Exicom Tele-Systems Limited (EXICOM) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Exicom Tele-Systems Limited Q3 FY '26 Earnings Call hosted by Monarch Networth Capital Limited. [Operator Instructions] This conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani. Thank you, and over to you, sir.

Yes. Thank you, Naisa. Good afternoon, everyone. On behalf of Monarch Networth Capital, it's my pleasure to host the senior management of Exicom Tele-Systems. We have with us Mr. Anant Nahata, Managing Director, CEO of the company; and we have Mr. Shiraz Khanna, CFO of the company. We will start the call with opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.

Thank you, Rahul. Good afternoon, dear shareholders. This is Anant Nahata, MD and CEO of Exicom Tele-Systems. I welcome you to our third quarter FY '26 earnings call. Quarter 3 was another stable quarter for Exicom, where we delivered superior growth in quarter 3 compared to quarter 3 of last year and almost a similar quarter as quarter 2 of FY '26 with a stand-alone revenue at INR 234 crores, EBITDA of INR 16 crores and PAT of INR 3.5 crores. On Tritium, which was one of the big bold bets of the company, we are working methodically on scaling revenues and turning around customer sentiment. And today, with all the work done, we are not only eyeing Tritium's EBITDA breakeven later part of FY '27, but also now continuously strengthening revenues and EBITDA from current quarter, Q4 FY '26 onwards, something we are very excited by. So I'm going to take you through our details of both our businesses and Tritium as well. Starting with Critical Power on Page 5 of our investor presentation, which was uploaded a short while ago. Last year -- as you know, Critical Power is heavily reliant upon telecom infrastructure being created or being upgraded. That's where we get our business from. And last year, the rollout was quite timid because the CapEx had been done by telcos and the focus was ROI optimization. Also, there is various cost increases on account of steel power rentals. However, for fiscal '27, the estimated CapEx plan, which includes both new build and upgrade of old sites, is more than 120,000 towers or sites by various telcos and towercos as per our management estimates and discussions with our customers. And this investment has already started from Q3 FY '26 onwards. And that's why you see on a stand-alone basis, there is almost a 100% jump in our revenues versus Q3 FY '25 and about 2% jump in revenues versus Q2 FY '26. We did INR 164 crores of revenue in quarter 3. On a consolidated basis, again, there is almost 100% jump in revenue, 98% to be precise and similar revenues as in Q2. The open order position for Critical Power is strong. It's more than INR 1,400 crores, which will be delivered over the next 24 to 30 months maximum. On Page 6, you see our product portfolio of Critical Power, which includes very high technology power conversion modules, which includes various systems, which go in many parts of the telecom network, be it a switching center, tower site, a renewable site or a very small cell WiFi site at crowded places like airports or railway station. We also do lithium-ion batteries for telecom and controllers to manage all that or in a nutshell, Exicom is a company which serves entire energy needs of the telecom market. Key highlights of Critical Power in Q3 as listed in Page 7. Our marquee project where our products are going in the BharatNet project. That's a marquee project for us. We are supplying hybrid UPSs, batteries, smart rack with many sensors as a solution to this critical government last-mile and mid-mile connectivity program for more than close to 1.5 lakh panchayats. We continued execution for key system integrators who have won this contract, which includes RVNL, HFCL, NCC and now we have secured formal purchase order from ITI as well. This represents more than 50% market share of our products in this program. We also secured, as I was alluding to, large CapEx programs being started by telcos and towercos. In alignment with that, we have secured a very large purchase order for DC power systems from one of India's biggest telecom players. Also in continuation to the ongoing projects and receipt of these large orders, we are continuing to work on some of the projects which were highlight of our revenue in the last 2 years. One such project is what we call as UCV Project. This is to connect uncovered villages in the border areas, rural areas, it's a USO-funded project, where in Q3, we concluded the phase 1 supply of the project. And now phase 2 is going to start from FY '27 onwards. Battery energy storage is another area which as a company we have been looking at closely. While the market for this is phenomenally huge, but it was important for us to have a differentiated offering and figure out where to play in this market. We are not playing in the utility scale or distribution transmission scale, but have products for commercial, industrial category. And this quarter, we have been able to make a breakthrough in this category with initial orders of about INR 10 crores secured, and we hope to build on this in FY '27. As I mentioned, for the domestic market, we have healthy and robust pipeline of almost INR 1,400 crores in terms of orders. Our goal is not to just be active in the domestic market. That will always be the center of our sales, but it's important to diversify markets and grow into exports, where particularly in Critical Power, we cater to Africa and Southeast Asia. For these markets, we have launched some new products, including a higher capacity battery, a new outdoor platform, which combines various components required for the telecom energy infrastructure and always -- and also some technology solutions required for those specific markets. We supplied a pilot lot to the biggest towerco in Africa. In FY '26, the sales are out of pilot lot. But in FY '27, we expect this to be continued to continuous orders. We also strengthened our relationship with existing customers in countries of DRC, Nigeria by bagging more market share. Our Q3 export revenue was at 10% of sales in FY '27, our objective will be to grow exports to about 20% of the sales. Next page. Page #8, in line with investments being undertaken for telecom energy infrastructure by various telcos and tower companies, combined with some of these opportunistic programs, which are either by BSNL or state utilities, et cetera, we think there are opportunities to make this Critical Power business into close to INR 1,000 crore business going forward for FY '27. That's where we have set our target and eyes on. This is not a revenue guidance, but overall, with the investment happening in the sector, we are really hopeful to grow substantially over current year's performance in Critical Power. As I've mentioned to you, Critical Power is a cyclical business, which in low years is 2%, 3% growth when there is stability in telecom investment, means not much investment. But with -- in years where there is significant tower addition with the launch of new technologies such as 5G, 6G, the investment becomes multifold, and those are the years we sometimes grow 20% to 30%. So on an average, this is a sector which is mature, which grows by 8% to 10% year-on-year. But there are some years which -- where this business will grow on 3% to 5%, and there are some years where it will grow 20% to 30%. And we hope FY '27 is one of the latter type of years. With this, I want to move to a quick update on EV charging business. This is on Page 10. So India, EV has been part of a political debate lately on a global level, especially in U.S., where a lot of EV-related subsidies are pulled back, a lot of EV-related investments have been pulled back. But on an overall basis, this is a market which continues to be very exciting. It's still growing even in U.S. and mainly in Europe, but definitely in the developing world, including India. You see in quarter 3 FY '25 from 30,000 passenger car sales, we have reached to a level of 50,000 passenger car sales every quarter. That is similar to last quarter as well. And we have seen steady registration of buses -- e-electric buses as well over the past 4, 5 months. The market degrew by about 3% in quarter 3 versus quarter 2. However, we grew at 4% on a stand-alone basis from about INR 66 crores to INR 70 crores -- from INR 67 crores to INR 70 crores. On a consolidated basis, which includes Tritium, our revenue are lower by about 4%. Page 11, as I spoke about the market, the political sentiment, the general sentiment from state government, from OEMs continues to be very positive. There are many states where there is exemption of tax, registration tax, et cetera, on electric vehicles, Tamil Nadu being the latest. There have been new launches of the vehicles. As long as the new launches continue to be there, the sales of EVs will continue to rise. Everybody is looking forward to the Maruti launch of EV, and there is higher and higher focus on localization as well. Page 12. This is one of the offerings which we informed to all our shareholders in quarter 2, Exicom One. This is not just supply of EV chargers, but construction of the entire site, which includes planning, commissioning, civil and electrical works, hardware, implementing remote sensors and software for advanced monitoring. All these things come together under our offering called Exicom One. This obviously gives us higher revenue per site than just the hardware, but also puts us in a bracket where very few players operate. This has found success and a lot of uptake, particularly by some of the OEMs as well now some of the CPOs as well who do not have their own internal bandwidth and tools to execute such large projects. We are working on this model with at least 3 big customers at this point and hope to expand this offering further in quarter 4 of FY '26, this current quarter. Key highlights of quarter 3 apart from Exicom One on Page 13. We installed the first Tritium charger in India. Tritium is a product mainly aimed at U.S. and Europe. However, it may not be a mass product for India today, but we hope for it to be a mass product in 2, 3 -- 2 years from now. And moreover, this first installation really paves the way for showcasing and pitching to various CPOs and OEMs, particularly at very marquee sites. Exports is a focus in EV charger as well. After a lot of hard work, we received UL certification for our spin AC chargers, the home chargers and various discussions initiated to start exporting this product, and there have been some significant developments in Middle East region as well. We have added new customers across our portable charger, 3.3 kilowatt portable charger across multiple new CPOs. We also started DC charger for a 2-wheeler OEM and bagged business from some electric truck OEMs. Electric truck is not something you would have heard of from an electrification point of view as a focus of the industry in the previous years, but now it has become a big focus area and interesting area for us as well. We have added business across these segments, across new players, which means today, we don't have dependency on 1 or 2 large customers, but have many, many customers across multiple segments to help us to grow our revenue. Page 14 shows our entire product category. This keeps on getting bigger every couple of quarters right from portable charger called as Spin Free in the first column to a very high-power ultrafast chargers of Tritium towards the end. We have everything in between, which means we are able to cater to any kind of EV charger application today in India. Page 15 shows our revenue by geography. So in EV charger, we are a global company. The center of revenue still being India at about almost 59%, 60% of our revenue comes from India. Why? Because of Tritium. 11% comes from U.S., 20% comes from U.K. and Europe and about 10% comes from Australia and New Zealand. And we expect these percentages to significantly change in the upcoming year, and that's where I come to update on our subsidiary company, Tritium. So I'm happy to say as management, we feel that stabilization phase of Tritium is over now. We have spent 15 months, a lot of funds to stabilize -- to go through the stabilization phase. And now we are entering into what we call as the growth phase of Tritium. Quarter 3 results do not reflect that, but quarter 4 FY '26 revenue is estimated to be the first double-digit million dollar revenue quarter for us since our acquisition. It may not be a big number from a global industry perspective, but it marks a definitely very important milestone for Exicom since acquisition. This revenue is estimated at $10 million, which is almost 2.4x of what we did in quarter 3. So what this means on a high level, this will help us cut EBITDA losses in Tritium to almost half compared to the current levels, not just this quarter, but you can see signs of turnarounds in various other ways at Tritium. We bagged almost a $30 million combination of firm purchase order and forecast for high-speed DC EV chargers from a large U.S. customer from one of the Fortune 50 U.S. customers, with delivery spread over full calendar year '26. And the deliveries for this project has already started from January '26. In addition to this large PO, we also have about $15 million of backlog as of January 31. All these things are building up quickly now with the changing customer sentiment towards Tritium because of the hard work we have put in service, spare parts, maintenance of chargers globally that has restored some of the confidence -- some of the lost confidence of Tritium customers. And now we are back in the playing ground. So on one hand, while revenues are entering the growth phase on the second hand, new products are also entering the market. Tri-Flex was center of the product strategy when we acquired Tritium. It got delayed by 6 months in launch, but due to revision, but I'm happy to say it will be one of the leading ultrafast, high-power distributed charger out there in the market. As of today, we are heavily invested not just in development, but in procurement of material for initial build, where we have invested more than $3 million. And Tri-Flex system will start production in our Tennessee factory in March of '26. Initial deployments will be focused on U.S. and Europe customers, which will help us to create larger momentum across our Tri-Flex pipeline. While there is a big pipeline we are working on, but we are in advanced stage of RFP of another coincidentally $30 million worth annual business from a large and globally reputed CPO. Regarding funding, yes, because Tritium is a group of foreign companies, which have a more expensive cost structure compared to India generally. So funding is important. We secured $10 million in equity capital from a U.K.-based PE, which we are drawing on as we speak as well as there are progressive discussions ongoing with multiple other players for a minority stake. So that's the general update at Tritium. And while it has weighed on our balance sheet for the past 4 quarters, but at the same time, I thank you for your support and with what we have as our pipeline and product portfolio, I'm hopeful for a strong turnaround and EBITDA breakeven in Q4 of FY '27 and really building this into a global EV charging business from India. Page 18 shares some marketing updates. We recently added a tagline to our logo called Beautifully Engineered. So Exicom is an engineering-driven company, R&D-driven company. And every product of ours at least has won in the market because of its design, because of its differentiation. And we want to make sure this message of us taking the hard work and beautifully engineering the product is -- becomes a theme of the company and is passed to all the stakeholders. We also did marketing event for Exicom One, the end-to-end integrated service offering that I spoke about. In addition to that, there were various digital initiatives, partner-led initiatives, PR initiatives and participation in many exhibitions to promote global brand visibility as well as industry leadership. That's it for the update for our EV charger business. I'll be around to answer any question and answers that you may have. With that, I will pass it to Shiraz to update you on the financials. Thank you.

Thank you, Anant, and thank you so much. Good evening, everyone. My name is Shiraz Khanna. I'm the CFO for Exicom Tele-Systems. Starting on the financial highlights for Q3 FY '26 stand-alone, we did a turnover of INR 233 crores, slightly above the previous quarter, which was INR 228 crores, which was September ending. And if we compare quarter 3 of '25 with quarter 3 of '26, we have grown 58%. Quarter 3 '25 was INR 147.7 crores and now it is -- this quarter was INR 233 crores. Primarily, the growth came in, in Critical Power in this quarter, which is 104% more than what it clocked last year, the same quarter in Q3 FY and the sales have been primarily because of the BharatNet project that we have, the Indus Tower batteries, ATC and so on and so forth. Even EV has grown at 4% year-on-year, if you look at that. Our gross margins have increased from last year Q3 '25 of INR 33 crores in absolute terms to INR 51.61 crores. And the margin percentage in that last year quarter 3 '25 was 22.5% remains pretty much the same. However, if we compare it over the previous quarter, it's dipped a little, and that's primarily because of the product mix that we've had. In this quarter, we've had more sales in the battery segment. And there, the margins are a little more stressed than the normal critical power and EV equipment that we make. The EBITDA has been marginally better at INR 16.1 million against INR 15.2 million the previous quarter -- sorry, INR 15.2 crores over INR 16.1 crores in this quarter. And if we compare it from Q3 FY '25, this is definitely far, far better. EBITDA continues to be positive last quarter and this quarter in spite of the fact that there is an exceptional item of the new labor code that has kicked in very recently. Moving on to the financials for YTD for stand-alone, which is 9 months of this financial year starting April to December '25 and then comparing it from April to December '24, our revenue has clocked 14% increase. We are now at INR 612 crores, while the same period 9 months last year was INR 539 crores. So that's a healthy increase. Critical Power has increased. Contributing to this increase has been through Critical Power. You are seeing -- able to see the stake and EV has grown substantially by 32%. In fact, I'm happy to share that almost what we did in 9 months last year -- 9 months in this year is equivalent to last year 9 months full year. So we've clocked almost revenue of INR 190 crores this quarter -- this 9 months. The gross margins continue to be good, and we clocked INR 161 crores against INR 157 crores between 9 months of this year and 9 months of previous year. Though margins are stretched this year primarily because of the product mix, as I mentioned to you. EBITDA in absolute terms in 9 months is INR 40 crores, which is up 46% over the previous year Y-o-Y, just INR 27.4 crores. And the PAT marginally down because of the finance cost that has come in that we have taken loans for acquiring Tritium. All in all, I think this year is looking much more positive than the previous year, 14% increase we've already seen in stand-alone business. And the next quarter, as Anant mentioned, looks very positive. Moving on to consolidated financials for the quarter. Our overall revenue was INR 276.7 crores against INR 281.7 crores, which is more or less flat, but we're consolidating. And if we compare INR 276.7 crores for the quarter of last year, we are far better by 41%. Last year, we clocked for this quarter INR 196.6 crores. So the gross margin also are much better than last year quarter. We are at INR 77 crores against INR 55 crores last year in this quarter. And EBITDA remains pretty much flat over the last quarter. And PAT has, of course, been same again, pretty much flat on this. When we look at the consolidated numbers, including Tritium, including the other subsidiaries of ours, our revenue for the 9 months on a consolidated basis is INR 764 crores. Now this was INR 602 crores for the 9 months of last year, which is a healthy 27% increase. Of course, the revenue growth of 27% increase has been contributed by Critical Power, which has grown 8.5% year-on-year for 9 months and EVSE, which has grown 65% year-on-year. And if you exclude Tritium, which has been added this year more specifically, we have still grown by 38%. In gross margin in absolute terms for the 9 months, we are at INR 247 crores against INR 180 crores in the 9 months of previous year. So this again is a very improved way. And our margins are also higher as compared to the previous year, which stand at 32.4%. EBITDA, of course, because of Tritium, is stressed. But as Anant mentioned, EBITDA and PAT, we are looking at this quarter having much, much higher sales. And definitely, the outlook looks better in the next financial year because of the confirmed orders that we have in hand. I'll now move on to give you a quick update on our plant, which has got started last quarter in Hyderabad, the new plant, for which the IPO had been -- had come out. So happy to share that the overall production is happening well. In fact, the entire batteries are now getting manufactured only in the new plant, while we will ramp up the production of Critical Power equipment and the electric vehicle chargers in our new plant. So by this -- by the coming quarter end, which is March '26, we will have the plant in Hyderabad fully functional with all cylinders and doing all production. Quick update in terms of deployment of IPO funds. CARE is an agency which is certifying this. We have almost exhausted all our planned money that we had raised in IPO, which -- and we got listed on 5th of March '24, raised about INR 400 crores. All of that is almost spent. There was some money that was earmarked for R&D. It shows INR 17.94 crores as of 31st of December. This is further used in this quarter. And while we had to use all of this by this 31st of March, I think a little bit of it will flow into next quarter, which is only giving us a little bit of more space or money to spend on R&D, which is a continuous effort that goes on out there. In terms of the rights issue that came out last year in August, that again has been exhausted almost completely based on the plan and has been certified by CARE, which is exactly as per the plan that we had raised for the reason that we have. With that, I'll now hand over it back for question and answers, and Anant and I will be there along with -- I mean, I'll be there along with Anant to answer any questions.

[Operator Instructions] The first question is from the line of [ Sai Surendra ], a retail investor.

This is Sai Surendra. I have one question. Sir, in consolidation numbers, our material costs are almost all equal. Revenue losses are continuing. How many more quarters will this high cost structure continue? By which quarter can we clearly expect the consolidation breakeven? Shareholders have been waiting for the long term, sir. These are my questions.

Yes. So I really appreciate the sentiment over here, and I agree on our consolidated breakeven is something we are all waiting for even as management of the company. I spoke about the turnaround of Tritium from perspective of stabilization phase over and growth phase having started in Q4 FY '26, which is the current quarter, and we plan to build upon that every quarter. I expect we have publicly stated the management expectation of breakeven quarter as quarter 4 FY '27. However, the stock price buildup from where we are right now to quarter 4 FY '27. And hopefully, we see a continuous improvement in our Tritium performance from Q4 onwards and all the 4 quarters of FY '27 as well. So as I said, we are entering the growth phase for Tritium and to become a really strong global EV charger brand.

The next question is from the line of Samraat Jadhav from Prosperity Wealth Adviser.

So my question is like you mentioned that there is a robust order book of around INR 1,435 crore. What proportion of this is executable in FY '27? And what visibility do you have on margins?

So this order book that you're referring to is only for Critical Power. This does not include our EV charger business. This order book overall is executable over next 24 -- approximately 24 months. Very few, very small portion of this order book may go to 30 months, but most of it is executable over the next 24 months. Our YTD Critical Power revenues are roughly -- just one second, are about INR 425 crores, right? So -- and quarter 4 is usually our strongest quarter. So we will see our year-end results soon. But as I stated in the investor presentation, based on the investments being undertaken by telcos and towercos to add new towers and replace some of the energy infrastructure with the old towers. On current year, we should be expecting roughly 30% jump in revenue. So those are result of new orders win as well as this order book, which will be executed over the next 24 months.

Okay. Great. You also secured $100 million -- sorry, $10 million equity infusion from a U.K. PE firm as per the presentation. So how are these funds deployed? Or do you see any further dilution also on the equity?

No, no. This is -- in fact, we should have mentioned that clearly. This is not at the listed company level. This is only for Tritium at our holding company level of Tritium. So Exicom owns Tritium, Netherlands...

No, this is purely for Tritium itself, nothing related to Exicom?

No, no, no, yes, and thank you for clarification...

Yes, because -- yes. Okay. Last question, like we have this Tri-Flex production, which begins in March '26, right? What is the expected ramp-up time line? And how soon can we contribute meaningful revenues for it?

Yes. So Tritium has -- on a high level, it has 2 product lines, older and newer, right? So older is -- I spoke about 30 million PON forecast from a large customer and there will continue to be -- those are for the current generation products of Tritium, and there will be more pipeline for that. So it's not like the revenues will only come when the new Tri-Flex will come. Tri-Flex is center of the product strategy for the future, but it's very high power charger, right? So only sophisticated customers can deploy it. The sites where that is deployed requires months to plan. So while every site may be worth INR 3 crores, but planning time is long. So we already have some backlog of Tri-Flex order, and we expect momentum to be created after initial units are deployed. I can't give a firm number on what Tri-Flex sales will be. But overall, on Tritium, if you have to achieve EBITDA breakeven by quarter 4 of '27, then the sales have to grow meaningfully. In our press release, we have mentioned we are looking at 3x revenue scale up from -- compared to FY '26. So that's the only revenue I can give you at this time.

Okay. So can you put a ballpark figure for the pending order for Tri-Flex on...

We don't disclose product-wise pending orders, so...

Number, like 10 sites, 15 sites, 100 sites?

I can say we have mentioned that as of January 1, our backlog has been about $15 million, which includes Tri-Flex backlog as well. This has been mentioned in the investor presentation.

[Operator Instructions] The next question is from the line of [ Prathamesh Bhamare from PJ ].

Is there any plan to -- plan by Exicom to go in charge point operating?

No. Those would be our customers. So going into our customers' business will definitely not be a right idea. And anyway, Exicom is a technology and a product company. That's our focus. That's what we know how to do. Running a charge point operator business is an annuity business. It's CapEx heavy, and that's not our DNA. So long story short, we don't have any plans to enter that business.

Ladies and gentlemen, we take that as the last question of the day. And now I would like to hand over the conference to the management for the closing comments.

So I thank all the shareholders, everyone who has participated on this call and continued patience with our company. We are into modern technology, green energy and very high-end power electronic business, which may take time to manifest on a global scale. But I'm sure these efforts will give results, as you have seen on a stand-alone basis, continued steady performance. And as we have outlined we expect a much stronger performance in both Q4 as well as FY '27. And now with Tritium in the growth stage, hopefully, we'll be able to get to consolidated breakeven in later part of FY '27 as well. But our eye is not only on the breakeven in later part of the year, but also continuous improvement quarter-on-quarter starting with this quarter itself. So thank you for your patience, and we are here to serve you and do the best we can. Thank you.

Thank you. On behalf of Monarch Networth Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.