Summary
Indo SMC Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 11, 2026, 12:00 P.M. IST
Event Participants
Executives 3 Dipal Patel (Financial Consultant), Neel Shah (Managing Director and CFO), Nitin Patel (Chairman and Non-Executive Director)
Analysts 8 Abhi Jain (AJ Capital), Hrishit Jhaveri (CBA Assets Managers LLP), Jayesh (HDFC Securities), Jignesh (Jiva Capital), Nirav Bhanushali (Systematix PMS & AIF), Nishita (Sapphire Capital), Rakesh Khosla (Dhanishth Technical Investments), Samarth Kanabar (SKS Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹101.49 crores | Strong QoQ growth; 9M FY26 revenue reached ₹214 crores. |
| EBITDA | ₹16.45 crores | 16.2% margin; driven by operating leverage and disciplined cost management. |
| Profit After Tax (PAT) | ₹12.10 crores | 11.9% margin; management focuses on PAT stability between 10-12%. |
| Order Book | ₹142.45 crores | Includes ₹54 crores fresh orders in Q3; provides strong revenue visibility. |
| Receivable Days | 40 days | Significant improvement from 83 days in H1 FY26. |
| Capacity Utilization | 60%-80% | Recovery from 30-40% in H1 (monsoon impacted); targeting 90% peak. |
Geographic & Segment Commentary
SMC (Sheet Moulding Compound): This segment focuses on utility meter boxes and junction boxes. Management targets revenue of ₹120-₹150 crores for FY27, driven by smart metering projects and the opening of new state utility markets. The segment benefits from higher automation and raw material cost auditing.
CT/PT & Metering Cubicles: Comprises current transformers, potential transformers, and bus ducts. This is the largest growth driver, with a target of ₹250 crores for FY27 following recent MSEDCL vendor approvals. The segment is expanding from traditional strongholds into Maharashtra, Gujarat, Punjab, and South India.
FRP (Fiber Reinforced Plastics) & Pultrusion: Includes cable trays and gratings used in railways, defense, and the oil industry. Management expects this segment to reach ₹70-₹80 crores in FY27 as new pultrusion machines are commissioned. Recent strategic moves include trial exports to Oman and targeting the Vande Bharat train projects.
Company-Specific & Strategic Commentary
Market Diversification: The company is transitioning from a 60% government-dependent utility focus to high-growth sectors like Defense, Railways, and Automobiles. Management is currently awaiting RDSO design approvals for railway coach interiors.
Operational Excellence: Implementation of a cost-auditing system and increasing purchasing power post-IPO has allowed for theoretical margin expansion despite raw material volatility. The company is replacing manual fabrication with automated processes in the SMC and Pultrusion lines.
Product Substitution Strategy: A core strategic pillar is replacing traditional metal components with composite materials (SMC/FRP) in frequency-sensitive applications like AI, Drones, and Smart Metering.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Revenue | ₹300+ crores | Upgraded from internal target of ₹280-₹290cr due to strong H2 execution. |
| FY27 Revenue | ₹450+ crores | Minimum target based on order visibility and capacity expansion. |
| PAT Margin | 10% - 12% | Management commits to maintaining this range as a sustainable floor. |
| Order Book Exit | ₹250 crores | Targeted exit order book by March 31, 2026. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Copper and petroleum-based fiber prices fluctuate. Management mitigates this through back-to-back contract pricing and passing costs to utilities. |
| Seasonality | H1 (monsoon) typically sees slower production and delivery due to site constraints. H2 is historically much stronger for order clearance. |
| Working Capital | Government contracts traditionally involve long payment cycles. While currently reduced to 40 days, rapid scaling to ₹450cr may re-stress liquidity. |
Q&A Highlights
Order Book & Growth
- Question: What is the roadmap for the ₹450 crore revenue target next year? (Nirav Bhanushali)
- Answer: Growth will be led by CT/PT (₹250cr) and SMC (₹150cr). We are winning major tenders, including a 30% share in a ₹300cr+ Andhra Pradesh tender (Neel Shah).
Margins & Cost Control
- Question: Why did EBITDA margins slip from 18% to 16%? (Nishita)
- Answer: Utilization was lower in H1 due to rains. We focus on a sustainable PAT of 10-12% rather than just EBITDA, aided by a new cost-auditing system (Neel Shah).
Working Capital & Cash Flow
- Question: How are you managing negative operating cash flows and high debtors? (Jignesh)
- Answer: We have reduced debtor days from 83 to 40. For private parties, we now collect 20-50% advances and 100% payment before delivery (Dipal Patel).
New Market Entry
- Question: What is the status of the Railway segment entry? (Ronak Bansal)
- Answer: Design approvals are submitted; we expect registration this month and production to start by September for FY27 supply (Neel Shah).
Key Takeaway
Indo SMC delivered a robust Q3 FY26, characterized by a significant reduction in working capital cycles from 83 to 40 days and a strong revenue run-rate of ₹101.49 crores. The company is successfully leveraging its IPO proceeds to expand capacity, specifically adding pultrusion machines and a 2,000-ton press unit to meet burgeoning demand from the power utility and smart metering sectors. Strategically, the firm is pivoting toward high-margin technical products like metering cubicles and entering the railway/defense sectors to de-risk its traditional government utility business. Management has aggressively upgraded its FY27 revenue guidance to over ₹450 crores, supported by a projected exit order book of ₹250 crores. While raw material volatility in copper remains a watch point, the company’s shift toward price-escalated contracts and standardized cost auditing provides a stable outlook for maintaining 10-12% PAT margins through the next fiscal year.
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