Servotech Renewable Power System Limited Q3 FY26 Earnings Call Summary

Summary

Servotech Renewable Power System Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 14:30 Hrs IST

Event Participants

Executives 2 Mr. Raman Bhatia (Managing Director), Mr. Vipin Kaushik (Finance Controller)

Analysts 9 Abhishek Kumar, Ansh Wadhwa, Deepika Sharma, Gaurav Singh, Jitesh Parmar, Mahesh Vaze, Meet Mehta, Prashant Omkar, Sadagoppan Ramesh

Financials & KPIs (Consolidated)

Geographic & Segment Commentary

• Solar Segment: The primary revenue driver contributing over 90% of Q3 turnover. Focus remains on retail distribution with 4,000 existing retailers, targeting 10,000, while expanding into railway and government projects.
• EV Charging: Currently contributes <10% of revenue due to policy shifts from FAME to PM E-Drive. Management is pivoting toward infrastructure-ready technology and high-capacity chargers for buses and logistics.
• UAE/International: Established a Dubai subsidiary to serve as a global procurement and international expansion hub. The hub aims to leverage UAE’s trade agreements to bypass tariffs and lower procurement costs.

Company-Specific & Strategic Commentary

• Lithium Battery Launch: Establishing in-house manufacturing for captive consumption in solar energy storage systems and 3-wheeler (E-rickshaw) battery packs. Targeting 5,000 units/month initially, scaling to 25,000 units/month within a year.
• Backward Integration: Focused on manufacturing grid-tied and hybrid inverters in India. Management clinical on developing E-rickshaw batteries to add ₹100 crores in value-added revenue.
• AI Integration: Implementing Agentic AI/Machine Learning across HR and operational departments to improve manpower capability and predictive dashboards.
• Diversification vs. Focus: Management clarified that new ventures (Servotech Sports, Hertz & Pixelz) are managed as independent subsidiaries with separate CEOs to avoid defocusing the core power business.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Segment Revenue Mix

• Question: What is the revenue split between EV chargers and solar? (Jitesh Parmar)
• Answer: EV chargers currently contribute 10-11% due to policy holdbacks. 90% of revenue is solar-driven, with batteries currently used for captive solar consumption rather than retail. (Raman Bhatia)

International Strategy

• Question: What is the market strategy for the UAE subsidiary? (Deepika Sharma)
• Answer: It is not just for the UAE market but a global hub to utilize trade agreements and lower procurement costs. Plans include tapping global markets over the next 1-2 years following US tariff removals. (Raman Bhatia)

Manufacturing Flexibility

• Question: Is production capacity for chargers being wasted due to low demand? (Jitesh Parmar)
• Answer: No. The facility is designed with “banquet-hall” flexibility. Specialized electronics capacity has been diverted to solar inverters but can be reverted to chargers immediately if a 25,000-unit order arrives. (Raman Bhatia)

Battery Business Strength

• Question: How does Servotech stand out in the competitive lithium battery market? (Jitesh Parmar)
• Answer: The primary strength is captive consumption for solar projects (growing “vegetables for one’s own roof”). This removes price competition for the base load of production and protects gross margins. (Raman Bhatia)

Key Takeaway

Servotech Renewable Power System Limited demonstrated a strong sequential recovery in Q3 FY26, with consolidated revenue reaching ₹212 crores and PAT at ₹15.5 crores, driven by a strategic pivot to the Solar segment which now accounts for 90% of the mix. While the EV charging segment faced headwinds due to the transition to the PM E-Drive scheme, management maintained operational efficiency by repurposing manufacturing lines for solar inverters, currently producing 10,000 units monthly. Strategic focus is now on backward integration through in-house lithium battery production (targeting 60,000 packs annually) and international expansion via a new Dubai procurement hub. Despite the inherent working capital pressures of government contracts and commodity price volatility, the company guided for 40-50% growth in the coming year. Success remains contingent on the aggressive scaling of the retail distribution network to 10,000 outlets and the timely execution of the new battery energy storage systems (BESS).