Tempsens Instruments (India) Ltd (TEMPSENS) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to the Tempsens Instruments India Limited Q2 FY27 Earnings Conference Call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you and over to you, sir.
Mohit Kumar (ICICI Securities): Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q2 FY27 earnings call of Tempsens Instruments India Limited. Today, we have with us from the management, Mr. Vinay Rathi, Managing Director and Mrs Priyanka Menaria, CFO. We will begin with opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.
Vinay Rathi (Tempsens Instruments (India) Ltd): Yeah. Thank you, Mohit, and good afternoon, everyone.
Vinay Rathi (Tempsens Instruments (India) Ltd): Before we begin, a brief note, some statements made by me on today's call may be forward-looking and are based on management's current expectations. They are subject to risk and uncertainty and actual results may differ materially. Our H1 FY27 results are unaudited and have been subject to limited review by our stat auditors. Where we refer to peak revenue potential of new capacity, this is indicative revenue at full utilization. It is neither a forecast nor guidance. All figures we discuss today are consolidated and compares the first half of FY27 with the first half of FY26. H1, financial year '27 includes Tempsens Germany, Tempsens Polaska and Tempsens Measurement and Control, which were not part of the group in H1 financial year '26. Please refer to the disclaimer in the investor present presentation filed with the exchanges. Thank you for joining our second earnings call and our since, our first since listing on NSE and BSE on 28th August. Second second. Yeah. In the first half of FY27, our consolidated revenue grew 33.7% to ₹255 crores. Exports more than doubled to about 37% of our product revenue. EBITDA grew 12% to ₹55 crore and adjusted profit after tax grew 17% to ₹38 crore. For those who are new, I would just like to describe what we do. We measure temperature, we generate heat, and we connect it. So our three verticals, temperature sensing, electrical heating, and specialised cables often serve the same customers in the plants. What we make is make is engineered, made to order, made in India, supplied to the world. So first the listing, our IPO included a fresh issue of ₹95 crores. We have used ₹55 crore of it to repay debt as set out in the offer document, and our borrowings now are about ₹41 crore, roughly half of what they were in March '26. Second, our international business, export more than doubled in the half driven by addition of Tempsens Germany and Tempsens Polska and by sustained organic growth in our three export export markets. We also added a new office in Ajman, in UAE, to serve customers across Gulf. Third, seven products we spoke about earlier are now having a firm start, high temperature wiring harness for a OEM customer, standard furnaces for life science, OEM customer, and our laboratory furnaces, the standard furnaces are now ETL and CE approved. All being supplied in the, all the supplies are beginning in the second half of this year. Let me take you through all the three verticals, our export and our capacity expansion. First of all, let us speak about temperature sensing. Temperature sensing revenue grew 57% in the first half to ₹133 crore. It is now 53% of our product revenue. Part of this growth has come through the entities we have consolidated in this year. Organic growth in this vertical is about 25%. The organic growth is led by thermal power plants and other OEMs, including CVD equipment manufacturer, and we are now ramping up dispatches of sensors for fuel cells. Our order pipeline from the traditional business and the new OEM business remains firm and healthy. We also launched the L series of non-contact pyrometer, a combined also a combined thermal and visual camera for temperature monitoring and surveillance. Also, we are adding a brownfield plant of 50,000 square feet within unit one for contact sensors for the, mainly for the OEMs. And this plant remains on track to be completed by Q3 of FY28 with a peak revenue potential of ₹120 crore from this plant. Coming to the second section, electrical heating. Electrical heating revenue blew, grew 44% in the half to ₹47 crore, led by significant oil and gas dispatches in India, Southeast Asia and Middle East. Two milestones from the first half,
Vinay Rathi (Tempsens Instruments (India) Ltd): we completed a major certification for furnaces for supplies to our life science OEM customers, which will the supplies of which will begin in the second half. Secondly, these laboratory furnaces are now ETL and CE approved with bulk dispatches starting from Q3 of this year. We are also adding capacity of about 25,000 square feet for custom-built large furnaces. Second important area in this field is mid-voltage heaters, where we see these are central for electrification of large processes. We continue our expectation of certification by Q4 of FY '27. The new plant of about 50,000 square feet within unit 6 is on track to be completed by Q1 of FY '28. The peak revenue potential of this new plant will be INR 200 crores. Also we are in final stages of discussion with a automotive, manufacturer for prototype contract for for supply of AdBlue heaters eh for commercial vehicles. Which these would be used for emission control. We see high sales potential in this application and we will share more once the contract is finalized. Coming to the third part of our product offering, specialized cable. Specialized cable grew in the second half to about INR 74 crores as the business recovered from a soft first quarter. We executed orders in thermal power plants, oil and gas in Africa, chemical in India and supplies for our UN-certified high-temperature wire harness to OEM customer will begin Q3 of this year. We are cross-selling to them, to the same OEMs, that buy our sensors. Our oil and gas approvals in the Middle East are progressing well, and we expect expect to open newer export markets with these approvals. Unit 8, our new cable plant, is on track for completing in Q2 of FY '28 with peak revenue potential of about INR 60 crores. Also, our 50-50 joint venture with Victora, has signed an agreement to to acquire a facility of about 80,000 square feet, expected to be, commenced by Q4 of this year with peak revenue potential of about INR 120 crores. Now coming to export. So export revenue more than doubled in the first half to INR 94 crores, which is about 37 of our total product revenue against 25% last year. Tempsens Germany and Tempsens Polska contributed alongside sustained growth in South East Asia and Middle East. Organic export growth is about 45%. Domestic revenue has grown about 12% to INR 159 crores. We are also onboarding senior professionals from our industry overseas to strengthen our presence in the global market. Now coming to capacity expansion. So we are adding five projects which are commissioning between FY '27 Q4 and Q3 of FY '28 with the aggregated peak revenue potential of about INR 500 crores as full utilization. All five are on their announced timeline, and, this is a potential and not a guideline. With this, introduction, I will be I will hand over to Priyanka to take you through the financials.
Priyanka Menaria (Tempsens Instruments (India) Ltd): Thank you, sir. Good afternoon, everyone. All numbers we can share are consolidated for the first half of FY '27 against the first half of FY '26. I will cover growth, margin, profitability, and the balance sheet and cash flow. Our revenue from operations for the half was INR 255 crores, up by 33.7% from INR 190.7 crores. Total income was INR 259.4 crores, up by 33%. This numbers include Tempsens Germany, Tempsens Polska, and Tempsens Measurement and Control, which were not in the base period. Margin, EBITDA for the half was INR 54.9 crores, up by 11.9% from INR 49.1 crores at a margin of 21.2% of total income against 25.2% last year.
Priyanka Menaria (Tempsens Instruments (India) Ltd): of the first half was 45.7%, broadly in line with our full year level of 46% FY26. Employee cost grew 41% to 42.1 crore for main three reasons: we are building teams for new capacity, we invested in strengthening our corporate structure for future growth, and we added the newly consolidated entity. Employee cost also includes an ESOP charges of 1.1 crore against almost nothing last year. Other expense grew 37% to 25.6 crore. Profit before tax grew 11.7% to 44.5 crore. Finance cost were flat at 2.5 crore. The full benefit of the debt repayment will show from the next quarter. Profit after tax for the half was 35.7 crore, up by 18.1%. I want to be clear here, our tax charges include a deferred tax credit of 1.3 crore relating to the tax benefit on IPO expense. This is one-time item. On the balance sheet side, our IPO included a fresh issue of 95 crore and net proceeds of the company were 87.3 crore after issue expenses. We have used the full 55 crore against the debt repayment. Total borrowings at 30th September were 40.7 crore, against 77.9 crore at 31st March 2026. And our debt to equity ratio is now 0.06x from 0.1x, 0.15x. Of the remaining net proceeds, 7.5 crore is for capital expenditure in electrical heating and specialized cables and 14.1 crore for general corporate purpose. Both were unutilized at the time of September 30th, September 30th. Cash and working capital: our operating cash profit before working capital changes was 50.7 crore, up by 15.2-- 16.2%. Inventory rose by about 28 crore in the half to 139 crore to support the growth in our business. Receivables were slightly lower than the lower than in March at 83.1 crore, even as revenue grew. Capital expenditure for the half was 36.7 crore, of which 26 crore was leasehold land for the expansion of specialized cables. The rest went into the plant and equipment, 5.9 crore and project under construction at 4.8 crore. With that, I hand back to the promoter.
Vinay Rathi (Tempsens Instruments (India) Ltd): Thanks, Priyanka. So we continue to expect revenue growth this year to be in line with the blended growth over the last three years. And the first half is tracking ahead of this range helped by entities we consolidated. On profitability, the first half carried our investment in people, capacity, and corporate structures made us ahead of growth. As supplies of harness cable and furnace start and the OEM sen- sensors ramp up in the second half, we expect the profitability to improve progressively. To sum up, in the first half, revenue grew by a third, exports more than doubled, EBITDA grew almost 12%, our balance sheet is stronger after IPO, and several new products and projects being begin supplies in the second half of this year. We see a strong second half now. We are engineered, made to order, Made in India, made for the world. And thank you. We are happy to take any questions.
Moderator: Thank you very much. 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, let's wait for a moment while the question queue assembles. The first question is from the line of Naman Parmar from Niveshay Investments. Please proceed.
Naman Parmar (Niveshaay Investment): Yeah. Good afternoon, sir. Thank you so much for the opportunity. So, firstly, I wanted to
Naman Parmar (Niveshaay Investment): in the overall, on the, specifically on the gross margin side, like currently in the quarter, there was a very big blip in the gross margin compared to previous years, right? So, what would be the reason for that, even though, you know, order book are for 3 to 4 months, right? So, the major orders are at a fixed price, so raw material prices impacted. And going forward, what to expect, similarly?
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