Tembo Global Industries LtdQ1 FY27
Tembo Global Industries Ltd Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹58.1P/E: 10.6Market Cap: ₹1.1K Cr
Management growth scorecard
Revenue
Category 2
Margin
Category 1
Fundraise
N/A
Order
Yes
Capex
Yes
3 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 2- →FY28 revenue guidance will be provided in due course, with a positive growth outlook based on past CAGR and current performance.
- →INR 1,600 crores revenue target for FY27, driven by Engineering & EPC, solar, defense, and aerospace segments.
- →Defense revenue expected at INR 300-350 crores from ammunition and INR 100 crores from aerospace by FY28.
- →Solar projects anticipated to initiate commercial operations within FY27, adding stable recurring revenue.
- →Current order book stands at INR 1,500 crores with a bidding pipeline over INR 2,400 crores.
- →Vasai facility utilization to increase from 35-40% currently to 65-70% by FY27-end, with peak utilization targeted within 1.5-2 years.
- →Overall, sustained growth expected across key verticals supported by expanding manufacturing capacity, strong order pipeline, and strategic defense/aerospace initiatives.
Margin guidance
Category 1- →Tembo targets a revenue guidance of INR 1,600 crores for FY27, backed by a healthy order book of INR 1,500 crores and a pipeline of INR 2,400+ crores.
- →Engineering and EPC segment is the primary growth driver, with a 172.7% YoY growth and improved margins.
- →EBITDA margins expected to be around 16-18% at the company level.
- →Defense vertical aims for INR 300-350 crores revenue by FY28 with 45%-50% EBITDA margins and 30%-35% PAT margins.
- →Aerospace division targets INR 100 crores revenue by FY28 at approximately 45%-50% EBITDA margin.
- →Solar business IRR expected at 15-16% with stable recurring cash flows; commercial operations to commence during FY27.
- →Vasai facility capacity utilization expected to reach 65-70% by FY27-end and peak utilization within 1.5-2 years.
- →Profit after tax grew 55.3% YoY to INR 31.2 crores in Q1 FY27 with PAT margin improving to 10.3%.
Fundraise plans
- →Currently, no definite decision on new fundraising; it is a strategic decision to be made after management discussion.
- →Shabbir Merchant stated that any future fundraising will be notified to the exchange as required.
- →Defense expansion requires additional borrowing: around INR 200-250 crores of debt planned in the first phase out of a total INR 550 crores investment.
- →Current consolidated debt is around INR 400 crores, including solar-related debt (~INR 350 crores).
- →No additional debt required for solar business beyond the existing INR 350 crores.
- →Future funding needs for defense and other growth plans, including possible equity and internal accruals, are under consideration.
- →No explicit mention of equity fundraising; focus is on strategic timing and necessity before any new fundraising.
Order book
Yes- →Current order book stands at approximately INR 1,500 crores.
- →The pipeline of projects being bid on is around INR 2,400 crores plus.
- →The order book and pipeline are dynamic, with ongoing bids and new orders expected each quarter.
- →The company aims for continuous growth in order inflow to support its ambitious expansion plans.
Capex plans
Yes- →Tembo Global is investing strategically in manufacturing capacity, EPC execution capabilities, solar projects, defense infrastructure, and aerospace initiatives to support expansion.
- →The company acquired land in Amravati for developing a defense manufacturing facility with construction planning underway.
- →Commercial production at Amravati defense facility is expected to start by Q4 FY27.
- →A new aerospace joint venture with JR UAV Europe Italy and JR PROPO Japan is set to begin UAV component manufacturing at the Vasai facility starting Q3 FY27.
- →Solar projects are advancing steadily, with several sites operational and others slated for commissioning in Q2 FY27.
- →Defense business CAPEX for the first phase is around INR 550 crores, including INR 200-250 crores of debt.
- →The Vasai manufacturing facility expanded to 1 lakh metric tons capacity, targeting 65-70% utilization by FY27-end and peak within 1.5-2 years.
- →Additional facility expansion planned for defense and UAV production beyond Vasai and Amravati as needed.
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Margin guidance
Category 1- →Tembo targets a revenue guidance of INR 1,600 crores for FY27, backed by a healthy order book of INR 1,500 crores and a pipeline of INR 2,400+ crores.
- →Engineering and EPC segment is the primary growth driver, with a 172.7% YoY growth and improved margins.
- →EBITDA margins expected to be around 16-18% at the company level.
- →Defense vertical aims for INR 300-350 crores revenue by FY28 with 45%-50% EBITDA margins and 30%-35% PAT margins.
- →Aerospace division targets INR 100 crores revenue by FY28 at approximately 45%-50% EBITDA margin.
- →Solar business IRR expected at 15-16% with stable recurring cash flows; commercial operations to commence during FY27.
- →Vasai facility capacity utilization expected to reach 65-70% by FY27-end and peak utilization within 1.5-2 years.
- →Profit after tax grew 55.3% YoY to INR 31.2 crores in Q1 FY27 with PAT margin improving to 10.3%.
Order book
Yes- →Current order book stands at approximately INR 1,500 crores.
- →The pipeline of projects being bid on is around INR 2,400 crores plus.
- →The order book and pipeline are dynamic, with ongoing bids and new orders expected each quarter.
- →The company aims for continuous growth in order inflow to support its ambitious expansion plans.
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