the two major Related Party Transaction (RPT) orders, the INR1,300 crore US data center order and the INR3,000 crore project, and how will the expiration of the latter's approval impact the pipeline? A: Sandeep Zanzaria (CEO & MD) clarified that neither order has been booked. The INR1,300 crore data center order is still under discussion with the end customer and is expected to be finalized in Q2 or Q3 of this financial year. The INR3,000 crore project has been put on hold by the customer due to internal budget issues. Since the approval for this project will expire at the upcoming AGM in September, the company will need to seek fresh shareholder approval if and when the customer reinitiates the process. Both opportunities are considered delayed, not lost.
Q: Can you explain the 4% year-on-year decline in gross margins to 41.3% and confirm if the full-year EBITDA guidance remains intact? A: Sushil Kumar (CFO) attributed the gross margin decline to three factors: 1) A 1% to 1.5% impact from lower export revenue share (30% vs. 33% last year) and the execution of a highly profitable export order in the prior year. 2) An impact from elevated commodity prices, which reduced execution savings compared to initial plans. 3) A 2% to 2.5% impact from the ramp-up of the High Voltage (HV) business, which has lower gross margins but better operating leverage. He confirmed that about 50% of the gross margin impact is mitigated at the EBITDA level, resulting in an EBITDA of 25.1%, which is in line with the company's mid-20s guidance for the full year.
Q: The export order run-rate was very high this quarter. What is driving this, and can you provide a breakdown of the order book between group entities and third parties? A: Sandeep Zanzaria (CEO & MD) stated that the high export intake was driven by a better opportunity pipeline, including significant orders for instrument transformers from utility customers in the US and 400 kV GIS packages from customers in different countries. Sushil Kumar (CFO) added that of the INR11.4 billion total orders, roughly INR5.5 billion came from exports, with approximately INR5 billion of that from group entities. The remaining INR6.5 billion was from third parties, including domestic customers. He also noted that exports constitute about 10% to 15% of the total INR209 billion order backlog.
Q: How do you view the HVDC pipeline given the delays in projects like Lakadia and Begunia, and what is the outlook for domestic ordering? A: Sandeep Zanzaria (CEO & MD) stated that the HVDC pipeline remains strong and is not going away, despite a slower pace than desired. He noted that bidding for the South Kalamb project has occurred and decisions are expected in August or September, with one or two more projects expected in upcoming tenders. Regarding domestic ordering, he explained that the soft order intake in Q1 was due to a muted TBCB pipeline from January to March. However, the pipeline has picked up significantly since June, and he expects the overall market to either remain flat or grow by 6% to 7% this year, with the company remaining confident in its base order flow guidance of INR7,000-8,000 crores.
Q: What is the company's competitive advantage, and how will the re-entry of Chinese players into the GIS market impact pricing and market share? A: Sushil Kumar (CFO) cited technology, localization, and manufacturing as the company's distinct competitive advantages. Regarding Chinese competition, Sandeep Zanzaria (CEO & MD) noted that the impact is yet to be seen as negotiations for TBCB projects haven't started. He highlighted that Chinese players must comply with the 60-65% local content requirement, which may limit their ability to undercut prices. He also questioned their capability to deliver orders within 18 months after being absent from the market for 3-4 years.
Q: How is the company managing capacity allocation between domestic and export opportunities, and what is the current capacity utilization? A: Sandeep Zanzaria (CEO & MD) explained that the company uses a constant tracking mechanism to balance opportunities based on delivery timelines and maturity. They make conscious decisions on whether to target export or domestic orders based on capacity availability and project overlap. On capacity utilization, he stated that some factories are loaded very well, while others still have room to grow, which is consistent with previous commentary.
Q: How will the recent Power Grid decision to extend TBCB project timelines from 18-24 months to 24-30 months impact the company's order cycle and CapEx plans? A: Sandeep Zanzaria (CEO & MD) stated that the extended timelines will not impact CapEx plans or capacity utilization. The main effect will be a slight stretching of the ordering cycle, as customers with 30-month timelines may take 3-4 months to make decisions, whereas previously they decided within 1-2 months.
Q: With the recent acquisition of Prolec by GE Vernova Global, do you see more export optionalities opening up for the India factories? A: Sushil Kumar (CFO) confirmed that the India factories will benefit from the Prolec acquisition and the large transformer orders it has received in the US. However, he declined to provide a specific total addressable market (TAM) figure, stating that it would depend on the mix of individual opportunities, including order types and ratings.
Q: How is the company thinking about the balance between shareholder returns and funding capacity expansions, given the growing cash pile? A: Sushil Kumar (CFO) reiterated that of the INR29 billion cash available, the company has announced a utilization plan of approximately INR13 billion, including INR10 billion for CapEx and INR2.5 billion for dividends. The management and Board continuously evaluate options for the remaining surplus cash to maximize shareholder returns. He highlighted that the CapEx is largely within existing plants with surplus land, which allows for better returns on investment.
Q: With significant capacity additions expected from competitors, do you foresee an oversupply situation in the market over the next few years? A: Sandeep Zanzaria (CEO & MD) acknowledged that if
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
