Supreme Power Equipment Ltd Q2 FY26 Earnings Analysis

- The company expects revenue to cross Rs. 200 crores in FY 2026, with 70-80% of current orders completing within the year (Page 8-9). - Expansion to a 6,000 MVA capacity plant expected to be fully operational by December 2025, enabling production ramp-up from January 1, 2026 (Page 17). - Enquiries and orders for larger transformers (up to 160 MVA and 230 kV class) are strong, signaling growth opportunities, especially for power transformers (Page 10, 8). - Market demand driven by renewable energy projects (solar, wind) and transmission infrastructure upgrades, with expected multi-year growth (5-year outlook positive) (Pages 6, 17). - Geographic expansion beyond Tamil Nadu to Kerala, Karnataka, Punjab, Telangana, and potential export markets (Saudi Arabia, UK) is underway to capture larger market share (Pages 11, 16). - Export orders under development could offer 1-2% higher margins than domestic sales (Page 7). - Sustainable EBITDA margins around 19-20% expected with operational scaling (Page 5, 6).

- Q1 FY26 showed strong performance with 27.8% YoY growth in total income and 31.05% growth in net profit, indicating positive momentum. - Management expects FY26 revenue to cross Rs. 200 crores, partly supported by expanded capacity from December 2025. - Margins are expected to sustain around 19%-20%, possibly improve slightly with higher-margin larger power transformers. - Expansion to produce up to 160 MVA transformers (vs. current 25 MVA) targets less competitive, higher-margin segment, supporting margin expansion by 1-2%. - New capacity expected to support Rs. 500-600 crores peak revenue over next 2-3 years. - Increased overheads and talent costs may be offset by improved margins from power transformers. - Order book stands at Rs. 198 crores with good visibility; strong demand expected for next 2-5 years driven by renewable energy growth. - EPS grew 30.88% in Q1 FY26 and likely to improve with scaling operations and operational efficiencies.

- Supreme Power Equipment Limited is undertaking a major capacity expansion to manufacture up to 160 MVA transformers with 230 kV class capabilities, significantly higher than the current 25 MVA capacity. - The expansion involves a new 6-acre facility, with civil work about 90% completed and machinery installation underway; expected to be fully operational by the end of December 2025. - The Rs. 21 crore fundraise via convertible warrants will be utilized over 18 months for software purchases, infrastructure (road, office), working capital, and general corporate purposes, complementing the larger expansion project (around Rs. 70 crore). - Post-expansion, the company aims to increase annual revenue capacity to Rs. 500-600 crores. - Plans to obtain certifications for transformers above 25 MVA to tap government utilities like PGCL and NTPC. - R&D investment is focused on online monitoring systems for transformer health and efficiency, expected within 2-3 months.

- Supreme Power Equipment Limited recently proposed a capital infusion of Rs. 21 crores via preferential allotment of 12,47,000 fully convertible warrants at Rs. 169 each. - The allotment is planned with 36% to promoter Rajmohan and 64% to non-promoter investors. - The fund usage includes machinery purchase, software systems, civil infrastructure development, and general corporate purposes. - This Rs. 21 crores raise will be utilized in stages over 18 months. - There is no mention of any new debt fundraising in the discussed sections. - The company focuses on utilizing its internal resources and the convertible warrant proceeds for the Rs. 70 crore expansion project. - No explicit future fundraising plans through debt or equity beyond the Rs. 21 crore convertible warrant issue were disclosed in the transcript.

- As of August 13, 2025, the consolidated order book stands at Rs. 198.12 crores. - Fresh order inflow in Q1 FY ’26 was Rs. 106.58 crores. - Approximately 70%-80% of the current order book is expected to be completed within the financial year. - Government orders constitute about 63%, and private sector orders make up around 37% of the order book. - The company has bids totaling more than Rs. 600 crores in the system, with an expected winning rate of 10%-20%, implying potential orders of Rs. 70-100 crores. - Expected additional order intake for the year is Rs. 100-150 crores, with balance orders served next year. - The company has received an order from KSEB worth Rs. 15 crores and is engaged in negotiations on multiple tenders. - The company is targeting to maintain an order book size of around Rs. 200 crores by the end of the financial year.