Sathlokhar Synergys E&C Global Limited Q3 FY26 Earnings Call Summary

Summary

Sathlokhar Synergys E&C Global Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026 12:00 PM

Event Participants

Executives 2 G. Thiyagu (Promoter, Chairman, MD & CEO), T. Vigneshwaran (Independent Director)

Analysts 8 Abhinav Shetty (Elios Financial Services), Akhilesh (Individual Investor), Anboli Rajendran (Individual Investor), Aniket Madhwani (Steptrade Capital), Chaitanya Poojara (Arihant Capital), Dinesh Kulkarni (FinSight), Dixit Doshi (Whitestone Financial Advisors), Gaurav Shukla (Finvestors), Mithlesh Sahani (Individual Investor), Sunil Kateshiya (Individual Investor), Tejash (Individual Investor)

Financials & KPIs

Geographic & Segment Commentary

• Segment Mix: Revenue is diversified across PEB (35%), MEP Utilities/External Works (35%), and Civil Works (30%). PEB orders currently aggregate over ₹500 crores within the total order book.
• Geographic Distribution: The order book is concentrated in Tamil Nadu (40%) and Andhra Pradesh (40%), followed by Pune (17%) and international projects in Sri Lanka (3%).
• International Entry: Secured inaugural overseas EPC project worth ₹35.59 crores in Sri Lanka for Ceylon Beverage International, marking a strategic move into cross-border opportunities.

Company-Specific & Strategic Commentary

• PEB Backward Integration: Commenced development of a 15,000 MT state-of-the-art PEB manufacturing facility (₹50 crore capex) with inauguration set for August 30, 2026. This facility is expected to improve supply chain control and enhance bottom-line margins by approximately 100 bps from FY27.
• Expansion Strategy: Plans to establish 5-6 manufacturing units across India (including Pune, Odisha, and Varanasi) over the next five years to reduce transportation costs and enhance regional competitiveness.
• Regulatory Upgrades: Obtained Class 1A Public Works Department registration and electrical substation licenses (ESA for 133 kV), enabling participation in high-value government infrastructure tenders.
• Key Project Milestone: The Reliance Kurnool beverage project (13.75 lakh sq. ft.) is on track for March 2026 inauguration; management noted the deployment of 1,800 workers to meet the 180-day fast-track timeline.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Guidance & Execution

• Question: Why has the FY26 revenue guidance been moderated from ₹1,000 crores to ₹800 crores? (Aniket Madhwani)
• Answer: Three projects were delayed due to environmental and pollution clearance timelines; work only commenced in January 2026. However, growth remains 100% YoY (G. Thiyagu).

Order Pipeline

• Question: There haven’t been new order wins since November 2025; is this a concern? (Tejash)
• Answer: The gap is only 2.5 months. Clients are awaiting land/bank approvals. Large negotiations are underway, and high order booking is expected from March/April onwards (G. Thiyagu).

Financial Health

• Question: Why did debt increase sharply to ₹150 crores? (Dixit Doshi)
• Answer: Scaling to a ₹1,400 crore order book requires ~₹20-25 crore working capital per ₹100 crore of execution. The debt supports scaling and provides confidence to international clients (G. Thiyagu).

Segment Strategy

• Question: What is the benefit of the new PEB factory? (Venkat Sharma)
• Answer: It will primarily serve captive needs, reducing dependence on third parties. It is expected to improve the bottom line by at least 1% starting from H2 FY27 (T. Vigneshwaran).

Client Relationships

• Question: How is the progress with the Reliance Kurnool plant? (Mithlesh Sahani)
• Answer: 14,000 tons of PEB have been delivered. We expect to hand over the first filling line in March 2026. Reliance has 60 projects planned over the next decade, and we are a preferred partner (G. Thiyagu).

Key Takeaway

Sathlokhar Synergys delivered a massive 400% YoY revenue jump in Q3 FY26, though management moderated its full-year revenue guidance to ₹800+ crores (from ₹1,000 crores) due to regulatory delays in project commencement. The company is undergoing a significant structural shift via backward integration, investing ₹50 crores in a PEB manufacturing facility set for a September 2026 rollout to capture higher margins. With a confirmed order book of ₹1,397 crores—of which ₹1,050 crores is currently under execution—and a robust bid pipeline of ₹16,105 crores, the company maintains high visibility. Strategic efforts, including obtaining Class 1A PWD registration and expanding the client base toward a 300-client target, are designed to support a projected 80% growth in FY27. While debt has increased to fund this rapid scale, management remains focused on reducing the receivable cycle to under 90 days to maintain liquidity for its aggressive expansion into new geographies like Pune and Odisha.