Any current/future new fundraising through debt or equity?

The company’s planned investment of around ₹300 crore will be executed in three phases. The first phase of investment is already done. Funding so far includes some debt from banks and internal accruals. There is no major equity dilution planned currently. However, a small equity dilution might happen from September onwards. The company aims to keep the debt-to-equity ratio below 50-60% of total equity. Overall, financing will primarily be through internal accruals and debt. No large-scale equity fundraising is planned at this stage.

Any current/future capex/capital investment/strategic investment?

Servotech is planning a major capex of around Rs. 300 crore over three phases. The first phase has already been invested, including some debt taken from banks. There might be small equity dilution from September onward but no major dilution planned currently. The new factories are planned for FY 2025-2026 and targeted to be operational before October. Current production capacity can handle approximately 2.5 times last year’s turnover. The company is focusing on backward integration, manufacturing components in-house to strengthen technology grip. Investment in technology and capacity expansion

Future growth expectations in sales/revenue/volumes?

The company aims to double revenue, targeting 500-600 crores in the near term, with about 65% from EV chargers and the rest from solar products. (Page 15) Expecting 90-110% growth in revenue this year, reflecting aggressive expansion ambitions. (Page 15) The EV charger market in India is projected to be over Rs. 1.5 lakh crores in the next 6-7 years. (Page 12) The company has bid for tenders worth over 2,000 crores, expecting to capture 15-20% share, translating to potential revenues of 500-600 crores. (Page 14) Production capacity to increase 2.5 times current turnover with new factor

Future growth expectations in earnings/operating earnings/profits/EPS?

EBITDA saw a significant improvement, increasing by 415.3% from ₹1.4 crores in Q1 FY23 to ₹7.1 crores in Q1 FY24; margin improved from 4.3% to 8.9%. PAT improved sharply from ₹36 lakhs in Q1 FY23 to ₹4.1 crores in Q1 FY24; margin rose from 1.1% to 5.1%. The company expects continued margin expansion driven by higher value-added products and increasing scale of operations. Revenue grew substantially by 148.9% from ₹32.07 crores in Q1 FY23 to ₹79.81 crores in Q1 FY24, fueled by strong demand for EV and LED products. Management targets doubling turnover with strong order book and contract

Current/ Expected Orderbook/ Pending Orders?

Current fixed order book through channel sales and digital e-commerce is around Rs. 60-70 crores (Page 6). For the next quarter, contracts worth about Rs. 90 crores are expected to be received (Page 6). The company has bid for contracts worth Rs. 2000 crores in total (Page 7). Taking a conservative estimate of 20% conversion, expected order inflow could be around Rs. 500-600 crores (Page 7). Completed orders worth Rs. 80 crores have been mentioned recently (Page 14). Orders include supply, installation, commissioning, and maintenance of EV chargers (Page 7). The company maintains that until a

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Servotech Renewable Power System LtdQ2 FY24Electrical Equipment

Servotech Renewable Power System Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹99.8P/E: 59.2Market Cap: ₹2.1K CrSector: Electrical Equipment

Management growth scorecard

Revenue

Category 1

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

→The company aims to double revenue, targeting 500-600 crores in the near term, with about 65% from EV chargers and the rest from solar products. (Page 15)
→Expecting 90-110% growth in revenue this year, reflecting aggressive expansion ambitions. (Page 15)
→The EV charger market in India is projected to be over Rs. 1.5 lakh crores in the next 6-7 years. (Page 12)
→The company has bid for tenders worth over 2,000 crores, expecting to capture 15-20% share, translating to potential revenues of 500-600 crores. (Page 14)
→Production capacity to increase 2.5 times current turnover with new factories planned to be operational by FY 2025-2026. (Page 23)
→Investment of more than Rs. 300 crores planned for expansion in EV chargers and technology capacity. (Page 17 & 21)
→Internal accruals and debt will primarily finance growth, with modest equity dilution possible from September onwards. (Page 21)

Margin guidance

Category 3

→EBITDA saw a significant improvement, increasing by 415.3% from ₹1.4 crores in Q1 FY23 to ₹7.1 crores in Q1 FY24; margin improved from 4.3% to 8.9%.
→PAT improved sharply from ₹36 lakhs in Q1 FY23 to ₹4.1 crores in Q1 FY24; margin rose from 1.1% to 5.1%.
→The company expects continued margin expansion driven by higher value-added products and increasing scale of operations.
→Revenue grew substantially by 148.9% from ₹32.07 crores in Q1 FY23 to ₹79.81 crores in Q1 FY24, fueled by strong demand for EV and LED products.
→Management targets doubling turnover with strong order book and contracts valued around ₹2000 crores, with about ₹500-600 crores potentially realizable.
→Planned capex for FY25-26 aims to increase capacity 2.5 times, supporting future growth in EV chargers and other verticals.
→The company intends to maintain debt-to-equity ratio below 50-60% and may consider minor equity dilution if needed.
→Strategic focus remains on niche, high-margin products rather than commodity LED segments.

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Fundraise plans

Yes

→The company’s planned investment of around ₹300 crore will be executed in three phases.
→The first phase of investment is already done.
→Funding so far includes some debt from banks and internal accruals.
→There is no major equity dilution planned currently.
→However, a small equity dilution might happen from September onwards.
→The company aims to keep the debt-to-equity ratio below 50-60% of total equity.
→Overall, financing will primarily be through internal accruals and debt.
→No large-scale equity fundraising is planned at this stage.

Order book

Yes

→Current fixed order book through channel sales and digital e-commerce is around Rs. 60-70 crores (Page 6).
→For the next quarter, contracts worth about Rs. 90 crores are expected to be received (Page 6).
→The company has bid for contracts worth Rs. 2000 crores in total (Page 7).
→Taking a conservative estimate of 20% conversion, expected order inflow could be around Rs. 500-600 crores (Page 7).
→Completed orders worth Rs. 80 crores have been mentioned recently (Page 14).
→Orders include supply, installation, commissioning, and maintenance of EV chargers (Page 7).
→The company maintains that until a confirmed order is received, it cannot be considered as an order (Page 19).

Capex plans

Yes

→Servotech is planning a major capex of around Rs. 300 crore over three phases.
→The first phase has already been invested, including some debt taken from banks.
→There might be small equity dilution from September onward but no major dilution planned currently.
→The new factories are planned for FY 2025-2026 and targeted to be operational before October.
→Current production capacity can handle approximately 2.5 times last year’s turnover.
→The company is focusing on backward integration, manufacturing components in-house to strengthen technology grip.
→Investment in technology and capacity expansion aligns with ambitions to rank among the top 2-3 companies in EV chargers.
→Internal accrual and debt will be the major financing sources for expansion; debt-equity ratio aimed not to exceed 50-60%.

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