Summary
Standard Engineering Technology Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 05, 2026 4:00 PM
Event Participants
Executives 4 Anjaneyulu Pathuri (CFO), Nageswara Kandula (Managing Director), Ramakrishna Kandula (Executive Director), Venkata Mohana Rao Katragadda (Executive Director)
Analysts 6 Agam (Individual Investor), Koushik Mohan (Ashika Group), Krishna (Individual Investor), Maitri Shah (Sapphire Capital), Ram Arvind (ithoughtPMS), Raman KV (Sequent Investments)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (9M FY26) | ₹562 crores | +23.6% YoY, driven by strong execution and strategic transformation. |
| Total Income (Q3 FY26) | ₹196 crores | +37.1% YoY, +4.8% QoQ, reflecting steady demand in engineering platforms. |
| EBITDA (9M FY26) | ₹102 crores | Reflects disciplined execution and early benefits of the integrated model. |
| EBITDA (Q3 FY26) | ₹34 crores | -18.8% YoY (margin at 15.1%), impacted by lower-than-expected exports and higher employee costs. |
| PAT (9M FY26) | Not explicitly stated | +18.8% YoY, showing consistent profitability growth. |
| PAT (Q3 FY26) | Not explicitly stated | +28.3% YoY, driven by operational scaling despite margin pressure. |
| Export Contribution | 15% (current) | Management targeting 13% for full FY26 and 15-20% for FY27. |
| Cash flow from Ops | ₹2 to ₹5 crores | As of Dec 31; management expects ₹50-₹70 crores positive cash flow by March 31, 2026. |
Geographic & Segment Commentary
- Glass Lining: Remains the core growth engine despite the corporate name change. The segment is seeing rapid adoption of Shell and Tube heat exchangers, with 200 units in the order book and a target to reach the largest manufacturer status in India by FY27.
- Engineering & Turnkey Solutions: Following the acquisition of C2C Engineering, the company now offers concept-to-commissioning services. This segment handles complex projects including civil, HVAC, and automation, providing 95 varieties of in-house manufactured equipment.
- Life Sciences (Scigenics): Strengthened via the acquisition of Scigenics India, focusing on bioprocess and fermentation systems. Management expects this segment to grow 25-30% under the Standard Engineering umbrella.
Company-Specific & Strategic Commentary
- Corporate Identity: Changed name from Standard Glass Lining Technology to Standard Engineering Technology to reflect an evolution into a multidisciplinary engineering platform.
- Strategic Acquisitions: Completed acquisitions of Scigenics India (Life Sciences) and a majority stake (51%) in C2C Engineering (Integrated Engineering) to bolster turnkey capabilities.
- Product Innovation: Launched conductivity glass-lined reactors to address static issues in pharma; official global launch scheduled for April 2027 with partner IPP.
- Manufacturing Expansion: Establishing an assembly center in India for heat exchangers; aiming for a total capacity of 300 units per month by April 2026.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 25% YoY for FY26 & FY27 | Driven by organic growth, export expansion, and new product launches. |
| Export Mix | 15-20% for FY27 | Focused on high-margin US and European markets via partners like IPP. |
| EBITDA Margin | “Slightly increasing” | Expected improvement in Q4 FY26 as delayed exports of $3.5M are billed. |
| Capex | ₹100-₹150 crores (FY27) | Includes ₹70-100 crore for Greenfield Phase I and ₹30-50 crore for existing plants. |
| Manufacturing | 300 heat exchangers/month | Targeting full capacity availability by April 2026 to meet pharma/chemical demand. |
Risks & Constraints
| Risk | Context |
|---|---|
| Order Execution Delays | Q3 margins were hit because $3.5M of expected $4.5M exports were delayed to Q4 due to name-change documentation. |
| Promoter Pledge | Shares are currently pledged for personal purposes; management targets removal within the next 6 months. |
| Margin Pressure | Recent margins declined to 15.1% due to higher employee recruitment costs and increased consumable consumption for complex projects. |
Q&A Highlights
Margin Performance
- Question: Why did margins decline from 18.6% to 15.1% this quarter? (Raman KV)
- Answer: Primarily due to a delay in high-margin exports; only $1M of the planned $4.5M was booked in Q3. The remaining $3.5M will hit in Q4 (Nageswara Kandula).
Acquisition Run Rates
- Question: What is the revenue potential for C2C and Scigenics? (Maitri Shah)
- Answer: C2C is expected to touch ₹40 crores and Scigenics ₹35-40 crores in FY26. Management targets doubling C2C revenue next year (Anjaneyulu Pathuri).
Heat Exchanger Expansion
- Question: What is the capacity and market for the new glass-lined heat exchangers? (Sai Kumar/Ram Arvind)
- Answer: Capacity will be 300 units/month starting April. We have 120 units in hand and see massive replacement potential for graphite/alloy units in the chemical and CDMO sectors (Nageswara Kandula).
Cash Flow and Collections
- Question: What is the current status of cash flow from operations? (Sai Kumar)
- Answer: It was ₹2-5 crores as of Dec 31, but significant collections in Q4 will bring it to ₹50-70 crores positive by year-end (Anjaneyulu Pathuri).
Key Takeaway
Standard Engineering Technology Limited (SETL) delivered a resilient Q3 FY26 with a 37.1% YoY revenue jump to ₹196 crores, though EBITDA margins softened to 15.1% due to timing shifts in high-margin exports. The company successfully transitioned its identity to an integrated engineering platform, supported by the strategic acquisitions of Scigenics and C2C Engineering. A major growth pivot is underway with the April 2026 ramp-up of glass-lined heat exchanger capacity to 300 units per month and the upcoming global launch of conductivity reactors in 2027. Management maintains a confident 25% revenue growth guidance for the medium term, backed by a ₹100-150 crore capex plan for FY27. While promoter pledging remains a watch point, the commitment to clear it within six months and the projected ₹50-70 crore positive cash flow by FY26-end suggest a strengthening financial profile as SETL pursues its goal of becoming India’s largest glass-lining equipment manufacturer.
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