This article first appeared on GuruFocus .
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Consolidated revenue grew approximately 39% year-over-year, with EBITDA up 48% and PAT up 40%, demonstrating strong financial performance.
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Growth is driven by higher value-added core products, which improve profitability and reduce competition due to their complexity.
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Forward integration into assemblies and finished components increases customer stickiness and locks in business for the life of the program.
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The company is expanding into new verticals like busbar assemblies and PCBA, with a significant revenue opportunity of INR 100-200 crores.
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Domestic market opportunities are accelerating, particularly in EV components, with the ecosystem developing faster than anticipated.
Negative Points
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Inventory buildup due to development work and supply chain shifts is a temporary issue that needs to be addressed to improve cash conversion.
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The shift towards assembly business is expected to lower EBITDA margins to 15-16% from the current 26-27%, impacting overall profitability.
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Growth is subject to delays in customer approvals and validation cycles, which can cause fluctuations in quarterly performance.
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US shunt volumes have declined due to supply chain diversion to Asia, which may affect regional revenue mix and reporting.
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Leadership gaps exist, including a vacant CFO position and the need for a COO, which could impact operational efficiency and strategic execution.
Q & A Highlights
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Q: With the assembly/busbar and PCBA business scaling up, will it be reported separately or merged into existing segments? A: Sumir Gulman (Full-Time Director) said it will be shown as a separate vertical within the core business effectively a fourth revenue bucket alongside the existing three as it is a forward integration of the resistor business with massive scaling potential. It remains part of the parent organization, not a standalone subsidiary.
Q: What is driving the strong growth this quarter, and what is the outlook for FY27/FY28? A: Sumir Gulman (Full-Time Director) said the growth is coming mainly from core products multiple customer developments moving from sampling/pilot stages into regular business, plus design changes at one or two large customers rather than from PCBA/CCS, which contributed only marginally. He sees 30-35% top-line growth as sustainable over the next two years if developments materialize, though timing can vary.
Q: Shunt volumes declined ~16% while shunt revenue grew ~36% why, and how much is commodity pricing versus value-add? A: Sumir Gulman (Full-Time Director) explained that business is converting from supplying thick/wide strip as raw material to supplying finished resistors, so fewer kilograms ship but with far more value-add and better profitability. On commodities, most material pricing is a pass-through with minimal bottom-line impact; excluding commodity inflation, underlying volume-led growth would still be ~25-26%.
Q: What are the revenue and margin implications of the assembly business for FY28? A: Sumir Gulman (Full-Time Director) estimated a Rs 100-200 crore opportunity in the assembly business, which carries lower EBITDA margins of ~15-16% versus ~26-27% for legacy products. If much of it materializes alongside growth in shunts and contacts, revenue could grow 30-40%, but blended margins may dip ~1.5-2.5%. Over a three-year horizon, at 3-4x current revenue, blended EBITDA margins could settle around 20-22%.
Q: Why did US shunt revenue decline despite a large customer's rising order book? A: Sumir Gulman (Full-Time Director) said the decline reflects a shift in arrangement accelerated by last year's tariff issues under which Shivalik now supplies components directly to the US customer's end users, 70-80% of whom are outside the US, mostly in Asia. The business is intact but now classified under Asia; some new US-customer developments began materializing only in the last two to three months.
Q: What is the status of the CCS business and additional customer qualifications? A: Kabir Gulman (Managing Director) said two or three other programs are in advanced stages, with initial prototyping done and some undergoing testing. Validation cycles take longer because this supply chain is new to India previously most material was imported from China with little local design/R&D but the pipeline alongside the one program in mass production is progressing.
Q: How should investors view domestic versus export opportunities given the global EV push? A: Sumir Gulman (Full-Time Director) said India's ecosystem is advancing faster than anticipated, with battery packs and BMS assemblies increasingly localized. While export opportunities with existing and new customers remain, a large share of future high-value-add growth such as shunt resistor components is expected to come from the domestic market.
Q: What drove the sharp uptick in India bimetal numbers after several sluggish quarters? A: Sumir Gulman (Full-Time Director) attributed it to retail demand, real estate and infrastructure activity, and the clearing of excess inventory that had accumulated during a flat demand period. Customer feedback and internal research suggest a good outlook for medium- and low-voltage switchgear in India over the next two to three quarters.
Q: What CapEx is planned, and which areas will it target? A: Kabir Gulman (Managing Director) said the focus is on downstream process capacity enhancement (parts and assembly level), automation for end-of-line calibration and testing as assemblies grow more complex, and expansions for PCB/PCBA lines. Sumir added that the earlier Rs 1,300 crore capacity estimate would now be higher, and capacity can be added in time at low cost before any tightness arises.
Q: How is the electrical contacts business positioned on capacity utilization and silver price sensitivity? A: Sumir Gulman (Full-Time Director) said the company deliberately moved away from high-silver-content components, so silver swings have minimal margin impact; contacts revenue more than doubled, with 40-50% from material values and the rest from customer and product growth. The new facility is fully operational, and capacity utilization should reach ~55% by year-end, with one product type (~50% of revenue) running at 50-60% and room to double without added CapEx.
Q: What is the status of inventory buildup planned demand or geopolitical/pricing stocking? A: Kabir Gulman (Managing Director) said the buildup stems from conversion into assemblies and finished components, which lengthen supply-chain cycles and require multiple validation rounds, plus higher inventory needs in busbar assemblies and PCBA. Sumir added it is largely temporary, tied to heavy development work, and the company is actively pursuing programs to reduce inventory cycles in phases.
Q: What leadership gaps is the company addressing for its next growth phase? A: Sumir Gulman (Full-Time Director) said a new CFO should be onboard by end-December, and the company is actively hiring a COO to take over operational matters from Kabir, plus senior R&D and electronics-focused marketing/sales talent. The aim is to free the MD and director for strategic decisions on new product verticals, which hold the key to future growth.
Q: What are the opportunities in data centers and battery energy storage (BESS)? A: Kabir Gulman (Managing Director) said data centers drive indirect demand through switchgear and battery management systems, while BESS presents direct opportunities in CCS and busbar applications, though at very early stages. India's rapidly declining reliance on China for complete battery packs should accelerate development speed in these areas.
Q: How many shunts go into a vehicle, and how is content per EV increasing? A: Kabir Gulman (Managing Director) said shunt count varies widely roughly 30-55
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
