Sahasra Electronic Solutions Ltd Q1 FY27 Earnings Analysis

- Target to reach peak revenue of around Rs.600 Crores by FY2029, combining EMS and semiconductor units. - Beyond FY2029, aim for 65%-70% revenue from EMS business and 30%-35% from semiconductors. - Expect semiconductor demand in India to grow 5x, reaching $150 billion from $30 billion currently. - Plan to increase semiconductor business revenue from Rs.15 Crores to Rs.50 Crores in current year. - EMS business standalone expected to grow from Rs.210-215 Crores (FY2027) to around Rs.300 Crores by FY2028. - Combined with the separate entity, revenue target is Rs.650-700 Crores within 3-5 years. - Domestic market presence to strengthen with increasing utilization at Bhiwadi facility from 22% towards 40%+. - Growth driven by increased wallet share from existing customers plus new customer acquisition. - Overall company expects more than 4x growth over next 3-4 years aligned with India's electronics market expansion.

- The company aims to reach peak revenue of around Rs.600-650 Crores by FY2029, with 65-70% from EMS and 30-35% from semiconductor business. - Semiconductor business is expected to break even by FY2027-28 and grow to Rs.150-250 Crores revenue, with EBITDA margins stabilizing at 10% and contributing positively to consolidated PAT. - Overall consolidated PAT margin is targeted at 16-17% post semiconductor profitability. - The company expects a consolidated PBT margin of about 15% in stable state. - FY2026 PAT was Rs.12.1 Crores showing improved profitability; EPS expected to grow with increasing scale and profitability. - Focus on engineering and R&D to improve supply chain and enhance value-addition to mitigate raw material risks and support long-term sustainable profit growth. - Continued strong cash flow focus, with positive cash flow expected by FY2028.

- Sahasra Electronic Solutions Limited plans to invest selectively in technology-related equipment primarily for engineering and testing capability enhancement. - Heavy investment in equipment is not anticipated unless large contracts materialize, which would necessitate scaling up. - IPO proceeds have been partially kept in fixed deposits (~Rs.40 Crores) earmarked for capital expenditure, available for procuring new machines as required. - The company follows a disciplined approach, aligning capex with production and demand growth to maintain strong cash flow. - The semiconductor business, being capital intensive, will see focused investments including applying for ISM 2.0 and advanced packaging to increase value addition. - Management remains open to external funding (debt or equity) if needed to support growth, particularly post-FY2028. - Overall, capex outlook is cautious but prepared to scale based on demand and large contract opportunities.

- The company is open to various funding options if needed to support healthy and positive demand growth. - This includes raising funds through debt or other sources beyond conventional borrowings. - Currently, except for the semiconductor company, there are no long-term borrowings. - Working capital borrowings are significantly lower than approved limits. - The company has strong cash flow principles aiming for positive cash flow. - Any future fundraising would likely be considered around FY2028 or onwards, aligned with business scaling needs.

- As of March 31, 2026, Sahasra Electronic Solutions Limited has an executable order book of approximately Rs. 68.5 Crores. - This provides visibility for the coming quarters. - The company continues to see strong inquiry activity and improved conversion rates across multiple industry verticals. - The order pipeline remains healthy from both domestic and export markets, reflecting balanced revenue diversification. - The company benefits from increased demand in the semiconductor segment, driven by shortages related to AI growth. - Long-term customer relationships and repeat business provide reasonably stable ordering forecasts and visibility.