Summary
Pace Digitek Limited - Q3 FY2026 Earnings Call Summary Monday, February 09, 2026 11:00 AM IST
Event Participants
Executives 3 Ajay Tambhale (Head, Investor Relations), Rajavendhan P (CFO), Venugopal Rao Maddisetty (Chairman & Managing Director)
Analysts 9 Amol Kankariya, Anuj Kapil, Bhavana Jain, Chintan Mehta, Deepesh Sancheti, Gaatha Jain, Paras Chheda, Ravindra Naik, Sourav Khara
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹644.0 crores | +13.5% YoY / +20.7% QoQ; driven by improved project execution across telecom and energy sectors. |
| Profit After Tax (PAT) | ₹78.8 crores | +11.3% YoY; PAT margin stood at 12.2%. |
| EBITDA | ₹117.9 crores | -11.4% YoY; EBITDA margin at 18.3% vs 21.4% in Q3 FY25 due to project mix and execution phase. |
| Gross Profit | ₹169.2 crores | Reported margin of 26.3% vs 32.9% YoY; impacted majorly by project mix. |
| Employee Expenses | ₹24.9 crores | +44.5% YoY; reflects capacity building in the energy sector and expanding order book. |
| Energy Order Book | ₹6,000 crores | Includes BESS and energy projects; management aims for ₹10,000 crores by March 2026. |
| Telecom Order Book | ₹2,400 crores | Strong pipeline with additional orders expected in the near future. |
| Finance Cost | - | Significantly lower YoY due to lower borrowing levels and utilization of IPO proceeds. |
Geographic & Segment Commentary
- Energy (BESS): Delivered 400 MWh of BESS in Q3, with 200 MWh already commissioned. The segment order book stands at ₹6,000 crores with a ₹4,000 crore L1 pipeline, targeting ₹10,000 crores by fiscal year-end. Management expects the BESS business to contribute meaningfully to FY2027 performance with a target manufacturing output of 7.5 GWh.
- Telecom: Revenue growth supported by improved project momentum and tower erection projects. The segment maintains an order book of ₹2,400 crores with stable margins, though it faces higher working capital cycles of 120-150 days due to retention monies.
Company-Specific & Strategic Commentary
- Capacity Expansion: Increasing BESS manufacturing capacity from 2.5 GWh to 5 GWh by March 2026, with a further expansion to 10 GWh targeted by September 2026.
- Backward Integration: Commencing in-house BESS container fabrication by mid-April 2026 to improve cost control and supply chain reliability.
- Corporate Restructuring: Incorporated TransGreenX Energy Private Limited as a wholly-owned HoldCo to manage Built-Own-Operate (BOO) assets and SPVs.
- Operational Lead: Management claims to be the first in India to deliver 400 MWh of BESS in a quarter and the only manufacturer currently producing from “cell to container.”
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹3,200 crores (FY2027) | Based on current strong order book and execution momentum in Energy and Telecom. |
| BESS Capacity | 10 GWh (Sept 2026) | Expansion from 5 GWh to 10 GWh to maintain market leadership. |
| BESS Order Book | ₹10,000 crores (March 2026) | Expecting conversion of ₹4,000 crore L1 pipeline into firm orders. |
| Manufacturing Output | 7.5 GWh (FY2027) | Approximately 80% of this capacity is already backed by existing orders. |
Risks & Constraints
| Risk | Context |
|---|---|
| Competition & Bidding | Aggressive bidding in recent months has impacted margins; management hopes for industry stabilization as competitors face execution difficulties. |
| Input Costs | Cell prices are volatile; management mitigates this via advance booking with suppliers and backward integration. |
| Working Capital | Telecom projects have high retention money, leading to 120-150 day cycles; BESS cycles are better at 90-120 days. |
| Asset Concentration | BOO model requires heavy capital (₹3,250 crore Capex); failure to secure debt funding or project delays could impact IRRs. |
Q&A Highlights
Order Book & Execution
- Question: What proportion of the ₹10,000 crore BESS order book will be executed in FY27? (Paras Chheda)
- Answer: Approximately 40% of the total BESS order book (EPC + BOO) is expected to be executed in FY2027 (Venugopal Rao).
Margins & Integration
- Question: How do BESS margins compare to Telecom? (Paras Chheda)
- Answer: Energy margins are slightly lower but more stable. BOO Equity IRR is ~14%, Product margins are 12-14%, and EPC margins are 8-10%. Telecom margins are higher (13-15% project + 18% product) but one-time in nature (Rajavendhan P).
Manufacturing Competitiveness
- Question: How do you compete with Chinese battery imports? (Chintan Mehta)
- Answer: Cells have 5% duty while finished containers face higher duties. We are price-comparable on an “apple-to-apple” basis while offering local support/spares which Chinese firms lack (Venugopal Rao).
Financing & Capital
- Question: What is the funding plan for the ₹3,250 crore BOO Capex? (Amol Kankariya)
- Answer: Funded via ₹750 crore IPO equity and 70-75% debt. We have already secured IREDA funding for the MSEDCL project at ~9% interest (Rajavendhan P).
Key Takeaway
Pace Digitek delivered a steady Q3 FY2026 with 13.5% YoY revenue growth to ₹644 crores, though margins compressed due to a shift in project mix toward the energy segment. The company is aggressively pivoting toward its Battery Energy Storage System (BESS) business, securing a ₹6,000 crore segment order book and targeting ₹10,000 crores by year-end. Strategic focus remains on deep backward integration, including expanding manufacturing capacity to 10 GWh by September 2026 and launching in-house container fabrication. Management has structured an annuity-based BOO model through its new subsidiary, TransGreenX, aiming for a consolidated revenue of ₹3,200 crores in FY2027. While aggressive competition and working capital intensity in telecom remain watch points, the company’s “cell to container” manufacturing capability positions it as a frontrunner in India’s energy transition landscape. Forward performance depends on the timely commissioning of the 5 GWh expansion and successful debt tie-ups for the BOO portfolio.
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