This article first appeared on GuruFocus .
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Revenue (Q3):All-time high of EUR 80.7 million, with 18% organic growth.
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Revenue (9M):Approximately EUR 211 million for JanuarySeptember, up 32.4% year-over-year.
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Profitability (9M):EUR 20.3 million, close to double-digit at 9.6% cumulatively.
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Earnings Per Share:Increased 53.1%, positively impacted by an earnout adjustment on the Lacon acquisition.
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Growth Drivers:Defense sector leading growth, with positive contributions from AI and AI data center development.
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Share Buyback:First-ever buyback program launched in August, averaging about EUR 200,000 per week in cash consumption.
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Inventory:Build-up driven by high expected customer volumes and global component/material supply chain delays.
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Cash & Financing:Strong cash level with some debt; overall financing situation described as very solid.
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Outlook:Guidance kept unchanged from last time, citing continued uncertainties around material availability; strong order intake supports a strong Q4.
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Warning! GuruFocus has detected 6 Warning Signs with OHEL:ICP1V.
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Release Date: October 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Incap Oyj achieved all-time high revenue of EUR 80.7 million in Q3 2026, with 18% organic growth driven by defense and AI data center sectors.
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Profitability remained strong with EBITDA margin over 10% in Q3, supported by higher utilization rates and favorable product mix.
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The company maintains a solid financial position with strong cash levels and a very good financing situation, enabling continued investments and shareholder returns.
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Incap Oyj initiated its first-ever share buyback program, demonstrating commitment to shareholder value creation with about EUR 200,000 weekly purchases.
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The German subsidiary is well-positioned to capture growth opportunities in defense, railway, and medical devices, leveraging certifications and design capabilities.
Negative Points
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Incap Oyj faces challenges in global component and material supply chains, leading to inventory build-up and potential delays.
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The company expects to lose some business from its largest customer in India, which may impact revenue and require ramping up new customers to balance.
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There is uncertainty in material availability that could affect the company's ability to meet its outlook, despite strong order intake.
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Working capital has increased due to inventory buildup and higher receivables, putting stress on cash flow.
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The M&A market has high multiples, making value-creative deals difficult, so Incap Oyj is focusing on organic growth and share buybacks instead.
Q & A Highlights
Q: How did order intake develop in Q3, and do you expect defense growth to continue in Q4? A: CEO Otto Pukk said order intake remained strong in Q3 and he expects defense to stay very strong in Q4 and beyond, calling it a hot topic in Europe despite some material constraints.
Q: It looks easy to reach the upper end of your guidance. What would need to happen for you not to reach the outlook? A: CEO Otto Pukk said hitting guidance is never easy, but the bigger picture supports the outlook. The main risk is unexpected delays in materials such as PCBs, though Incap has navigated several material crises before and does not currently foresee problems.
Q: EBITDA jumped over 10%. Was this driven by volume only or also by mix? A: CEO Otto Pukk said there is always a mix impact, but the main driver was higher utilization combined with a very lean overhead structure. He stressed that double-digit EBITDA is nice but not a target in itself; maximizing profit is the goal.
Q: Regarding lost business with your largest customer, will data center orders fully offset the lost business in India? A: CEO Otto Pukk said Incap expects to balance the impact with other customers, including large international customers ramping up in India, and he views the development positively despite the work required.
Q: Do you expect margin deterioration in India going forward? A: CEO Otto Pukk said no. Incap competes on the same market as everyone else and does not have exceptionally high prices in India, so he expects the business to remain at around the same margin level.
Q: Would you still plan cost savings in India? A: CEO Otto Pukk said no cost savings program is planned. The cost level should stay the same; Incap will simply produce fewer of some products and more of others, without cutting a large part of the factory.
Q: Do long-term defense contracts tie up more networking capital than your traditional business? A: Regional President Ralf Hasler said there is no negative impact once projects are up and running. However, postponement of larger projects, as happened last year, can lead to some material buildup.
Q: Will capacity be a constraint for future growth? A: CEO Otto Pukk said no. Incap plans investments with excess capacity, and he argued the capacity question is outdated for EMS: people, machines and facilities can be rented, so expanding is no longer a heavy-capital exercise.
Q: Do you have an estimate of what share of business with the largest customer in India you expect to lose? A: CEO Otto Pukk said he has no estimate. The customer is increasing its supplier base and some volumes will be targeted, but Incap is ramping other good accounts and expects to balance out any eventual decrease.
Q: Do you mostly serve German customers from Germany, and do German and Romanian factories share the same customers? A: Regional President Ralf Hasler said yes. Customer proximity is important, most customers are in Germany, and the Romanian factory, the cable harnessing competence center, also mainly serves German customers.
Q: Is the defense business a higher-margin business for you? A: CEO Otto Pukk said it depends on the project. Defense is broad, spanning classical projects such as fighting vehicles and modern drones with very different usage models, so margins vary by product.
Q: Can we expect double-digit margins going forward? A: CEO Otto Pukk said the decentralized organization and low overhead put Incap in a good position for solid EBITDA levels, but product mix matters. The percentage is not a target; Incap would not turn down a profitable opportunity even if it dilutes the margin.
Q: Was the Q3 cash flow development in line with normal seasonal variance, and do you expect a seasonal capital release in Q4? A: CFO Antti Pynnonen said growth since Q2 ties up working capital in inventory, now around EUR 90 million, and receivables, partly because a solid Q4 is expected. Cash flow is under stress, which is the normal pattern in growth years; cash should return once growth stabilizes and material availability improves.
Q: How does the M&A market look right now from your perspective? A: CEO Otto Pukk said Incap is not focusing on large-scale M&A. With the share price at a discount to competitors, high market multiples and the active share buyback program, large deals are hard to make value creative. The focus is organic growth and buybacks, though smaller bolt-on acquisitions remain possible and M&A will likely return when conditions are more favorable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
