Tembo Global Industries Ltd Q1 FY26 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 2
Margin
Category 1
Fundraise
Yes
Order
Yes
Capex
Yes
4 of 5 growth signals are positive — a strong management growth story.
Full analysisRevenue guidance
Category 2- FY 2025-26 revenue guidance is Rs. 1,100 crore (conservative), with potential for higher achievement.
- FY 2026-27 revenue expected to grow around 30-35%, targeting Rs. 1,400 to Rs. 1,500 crore.
- Strong order book of Rs. 1,350 crore and L1 bidding pipeline of Rs. 2,000 crore supports growth.
- Defense segment revenues expected to start from FY 2025-26, contributing Rs. 300 crore+ in phase 1 and Rs. 650 crore+ in phase 2.
- Solar segment commissioning expected by FY 2025-26 end, supported by 25-year PPA agreements.
- Engineering and EPC divisions to continue driving volume growth, with six-fold capacity expansion in process.
- Revenue growth driven by diversification into high-growth sectors like defense, solar, and EPC, phasing out legacy textile business gradually.
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Fundraise plans
Yes- The company plans to raise debt of around Rs. 550 crore to Rs. 600 crore to finance solar and defense projects.
- Current gearing ratio is around 1:1; post raising debt and equity, gearing is expected not to exceed 2:1.
- A preferential equity issuance is being closed soon, aimed at raising capital primarily for working capital and defense investments.
- Equity infusion and debt raising are planned to fund CapEx and support business expansions in solar, defense, and EPC segments.
- The equity raise is scheduled via a board meeting and is expected to provide financial closure for planned projects.
- Existing investments include around Rs. 100 crore already invested in the solar segment.
- Land acquisition and subsidy discussions for defense projects are ongoing, linked to further equity and debt use.
See what Tembo Global Industries Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- **Defense Segment**: Planned investment of around Rs. 1,000 crore over the next three years, including Rs. 700 crore in the first phase (assets on book) and Rs. 300-350 crore in the next two years for expansion. Technology transfer from a European partner with 100% production buy-back arrangement. Land acquisition for 100 acres ongoing in Amravati, Maharashtra.
- **Solar Segment**: Investment includes Rs. 100 crore already invested with financial closure achieved (debt and equity). Expansion includes a 120 MW solar power project with a 25-year PPA, commissioning expected by FY ‘26 end. Additional loans and land acquisition for 10 out of 30 sites underway.
- **EPC and Engineering**: Six-fold capacity expansion plans including ERW pipes and channels manufacturing units.
- **Funding**: Preferential equity issue closing soon; debt raising of Rs. 500-600 crore planned for solar and defense projects while maintaining a gearing ratio around 2:1.
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Margin guidance
Category 1- FY ‘26 guidance: Revenue around Rs. 1,100 crore (conservative), with PAT expected between Rs. 80 crore to Rs. 100 crore.
- PAT margin expected to improve from current 7.7% towards 10% with increasing EPC contribution.
- FY ‘26-27 projections: Revenue around Rs. 1,400 crore to Rs. 1,500 crore; PAT anticipated to exceed Rs. 200 crore.
- Defense segment expected to contribute Rs. 250-300 crore revenue by FY ‘27 with around 25%-27% PAT margin (~Rs. 85-90 crore).
- Long-term growth from defense and solar sectors with phased revenue build-up, targeting Rs. 1,000 crore revenue in defense by FY ‘30.
- Order book strong at Rs. 1,350 crore with Rs. 2,000 crore in L1 pipeline; conservative 50-60% conversion expected.
- Operating cash flows currently negative due to investments and working capital, expected to improve as defense projects ramp up.
Order book
Yes- As of June 30, 2025, the order book stands strong at approximately Rs. 1,350 crore.
- The company has identified a significant EPC-designated project worth Rs. 600 crore.
- An initial Rs. 24 crore order for this EPC project was secured in Q1 FY '26, with an additional Rs. 50 crore currently under negotiation.
- The L1 order bidding pipeline is valued at around Rs. 2,000 crore.
- Tembo expects to convert roughly 50% to 60% of its bidding pipeline into confirmed orders.
- The Northern India Water Treatment Plant project valued at Rs. 1,500 crore is ongoing, with Tembo aiming to secure between one-third to two-thirds of the order.
- Orders keep flowing in phases as drawings are received from the main client.
- The company has also submitted bids for international projects totaling about Rs. 800 crore.
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