Rishabh Instruments Limited Q3 FY25 Earnings Call Summary

Summary

Rishabh Instruments Limited - Q3 FY2025-26 Earnings Call Summary Thursday, February 06, 2026 4:00 PM IST

Event Participants

Executives 4 Dinesh Musalekar (Whole-Time Director), Narendra Goliya (Promoter & Executive Chairman), Nishant Dudhoria (AGM Strategy, Finance, & PR), Vishal Kulkarni (CFO)

Analysts 4 Ankit Gupta (Bamboo Capital), Kiran D (Table Tree Capital), Madhur Rathi (Counter Cyclical Investments), Prateek Giri (Subh Labh Research)

Financials & KPIs

Geographic & Segment Commentary

• Electrical & Electronics Instrumentation (EEI): This core segment saw 17.7% YoY growth with margins expanding to 26.6%. Growth is fueled by export demand, new product launches in power quality analyzers, and entry into the medium-voltage segment (PTs/CTs). Management targets 15-20% top-line growth for the segment by year-end.
• High-Pressure Die-Casting (LUMEL Alucast): Revenue declined 29.1% due to a deliberate shift from low-margin automotive contracts (phased out to China) to non-automotive and high-voltage electrical parts. Management expects a ₹50-60 crore top-line dip in FY27 but aims to maintain 5% EBITDA margins during the transition.
• European Market (LUMEL S.A.): Revenue grew 22.4% YoY in Q3 despite a subdued industrial climate in Europe. Performance was supported by radiation monitoring gates (military/non-military) and solar installations, with 25%+ EBITDA margins being maintained.
• Solar & Clean Energy: The solar inverter business has finally turned profitable at the operating level following an investment in high-end aluminum casing moulds. Management project significant scaling, targeting 50-100% growth in the initial phase over the next three years.

Company-Specific & Strategic Commentary

• Manufacturing Expansion: Two new buildings in Nashik are nearing completion, which will double production capacity. These facilities are expected to be operational by H2 FY27, focusing on solar and medium-voltage products.
• Cost Optimization & R&D: Management integrated R&D teams across Poland, India, and China to eliminate duplication. Automation initiatives in calibration and manufacturing have permanently reduced headcount and cycle times, contributing to the ~1,300 bps margin expansion in standalone operations.
• Trade Policy Positioning: Management highlighted benefits from the India-EU FTA and a proposed reduction in US tariffs from 25% to 18%. Despite existing 50% US tariffs, the US subsidiary grew 50% YoY, reaching $3 million in revenue.
• Product Roadmap: A 5-year strategy aims to generate 50% of current turnover from new product lines. Focus areas include AI data centers in the US and the medium-voltage segment to expand the total addressable market.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Die-Casting Outlook

• Question: How much further can the die-casting top line fall? (Prateek Giri)
• Answer: We expect a dip of ₹50-₹60 crores in FY27 as we taper automotive products. We have reduced shifts and optimized costs to keep EBITDA at 5% during this period. FY28 should see a return to double-digit EBITDA (Dinesh Musalekar).

US Market Strategy

• Question: What is the impact of US import duties and Trump’s policies? (Madhur Rathi)
• Answer: Though a 18% flat duty is discussed, we grew our US business from $1M to $3M under a 50% tariff regime by managing prices and customer relations. We are targeting $5M-$10M in the US in the coming years (Dinesh Musalekar / Narendra Goliya).

Margin Sustainability

• Question: Are the 26% EEI margins sustainable? (Ankit Gupta)
• Answer: Yes, these are driven by systematic sourcing improvements (4-5% savings), automation in Nashik, and better product lifecycle management. We have integrated our global sales and R&D teams to prevent duplication (Dinesh Musalekar).

Nashik Capex Timeline

• Question: When will the Nashik expansion start generating revenue? (Prateek Giri)
• Answer: The buildings will be operational in H2 FY27. This will support the expansion into medium-voltage solutions and high-efficiency solar inverters (Dinesh Musalekar).

Key Takeaway

Rishabh Instruments delivered a robust Q3 FY26, characterized by significant margin expansion and the achievement of its original full-year EBITDA guidance within nine months. The Electrical and Electronics Instrumentation (EEI) segment remains the primary growth engine, with EBITDA margins reaching a record 26.6% through sourcing efficiencies and manufacturing automation. While the die-casting segment (Alucast) is undergoing a painful transition away from the automotive sector, leading to a projected top-line dip in FY27, the segment has successfully reached operating breakeven. Strategically, the company is pivoting toward high-growth areas like AI data centers, medium-voltage equipment, and solar inverters, while doubling its Nashik capacity to meet export demand. Despite potential geopolitical headwinds regarding US tariffs, management remains confident in achieving ₹115-₹120 crores in adjusted EBITDA for FY26 and maintaining a 20-25% long-term growth trajectory for the electronics business. Management expects FY27 to be a year of consolidation for die-casting followed by a full recovery in FY28.