Shilchar Technologies Ltd (SHILCTECH) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Avendus Spark): Ladies and gentlemen, good day and welcome to the Shilchar Technologies Q2 & H1 FY'27 Earnings Conference Call, hosted by Avendus Spark. 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 "*" then "0" on your touchtone phone. I now hand the conference over to Mr. Ravi Swaminathan from Avendus Spark. Thank you, and over to you, sir.
Ravi Swaminathan (Avendus Spark): A warm welcome to everybody to the Q2 FY'27 earnings call of Shilchar Technologies. To take us through the results today, we have with us from the management, Mr. Alay Shah, Chairman and Managing Director; Mr. Ashesh Shah, Executive Director; Mr. Aatman Shah, Executive Director; Mr. Rajesh Purohit, Chief Financial Officer; and Mr. Nilesh Pandya, GM Finance and Accounts. We will start with a brief opening remark of the business performance of the quarter from Mr. Alay Shah, and then open the floor for Q&A. Thank you and over to you, sir.
Alay Shah (Shilchar Technologies Ltd): Good morning, everyone. Thank you for joining us today. Before we open the floor for questions, I would like to walk you through the performance for the second quarter of FY'27 and share some updates on our operation and ongoing CapEx. For Q2 FY'27 Shilchar Technologies reported revenue from operation of ₹192.61 crores, up 43% over Q1 FY'27, and up 12% over Q2 FY'26. EBITDA excluding other income stood at ₹40.06 crores, with an EBITDA margin of 20.8%. Profit after tax for the quarter stood at ₹32.98 crores with a PAT margin of 16.5%. As you can see from the top-line growth, business momentum picked up notably in Q2 after a slow start to the financial year in the Q1. As we discussed on our last call, Q1 performance was a result of continuing effect of that
Alay Shah (Shilchar Technologies Ltd): West Asia, which weighted on our exports. On the export front conditions in the Middle East improved during the quarter, but they are yet to fully normalize. The higher shipping and logistic costs we highlighted in previous quarter have not eased much. At the same time, export to North America have gained momentum following the resolution of the tariff-related challenges of earlier quarters. The pick-up in North America exports has helped offset part of the shortfall in dispatches to the Middle East. On the domestic front, demand has remained very firm throughout. On profitability, our EBITDA margin improved to 20.8% in Q2 from 15.4% in Q1. We expect conditions for export to improve further in the near future. This should translate directly into higher export share in our revenue mix and in turn a further improvement in margin over the coming quarters. On the project front, expansion Phase 3, which will add 6,500 MVA of capacity, is progressing as per plan, with commissioning expected in April '27. Civil foundation work, PEB erection, and utility infrastructure work are in progress and all major production equipment has been ordered. This will take our total capacity to 14,000 MVA and drive the next phase of growth from FY '28 onwards. As for the current year, we remain on track with our revenue target of FY '27 of rupees 750 crore, with a heavy orders in hand and delivery scheduled for the second half of the year. We continue to see robust order inquiries from both domestic and export clients. With that, I thank you all and we can now open the floor for questions.
Moderator (Avendus Spark): Thank you very much, sir. We will now begin 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 may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aadesh Gonsalia from Spark Capital. Please go ahead.
Aadesh Gonsalia (Spark Capital): Hello sir. I hope I am audible.
Alay Shah (Shilchar Technologies Ltd): Yes, I can hear you.
Aadesh Gonsalia (Spark Capital): Yeah. I had a couple of questions. The first on the working capital, pricing and the margin outlook that we have. So I during H1, the net working capital has increased to around 200 crores, including the rise in the financial assets to around 29 crores and higher receivables. So if you can, you know, shed some light on some color on how how this has fared and what is how sustainable this is. And whether for the second half, we may see some, see some improvement, or whether this is going to continue. And on the raw material prices also, that how they have fared. And in the in the Q1, we had said that the new orders are as per the market prices. But how much of that has we been, like, the pass-through has been happening well, or how and how do we see the gross margins fairing here from hereon? The margins came in at 29%. Gross margins came in at 29% for for the for Q2, but do we see it going higher from hereon? Or what's the outlook that we have? That's the first question, sir.
Alay Shah (Shilchar Technologies Ltd): So, we don't face any problem, or we don't see any, you know, alarming situation for working capital utilization. I mean, we have said this in past that since we have a surplus fund, and we don't use any bank facility for working capital, we, you know, earn interest out of the customer, which established LC on us for the supply of transformers. So, that is why it looks that, you know, on the paper, that we are utilizing more working capital, but actually we are earning interest on that. The RM prices have stabilized, again, it is not as what it used to be. And, I don't think that it will completely stabilize till all the, you know, Middle East crisis and other things gets, you know, concluded. But, all the orders what we are getting now is as per the market price, as per the current raw material
Alay Shah (Shilchar Technologies Ltd): And going forward, like I said in my opening speech that the margins will improve with the higher sales of domestic as well as export market.
Aadesh Gonsalia (Spark Capital): Okay. And and, sir, you didn't What about the financial assets going up to 29 crores and the receivables having higher? So, any outlook on that? What are the financial assets that have increased and as well as the receivables going up in the first half? So,
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