Summary
IKIO Technologies Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 12:00 PM
Event Participants
Executives 2 Hardeep Singh (Chairman and Managing Director), Sanjeet Singh (Whole-Time Director, CEO and CFO)
Analysts 4 Charchit Malu (Individual Investor), Deepak Karwa (Individual Investor), Nilesh Sharma (Anantnath Skycon Private Limited), Sanjay Sood (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹146 crores | +20% YoY; Driven by diversification into hearables/wearables and strong Middle East demand. |
| EBITDA | ₹22 crores | +47% YoY and +19% QoQ; Significant improvement following prior “front-loading” of strategic expenses. |
| EBITDA Margin | 15% | +280 bps YoY and +383 bps QoQ; Driven by increasing scale and operational efficiencies in new verticals. |
| Profit After Tax | ₹11 crores | +38% YoY; PAT margin expanded to 7.4% (+98 bps YoY). |
| Cash PAT | ₹19 crores | +27% YoY; Reflects healthy cash generation despite elevated depreciation from new facilities. |
| Gross Margin | 44% | Significant recovery from mid-30s in previous quarters; Management targets a 40-45% sustainable range. |
| Export Revenue | ₹90 crores | +57% YoY (9M FY26); Now accounts for ~21% of total revenue, led by the Dubai market. |
Geographic & Segment Commentary
- Middle East & Global: Revenue from outside India grew 57% YoY to ₹90 crores in 9M FY26. While U.S. exports remain minimal due to tariff uncertainties, the Dubai subsidiary is scaling rapidly, adding new clients monthly and expanding from in-store lighting to home lighting.
- Other Businesses (Non-Home Lighting): Segment revenue rose 33% YoY to ₹101 crores in Q3, now contributing 70% of total revenue. Growth is powered by hearables, wearables (earphones, smartwatches), and the entry into automotive electronics.
- Automotive Lighting: Commercial billing for 4-5 major customers (including Motherson and Rock) commences in Q4 FY26. The company is the first in India to manufacture specific high-end automotive electronic products, targeting premium brands under NDA.
Company-Specific & Strategic Commentary
- Capacity Expansion: Block II (2 lakh sq. ft.) of the greenfield project is complete with assembly lines installed. Commercial production is slated for Q1 FY27, with 60% of space dedicated to hearables/wearables and 40% to automotive.
- Inorganic Growth (Gravus Tech): The acquisition of an 88% stake in Gravus Tech strengthens marketing for premium, high-end lighting. This move leverages existing expertise to target architects and consultants with minimal capital outlay.
- Backward Integration: Management continues to focus on in-house manufacturing to drive cost efficiencies and maintain quality, particularly as they scale the hearable and wearable product categories.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Mix (Export) | Increasing Trajectory | Expansion into Europe is planned via the India-EU FTA; Middle East remains a high-growth pillar. |
| Margin Stability | 40-45% Gross Margins | Sustainable range expected as new verticals reach optimal utilization (targeted at 80-85%). |
| PLI Benefit | ₹5-6 crores (FY27) | Expected benefit of ~4-4.5% based on qualifying revenue targets for the next financial year. |
| Utilization | 60% Initial Utilization | Block II utilization expected to start at 60% for wearables and scale to 80%+ over 2-3 quarters. |
Risks & Constraints
| Risk | Context |
|---|---|
| Tariff & Geopolitical | U.S. market exports are currently hindered by tariff uncertainties; management is mitigating this by liquidating existing U.S. stocks and pivoting to the Gulf. |
| Regulatory Delays | Construction of Block II faced minor delays due to NGT (National Green Tribunal) restrictions on construction activity during the winter months in NCR. |
| Concentrated Standalone Revenue | The standalone entity (historical ODM business) has been dependent on a single customer; management is “rejigging” this by onboarding 4-5 new brands to diversify. |
Q&A Highlights
Automotive Vertical
- Question: What is the status of the automotive component business and which vendors are you targeting? (Nilesh Sharma)
- Answer: Prototyping is complete and active billing/delivery starts this month for 4-5 major stakeholders. We are developing EV chargers and specialized lamps where we are the first Indian manufacturer (Hardeep Singh/Sanjeet Singh).
Manufacturing Capacity
- Question: Why has the Block II operational timeline remained the same since the last call? (Nilesh Sharma)
- Answer: External NGT construction bans during Diwali slowed progress, but interior assembly line work continued. Commercial production will definitely commence in Q1 FY27 (Hardeep Singh/Sanjeet Singh).
Profitability Drivers
- Question: What led to the 280 bps YoY EBITDA margin expansion? (Deepak Karwa)
- Answer: Strategic expenses were front-loaded for new products and factories in previous quarters; margins are now trending upward as revenue scales and operational efficiencies kick in (Sanjeet Singh).
Export Strategy
- Question: Are you pursuing markets beyond the Gulf and U.S.? (Deepak Karwa)
- Answer: We are taking “baby steps” into the European market, bolstered by the recently signed FTA. We plan to replicate our Middle East B2B success in other parts of the world (Sanjeet Singh).
Key Takeaway
IKIO Technologies delivered a resilient Q3 FY26, characterized by a 20% YoY revenue growth and significant EBITDA margin expansion to 15%. The company has successfully transitioned its revenue mix, with “Other Businesses” (hearables, wearables, and specialized electronics) now contributing 70% of the total topline, reducing dependence on traditional home lighting. Strategically, the firm is pivoting toward high-margin segments like automotive electronics—where billing starts in Q4 FY26—and expanding its global footprint via a high-performing Dubai subsidiary. While U.S. tariff issues remain a headwind, the 57% growth in 9M FY26 export revenue highlights effective geographic diversification. With the 2 lakh sq. ft. Block II facility set for Q1 FY27 commercialization and expected PLI benefits of ₹5-6 crores next year, IKIO is positioned to leverage its front-loaded investments into sustained profitable growth.
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