Hind Rectifiers Limited Q3 FY26 Earnings Call Summary

Summary

Hind Rectifiers Limited - Q3 FY26 Earnings Call Summary Thursday, February 12, 2026 11:00 AM

Event Participants

Executives 4 Anil Kumar Nemani (CFO), Douglas Bailey (Global CEO), Manoj Nair (CEO), Suramya Nevatia (CMD)

Analysts 8 Abhi Shah, Gurmit Chadha, Jay Jain, Manish Goyal, Pankaj Kumar, Payal Shah, Pragya Bharadwaj, Prisha Rathi

Financials & KPIs

Geographic & Segment Commentary

• Railway Segment: Remains the mainstay of the business with a ₹2.93 lakh crore record sectoral budget allocation. Focus persists on electrification and rolling stock modernization, with 1,700 electric locomotives planned for manufacture next year.

• European Operations (BeLink Hirect SAS): Integration of the newly incorporated subsidiary is ongoing with a focus on cross-selling printed electronics into railway and defense. The segment remains loss-making (₹1 crore loss on ₹34 crore revenue) but is viewed as a high-multiple long-term profitability play.

• Industrial & Defense: Currently contributes a minor portion of revenue but remains a strategic focus for diversification. Management is actively evaluating opportunities in adjacent sectors to reduce reliance on the railway segment.

Company-Specific & Strategic Commentary

• Backward Integration: The Sinnar facility for specialized copper conductors has commenced supply for in-house transformers. Full scaling by Q2 FY27 is expected to improve supply chain reliability and enhance gross margins.

• Propulsion Systems: Official field trials for propulsion systems have commenced with Western Railway. Completion of the 50,000-km trial milestone is expected within 3-4 months, with an existing order book of ~40 systems valued at ₹50 crores.

• Product R&D: Approximately 40 products are currently under development, spanning new IP, upgrades, and efficiency improvements. The R&D pipeline focuses on power electronics for both railway and non-railway applications.

• Corporate Actions: The Board approved a 1:1 bonus share issue by capitalizing the share premium account to reward shareholders and improve market liquidity.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Order Book & Tender Pipeline

• Question: Why was order inflow muted this quarter? (Jay Jain)
• Answer: Railway tenders for transformers were pushed out by a quarter, but requirements are building for Q4 and next year (Manoj Nair).

Propulsion System Status

• Question: What is the timeline for propulsion system trials and orders? (Prisha Rathi/Manish Goyal)
• Answer: Trials have commenced at Western Railway; 50,000km trial should finish in 3-4 months. Current order book is ~₹50 crores for 40 systems (Manoj Nair).

Margin Pressure & Recovery

• Question: What led to the margin drop and when will it recover? (Rahil/Manish Goyal)
• Answer: Volatility in copper prices was the primary driver. Significant margin expansion is expected from Q2 FY27 as the Sinnar copper factory reaches full swing (Suramya Nevatia).

Global & BeLink Strategy

• Question: What is the status of BeLink integration and European losses? (Abhi Shah/Payal Shah)
• Answer: Integration is a continuous process involving IP transfer. While currently loss-making, it provides a gateway to European defense and railway markets (Suramya Nevatia).

Key Takeaway

Hind Rectifiers Limited reported a strong Q3 FY26 with 64.2% revenue growth, reaching ₹277.4 crores, though EBITDA margins contracted to 9.2% due to copper price volatility. The company maintained a robust order book of ₹1,103 crores and initiated critical field trials for its high-value propulsion systems with Western Railway. Strategically, the firm is transitioning from a railway-centric supplier to a global power electronics player through its European acquisition (BeLink) and backward integration at the Sinnar plant, which is expected to drive margin recovery starting Q2 FY27. Management has signaled a confident outlook with 30% YoY growth guidance for FY27, backed by record railway capex and a pipeline of 40 R&D products. The company remains focused on completing safety trials and scaling in-house component manufacturing to achieve long-term profitability targets.