Summary
Fabtech Technologies Limited - Q3 FY26 Earnings Call Summary Tuesday, February 10, 2026 10:00 a.m. IST
Event Participants
Executives 4 Aasif Khan (Founder & Promoter), Aman Anavkar (Chief Growth Officer), Ashwani Singh (CEO), Karan Doshi (Head Investor Relations & Finance Strategy)
Analysts 5 Aniket Madhwani, Dhruv, Dinesh Agarwal, Girish, Maitri (Multiple firms)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Order Book | ₹926 crores | As of Jan 31, 2026; represents 9-18 month execution cycle. |
| Deferred Revenue | ₹20.3 crores | Material lying at port delayed to Q4; primary reason for Q3 revenue softness. |
| FY26 Revenue Guidance | ₹380 - ₹400 crores | Reiterated; management views Q3 as a timing issue rather than demand issue. |
| FY26 PAT Guidance | ₹39 - ₹41 crores | Reiterated; implies a “bumper” Q4 to meet annual targets. |
| PAT Margin | 9% - 11% | Sustainable range; flexibility to increase by rationalizing ₹8.5-9cr annual marketing spend. |
| Order Funnel (Leads) | $455 million | Characterized as a “hot lead bank” with average ticket sizes rising to $7-10M. |
| Other Income | ₹7 crores | Primarily interest earned on IPO proceeds and FD margins for Bank Guarantees. |
Geographic & Segment Commentary
- MENA & GCC: Focus on medicinal independence in Saudi Arabia and UAE. Management is transitioning to “local” status in these markets to improve preference and bidding conversion rates. Segment is shifting from generics to high-tech projects like cell and gene therapy and oncology.
- Africa (Maghreb & Sub-Saharan): High growth emerging market focused on “medicinal sovereignty.” Recently finalized first animal health (veterinary) projects in regions like Botswana and vaccine facilities in Egypt. Use of LC-backed payments to mitigate geographic credit risk.
- India: Primary operations serve as the “roots” and engineering hub. Domestic business focuses mainly on cleanroom infrastructure for upstream/downstream pharma compared to the international turnkey model.
Company-Specific & Strategic Commentary
- Turnkey Life Sciences Platform: Fabtech differentiates from conventional EPC contractors by manufacturing critical “Process, Air, and Water” components in-house. This internalizes the supply chain for granulation (Mark Maker) and containment solutions (FABL), reducing coordination risk for global clients.
- Asset-Light & Lean Model: The company maintains a lean structure with 180+ experts (engineers, pharmacists). Strategy involves front-loading engineering and mobilization costs while recognizing revenue upon shipment for international projects.
- Medicinal Sovereignty: Strategic focus on countries aiming to build domestic pharma capacity to replace imports. Management aligns advisory consulting (disease profiling) with project execution to build “profitable businesses” for clients.
- Strategic Acquisitions: Management has a “war chest” for European acquisitions to improve conversion rates from 15% to 20-25%. Targeted entities will provide local references and technical IPs to strengthen the global bidding platform.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 30% YoY | Target for FY27 based on current lead conversion and order book depth. |
| Revenue Recognition | Milestone-based transition | Moving away from shipment-only recognition to milestone-based in new contracts to reduce quarterly volatility. |
| Acquisition Timing | Q1 FY27 | Diligence ongoing for European and Middle Eastern targets; could conclude earlier if pricing is right. |
| Sector Expansion | Data Centers & Solar | Exploring adjacent “clean environment” industries like data centers and green energy (via KP Greens) for FY28+. |
Risks & Constraints
| Risk | Context |
|---|---|
| Revenue Volatility | Quarterly fluctuations occur due to shipment-based billing and international logistics timing. Revenue is only recognized upon shipment, not ground progress. |
| Execution Delays | Projects are occasionally held back by client-side civil construction delays. Management balances LC expiry against relationship management to avoid “dumping” material. |
| Cash Flow | Operating cash flow likely to remain negative during high-growth phases (30%+) due to 120-day working capital cycles for project materials. |
| Geographic/Payment Risk | High exposure to emerging markets. Mitigated by strictly working only on confirmed Letter of Credit (LC) backed payments. |
Q&A Highlights
Financial & Revenue Recognition
- Question: Why was there a dip in Q3 top and bottom lines? (Aniket Madhwani)
- Answer: Work was performed, but ₹20.3 crores of material was lying at the port and not shipped by quarter-end. Revenue is recognized only on shipment (Aasif Khan, Karan Doshi).
- Question: Why not use percentage completion method? (Neeraj)
- Answer: Historically, equipment supply roots favored shipment-based billing. New turnkey contracts are being re-worded for milestone-based recognition, but this will take 12-16 months to reflect in results (Karan Doshi).
Market Opportunities & Segment Growth
- Question: Can you explain “disease profiling”? (Hiral Desai)
- Answer: It is an advisory service identifying prevalent regional diseases to help clients select the right product portfolio for new facilities, ensuring long-term profitability (Aman Anavkar, Aasif Khan).
- Question: What is the opportunity in Data Centers? (Dhruv)
- Answer: While life sciences remains the priority, the ecosystem can execute data center infrastructure. Management is cautious not to “run in all directions” and exhaust resources (Aasif Khan).
Order Book & Execution
- Question: What is the current order book split? (Maitri)
- Answer: ₹926 crores total, almost entirely export-focused. Lead times are 9-18 months, though management is working to speed up delivery to achieve earlier realization (Karan Doshi, Aasif Khan).
- Question: What is the typical ticket size and win rate? (Unnamed Analyst)
- Answer: Historically $1.5M - $5M, now increasing to $7M - $10M. Current win rate is 15%, targeted to reach 20-25% post-European acquisition (Aasif Khan).
Key Takeaway
Fabtech Technologies reported a Q3 FY26 performance characterized by timing-led revenue deferrals, with ₹20.3 crores in shipments slipping into Q4. Despite the quarterly softness, management reiterated its full-year revenue guidance of ₹380-₹400 crores and PAT of ₹39-₹41 crores, supported by a robust ₹926 crore order book. The company is successfully transitioning from an equipment vendor to a global life sciences infrastructure platform, manufacturing critical process, air, and water components in-house to capture higher value in emerging markets. Strategic focus remains on “medicinal sovereignty” in the MENA and Africa regions, with ticket sizes rising to the $7M-$10M range. While the current shipment-based revenue recognition and 120-day working capital cycle exert pressure on quarterly optics and cash flow, the move toward milestone-based billing and localized entities in Saudi Arabia and the UAE is expected to stabilize reporting and improve bidding conversion rates. The company remains on track for a target 30% YoY growth in FY27 as it integrates potential European acquisitions and expands into high-tech segments like biosimilars and cell therapy.
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