Sugs Lloyd Limited Q3 FY26 Earnings Call Summary

Summary

Sugs Lloyd Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026, 4:00 PM

Event Participants

Executives 3 Santosh Shah (Managing Director and Promoter), Satyakam Basu (Chief Executive Officer), Vicky Kumar (Chief Financial Officer)

Analysts 6 Abhishek Shah (Mastercard/Individual), Chinna Satyanarayana (Individual), Disha (Sapphire Capital), Jignesh (Giva Capital), Maitri Shah (Sapphire Capital), Rajesh Singla (VTG Capital)

Financials & KPIs

Geographic & Segment Commentary

• Solar EPC: Comprises ₹220 crores of the order book. Strategy has shifted toward government rooftop projects to avoid land-related delays typically found in ground-mounted projects.
• Power T&D: Comprises ₹188 crores of the order book. Focus remains on medium voltage segments, with execution timelines typically spanning up to two years.
• Extra High Voltage (EHV) Transmission: New segment focus for FY27. Management has bid for multiple tenders including high-tech GIS substations for PGCIL and HPPTCL to capture higher margins.
• Niche Products: Contributed 3% to 9M revenue. Expected to reach 10% share in FY27 as Fault Passage Indicators (FPI) and Vacuum Circuit Breakers (VCB) scale.

Company-Specific & Strategic Commentary

• PSU Strategic Tie-up: Entered a pre-bid arrangement with a PSU for projects worth ₹840 crores. This allows Sugs Lloyd to bid for larger individual projects (up to ₹1,000 crores) and utilizes surety/insurance bonds instead of bank guarantees to save working capital.
• Digitalization: Developing proprietary digital tools for project monitoring to enhance operational efficiency.
• Product Development: Finalizing prototypes for Medium Voltage Switchgear and SF6-free Ring Main Units (RMUs) to target an addressable market for environment-friendly electrical infrastructure.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Order Book Clarification

• Question: Why did the order book only grow from ₹409 crores to ₹418 crores despite ₹120 crores in new orders and ₹60 crores execution? (Maitri Shah)
• Answer: The discrepancy arises from the difference between captured revenue and work-in-progress (WIP) on EPC contracts. Not all order inflows immediately translate to a one-to-one increases in the closing order book figure due to the timing of contract signing versus billing (Satyakam Basu).

EHV Strategy & PSU Tie-up

• Question: How will you handle the high bank guarantee (BG) requirements for bidding on large transmission projects? (Chinna Satyanarayana)
• Answer: We have a pre-bid arrangement with a PSU where they bid using their eligibility. We have convinced them to accept surety and insurance bonds instead of traditional PBGs, significantly reducing the pressure on our working capital (Santosh Shah).

Margin Sustainability

• Question: Can the 15% margin be maintained as you scale? (Vaibhav Mishra)
• Answer: Yes, the Power T&D market is mature with high entry barriers. Additionally, our niche products and scattered rooftop solar projects (which face less competition than ground-mount) support higher margins (Santosh Shah).

Working Capital & Funding

• Question: Are you planning further equity dilution to fund the FY28 goal? (Jignesh)
• Answer: There are currently no plans for equity dilution. We are doubling our debt facilities and will utilize internal accruals from projected profits (e.g., ₹50-60 crores PAT next year) to fund growth (Santosh Shah).

Key Takeaway

Sugs Lloyd Limited reported a resilient 9M FY26 performance with 60.62% revenue growth to ₹185.60 crores, despite a ₹20 crore revenue deferment in Q3 caused by a land dispute in Maharashtra. The company maintains a healthy EBITDA margin of 15.18% and is pivoting its solar strategy toward rooftop projects to mitigate execution risks. Strategically, the firm is entering the EHV transmission and GIS substation market, supported by a unique PSU tie-up that enhances bidding capacity while reducing bank guarantee requirements through insurance bonds. With an order book of ₹418 crores and a bid pipeline exceeding ₹1,000 crores, management expressed high confidence in exceeding its FY26 revenue guidance of ₹270 crores and remains committed to a ₹1,000 crore revenue target by FY28. Investors should monitor the successful rollout of proprietary niche products and the transition into EHV projects as primary margin drivers in the coming fiscal year.