Kanohar Electricals Ltd (KANOHAR) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 earnings conference call of Kanohar Electricals Limited. The conference call will begin shortly. Please stay connected. Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 earnings conference call of Kanohar Electricals Limited. Please stay connected. The conference call will begin shortly.
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 earnings conference call of Kanohar Electricals Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Teena Virmani from Motilal Oswal Financial Services Limited. Thank you, and over to you, ma'am.
Teena Virmani (Motilal Oswal Financial Services Limited): Hi. Thank you. Good afternoon, everyone. On behalf of Motilal Oswal Financial Services, I welcome you all for Kanohar Electricals Q2 FY27 results conference call. I would like to thank the management for giving us the opportunity to host the call. From the management side, we have with us Mr. Abhishek Singhal, Whole-Time Director, Mr. Vivek Singhal, Whole-Time Director, Mr. Shiv Kamboj, CFO. Without taking much time, I hand it over to Mr. Abhishek for his opening remarks. And after that, we will open the floor for Q&A. Over to you, sir.
Abhishek Singhal (Kanohar Electricals Ltd): Thank you, Teena. Good afternoon, everyone, and a very warm welcome to our Q2 and H1 FY27 earnings call. Joining me today are Mr. Vivek Singhal, Whole-Time Director, and Mr. Shiv Kamboj, our Chief Financial Officer, and our Investor Relations advisors, SGA. Our investor presentation has been uploaded on the stock exchanges and the company's website. So, I hope you all have had an opportunity to review it. Since our Q1 earnings call was held less than a month ago, I'll keep the industry update brief. So, the outlook for the power transmission sector remains encouraging, supported by investments in transmission infrastructure, renewable energy integration, and grid modernization. The approval of the Green Energy Corridor Scheme and the continued focus of state transmission utilities on strengthening their networks are positive developments. Railways also remain an important opportunity, particularly as the adoption of 2x25 kV traction system creates demand for Scott-connected transformers. At Kanohar, we believe we are well-positioned to participate in these opportunities. As we have highlighted previously, manufacturing capacity alone is not sufficient to qualify for large and technically demanding utility and railway tenders. Short-circuit certifications for specific ratings and an established track record are critical entry barriers. We have completed more than 200 successful short-circuit tests, and are among the few Indian manufacturers qualified for 500 MVA, 400 kV power transformers, and the 100 MVA, 220 kV and 132 kV Scott-connected transformers. These qualifications enable us to participate in technically demanding segments of the market. Coming to our performance, Q2 FY27 was a good quarter for us. Revenue from operations grew 112% year-on-year to 208.6 crores. EBITDA margin was 35%, while PAT margins stood at 25.8%. For the half-year H1 FY27, revenue grew 109% year-on-year to 345.7 crores. EBITDA margin was 32.3%, and PAT margins stood at 23.5%. For the full-year, our EBITDA margin guidance remains broadly in line with FY26, as given earlier. Our top line growth was driven by higher manufacturing volumes and a better business mix. Our transformer business contributed nearly 88% of the revenue in H1 FY27, compared with approximately 76% in H1 of FY26, reflecting our continued focus on manufacturing, which remains the core of our business. Power transformers contributed approximately 56% of our total revenue in H1 FY27, registering an year-on-year growth of 88%.
Abhishek Singhal (Kanohar Electricals Ltd): in the corresponding period last. Their share in the Q- in the Q2 was about 1/3 of the revenues. As renewable energy capacity expands and grid infrastructure evolves, we expect shunt reactors to remain an important growth opportunity for us. Scott-connected transformers for railways contributed approximately 9% of H1 revenue. Our product mix also reflects our shift towards higher voltage equipment. 400 kV products contributed around 56% of total revenues in H1. Products rated 220 kV and above, including 400, accounted for nearly 78% of total revenue in H1 '27, compared with approximately 53% in H1 of FY '26. This increasing contribution from higher voltage and technically demanding products is consistent with our strategy and is reflected in our operating performance. Moving to the order book. We received orders worth 867.3 crores during Q2, including a large order exceeding 250 crores from a central PSU. As of 30th September 2026, our order book stood at 2,711.2 crores, an increase of 34% over the end of Q1. This provides good revenue visibility over the next 24 to 30 months. Power transformers account for approximately 78% of the order book, while shunt reactors contribute around 10%. On capacity expansion, the planned, the planned brownfield expansion at our Gangol facility remains on track, with completion expected by the beginning of FY '29. Looking ahead, the first half has been encouraging, supported by strong growth and a healthy order book. Traditionally, the second half of the year is stronger for our industry, and we expect this seasonality to continue. We expect to achieve our previously communicated FY '27 revenue guidance of approximately 950 crores, with a full-year EBITDA margin profile broadly similar to FY '26. We expect 400 kV power transformers to remain our largest product segment, with shunt reactors and Scott-connected transformers also contributing meaningfully. With that, I will hand over to our CFO, Mr. Shiv Kamboj, to take you through the financial performance in greater detail. Thank you.
Shiv Kamboj (Kanohar Electricals Ltd): Thank you, sir. And good afternoon, everyone. Let me now take you through the key financial and operational highlights for the second quarter and first half of FY '27. In Q2 FY '27, revenue from operations was 208.6 crore rupees, up 112% year-on-year. Transformers contributed 89.5% of revenue and EPC 10.5%. Gross profit was 95.4 crore rupees, representing a gross margin of 45.8%. EBITDA was 73.1 crore, up 167% year-on-year, with a margin of 35%. PAT was 53.9 crore, up 180% year-on-year, with a margin of 25.8%. For H1 FY '27, revenue from operations grew 109% year-on-year to 345.7 crore rupees. Gross profit grew 114% to 152.9 crore, representing a gross margin of 44.2%. EBITDA was 111.8 crore, up 162% year-on-year, with a margin of 32.3%. PAT was 81.2 crore, up 165% year-on-year, with a margin of 23.5%. Growth came from higher volumes and a higher revenue share from the manufacturing business. Shunt reactors for renewable grid integration also made a meaningful revenue contribution alongside our 400 kV power transformers. For Q2 FY '27, by end user segment, power transmission was 57.1% of revenue, renewable energy 34%, railways 7%, and power distribution 1.9%. By voltage, as a proportion of total Q2 revenue, 400 kV transformer contributed 46.6%, 220 kV 34%, 132 kV 7%, and below 132 kV 1.9%. As of 30th of September 2026, our
Shiv Kamboj (Kanohar Electricals Ltd): was ₹2,711.2 crore up 34% from ₹2,026 crore as of 30th June 2026. Coming to the balance sheet, trade receivables reduced to ₹141.6 crore from ₹210.8 crore supported by healthy collections. While inventory stood at ₹196.8 crore as we prepare for higher execution in the second half. On debt, total borrowings came down to ₹28.1 crore from ₹39 crore as at 31st March 2026. With that, I conclude my remarks and we will now open the floor for Q&A.
Moderator: the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you will press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Mihir Manohar from Trust Mutual Fund. Please go ahead.
Mihir Manohar (Trust Mutual Fund): Yeah, hi. Thanks for giving the opportunity and congratulations on great set of numbers. Very, very good numbers. Sir, largely I wanted to get a sense on the margin segment, you know, we are having 35% EBITDA margins, 45, 46% margin is quite high across the industry that we're reporting. Just wanted to get a sense on what are the key reasons for it? I mean, we understand that 400 kV larger portion is scored there, scored as well as shunt reactors, but if you can throw some, you know, some color, some actual light as to how are the margins different in a 400 kV segment versus 220 kV. Is to is the difference really that large? Just wanted to get some clarity on it. And are the margins in the order book that we are having are they on the lower side or are they similar to versus what the business we are currently having here?
Abhishek Singhal (Kanohar Electricals Ltd): Thanks. Yeah, so, you know, as stated previously, we are focusing on the premium segments, in the market. So, those are like power transformer 400 kV and the shunt reactors and the Scott connected transformers. So, all of these have broadly a similar margin profile and that is what is reflected in our results. And, to answer a second question, the order book that we have has a broadly similar margin profile to the one that we have we have already executed.
Mihir Manohar (Trust Mutual Fund): Sure. Sure. Just, I mean, on the, this side. So not from not for you, because for us 220 kV is a smaller number. But let's say from an industry perspective, according to you, what how are the gross margins different for a 400 kV versus a 220 kV segment?
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