Chamunda Ele. Q1 FY26 Earnings Analysis

- Revenue is expected to grow from INR25 crores in FY 2025 to approximately INR31-33 crores in FY 2026, and further to around INR35.5-38 crores by FY 2027. - The company plans a 20% growth in Operation & Maintenance (O&M) vertical and a 25%-30% growth in testing services. - Solar division capacity is expected to increase from 1.7 MW to 4 MW by March 2026, with revenue from solar projected to rise from INR72 lakhs in FY 2025 to about INR1 crore in FY 2026, and significantly higher in FY 2027. - Order book execution of INR64 crores is spread over three years: ~INR20 crores in the first year, INR24 crores in the second, and the remainder in the third year. - The company expects steady EBITDA margins around 25%, supporting sustained revenue growth.

- Revenue targets: INR31-33 crores in FY '26, INR35.5-38 crores in FY '27. - EBITDA margin expected to sustain around 25%; historical margin rose from ~4% in 2022 to 23-25% recently. - PAT margin consistent at 12-13%, expected slight growth; FY '25 PAT margin ~13.27%, with 13.5% margin growth expected for FY '26. - O&M business projected to grow ~20%; testing vertical growth at 25-30%. - Solar capacity planned expansion from 1.7 MW to 4 MW by FY '26-27; revenue from solar expected around INR1 crore by FY '26. - Order book execution spread over 3 years, incremental revenue phased accordingly. - Sustainability of margins supported by major employee cost control and operational efficiencies. - Earnings growth driven by expansion into NABL certification and increased solar project capacity.

- Capex is planned across three verticals: O&M (Operation & Maintenance), testing with NABL certification, and solar power expansion. - Solar capacity is planned to increase from current 1.7 megawatts to 4 megawatts by March 2026-27. - Estimated capex for solar expansion is approximately INR 12-15 crores to be utilized equally across FY 2025-26 and FY 2026-27. - Investment in new testing equipment from Germany to enhance the testing division; orders placed but expected delivery after ~15-20 days. - Capex will also support expansion related to NABL certification, enabling reach beyond India. - Additional investments for substation commissioning projects and related kits and machinery, partially funded by IPO proceeds. - Currently debt-free after IPO fund utilization for debt repayment and working capital; no immediate plans for raising debt but considering future options for solar expansion.

- Currently, Chamunda Electrical Limited is a debt-free company after successfully repaying all debts using IPO proceeds. - The company utilized IPO funds for debt repayment, working capital, and pending machinery purchases. - There is no immediate plan for new debt or equity fundraising. - However, expansion plans, particularly in solar capacity growth to 4 megawatts, may require additional fundraising in the future. - Management mentioned the possibility of future fundraising if expansions evolve but has not synchronized or finalized plans yet. - Overall, future fundraising is under consideration but not actively planned or committed at this time.

- Current order book is INR 64 crores (as of June 2025). - Recent order of INR 30 crores received from GETCO in February 2025. - Order execution timeline: INR 20 crores expected in year one, INR 24 crores in year two, remaining in year three. - Company is at peak capacity with 118 substations currently under O&M contracts. - O&M contracts are typically 3 years minimum, extendable up to 5 years. - The company operates mainly in Gujarat with some testing services across India. - Competes with Siemens and Kintec as top players in this segment. - Plans to expand solar capacity, which will add to future order book and revenue streams.