Power & Instrumental (Gujarat) Limited (PIGL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Power & Instrumental (Gujarat) Limited Q1 FY '26 Earnings Conference Call hosted by Arihant Capital Markets Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashvath Rajan from Arihant Capital Markets. Thank you, and over to you, sir.

Good afternoon, participants. I, on behalf of Arihant Capital, is delighted to host Power & Instrumentation (Gujarat) Limited for the Q1 FY '26 Conference Call. Today from the management end, we have Mr. Padmaraj Pillai, Managing Director; Mr. Rohit Maheshwari, Chief Financial Officer. And without any further ado, I would like to hand over the call to Mr. Padmaraj Pillai for opening remarks. Over to you, sir.

Thank you, Mr. Ashvath [indiscernible]. Greetings to everyone. Thank you for joining us on this earnings call to discuss the performance of Power & Instrumentation (Gujarat) Limited for the first quarter of FY '26. It gives me great pleasure to present our performance for the first quarter of FY '26. We have begun this year on a very strong note, recording a 40.18% year-on-year growth in the net profit. This performance reflects the continuous resilience of our business model, the strength of our execution capabilities and the trust we built in our clients across diverse sectors. This quarter also is special as it coincides with the celebration of 50 years of Power & Instrumentation (Gujarat) Limited. Since our inception in 1975, we have evolved into a trusted name in the EPC industry with a proven track record in delivering turnkey projects for substation power distribution systems, industrial electrification and specialized infrastructure projects. 5 decades of consistent performance and technical excellence have laid a very strong foundation for the next phase of our growth journey. During the first quarter, we secured several significant contracts that highlight our technical capabilities and our successful strategy of diversifying into high-impact sectors. We secured 80.24 lakh contract from Godrej & Boyce Manufacturing Company for a specialized work at Khavda project. Most notably, we secured 6 contracts worth about INR 57.89 crores from Nyati Engineers and Consultants Private Limited for Udaipur Airport project. This prestigious assignment, which involves the supply installation and testing of critical electrical system for airports is a major step in diversifying our portfolio in aviation-linked infrastructure segment, which is rapidly in growing demand. Building on this momentum, we are also delighted to announce a significant new order worth INR 70.55 crores from Ajmer Vidyut Vitran Nigam Limited under the revamped distribution sector scheme, RDSS in Rajasthan. This project involves critical upgrades to power distribution infrastructure and positions to play an important role in the national electrification efforts under the key central government schemes. Together, these recent wins for the Udaipur Airport and RDSS project demonstrate our ability to secure and execute large-scale time-bound projects in both aviation-linked and government-backed infrastructure. These are 2 of the fastest-growing and highest impact sectors in the India's ongoing infrastructure build-out. We are operating at a time when India's energy and infrastructure landscape is undergoing rapid and historic transformation. India currently stands at the third largest producer and consumer of electricity globally with an installed capacity of over 466 gigawatts. While this is a significant achievement, demand continues to outpace supply due to rising urbanization, industrialization and increased per capita electricity consumption. Looking ahead, the sector presents a multi-decade investment opportunity. Over INR 40 lakh crores is to be invested in the power sector over the next 10 years, supported by expanding aviation infrastructure with airports set to invest over INR 60,000 crores by FY '27, including multiple new terminal projects, revamped central distribution scheme programs such as RDSS, which are transforming the power distribution networks to enhance efficiency and reliability, integrated power distribution scheme with an outlay of around INR 30,000 crores focused on strengthening urban distribution infrastructure, underground cabling and IT enabling. Deen Dayal Upadhyaya Gram Jyoti Yojana with INR 43,033 crore allocation targeting feeder separation, rural electrification and metering to ensure 24/7 power in the villages. The need for robust extra high-voltage transmission network to support the integration of renewable energy and meet the rising demand across the country. The shift from the conventional to renewable and hybrid power system, including large-scale projects such as Gujarat Hybrid Renewable Energy Park. We believe PIGL is uniquely positioned to contribute meaningfully to this transformation given our strong execution record in electrification, transmission and specialized EPC projects. Consolidated financial performance highlights. Quarter 1 financial FY '26. Our consolidated total income stood at INR 41.55 crores, registering a robust year-on growth of 59.83%. EBITDA grew by 17.36% to INR 4.28 crores, while the net profit surged by INR 40.18 crores to INR 2.62 crores. The strategic priorities for FY '26, deepen the presence in central listing program like RDSS, which provide multiyear visibility and scale strengthen our presence in the aviation electrification by leveraging timely execution at Udaipur Airport and actively pursuing upcoming airport opportunities, advance capabilities in extra high-voltage transmission projects following our debut in the 400 kV segment, invest in the digital project, management tools, R&D, strategic partnership with OEMs to deliver integrated EPC solutions, expand selectively into high-potential geographies such as Eastern and Northeastern India. As we celebrate 50 years of operations, we are using this milestone as a springboard to scale further and create lasting value for all the stakeholders. Power & Instrumentation (Gujarat) Limited is ready to play a central role in India's evolving power sector and infrastructure build-out, contributing real value where it matters the most. On behalf of my entire management team, I want to thank all my employees, clients, partners, shareholders for your continued support and trust. I especially wish to thank, as on date, Arihant for arranging this call. With now, I leave the floor open for any questions. Thank you.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Paras Chheda from Purpleone Vertex Ventures LLP.

Congratulations for a strong set of results for Q1. Now for this year, I mean, probably in terms of guidance, we are looking at, if I'm not wrong, about 50% growth compared to last year. My question was with regards to EBITDA margins. For the Q1, the margins have been a little bit stronger compared to the last year corresponding quarter. But on an average, for the full year, should we expect about 10% double-digit margin that is there, at least for the last couple of years? That's question one on the margins. And in terms of, sir, our acquisition of a majority stake in Peaton, what kind of value can that generate in terms of manufacturing products, electrical products that we are targeting? So that's one. And any further progress on the solar EPC contracts or EHV contracts for now?

Okay. I'll start one by one. The first question, I think that you asked me was regarding the EBITDA and the PAT, if I'm not wrong. So I'll put it this way that, yes, definitely, the quarter 1 had a certain impact. Actually, see, the ratio of our work, it is against supply and installation, there are 2 portions to it, basically. So when we do the supply, there's a certain portion of the profit that gets, I mean, released. And then there's a certain portion of it, which is against the installation part. Normally, the installation part has a higher margin as compared to the supply portion, which is a very normal trend in the industry. So based on that, because that is when you look at the consol figures at the end of the year, you will see that the first quarter or the second quarter may have because these are the quarters when there are a lot of supplies that will keep on happening. And then the installation starts, like, for example, this quarter that we're talking about probably because of the rains, I mean a lot of installation would have gone slow. I mean, across the country, I mean, the rains are going on for the last 2 months. So the outdoor jobs would actually slow down a little. And these kind of things do happen. But then you would look at the consol numbers at the end of the year, you will see that we will be improving it as far as the last year was concerned, and we'll remain consistent and the performance you will see at the end of the year. Coming to question number two.

And just on the revenue growth, 50% is what we're targeting. Is that correct? I mean, broadly.

Yes, absolutely, absolutely. That's what...

And that is achievable now or...

No, no, no. Absolutely. Absolutely. We are absolutely in line for it. We absolutely planned everything. Where is it going to come from, which project is going to give us what, everything is there. I mean the plan is absolutely in line, and we had already anticipated this 2 months of slowdown because of rains and everything because this happens every year, year-on-year. There's nothing to worry about. Yes. So this has been a trend in the industry, and we're very, very sure and very comfortably placed to execute the numbers what we are anticipating, and we see that at the end of the year. So that is not going to be any kind of a hurdle that I see as far as things are moving, I mean. Coming back to the next question, I think it was regarding the acquisition of Peaton. So coming to the acquisition of Peaton, see, Peaton basically is a manufacturing company, which is into manufacturing of all kind of low-voltage, high-voltage panels, compact substations and also into the last developmental phase of the compact busway systems. So basically, the acquisition got a little delayed, but the paperwork is going on, I think, should be done very soon, should be completed very soon. And what we envisage with acquiring Peaton is that we will be able to provide certain clients like our aviation industry with a full solution because like last year, we took the license from Siemens for manufacturing the co-branded panels. We've tied up with Rittal Germany, and I said my bus ducts are right in place. So I think all this together, we can offer as a complete solution. Like if you see like in the -- particularly if I'm talking about the aviation industry, I mean, the new recent list of approved makes, which have come out, they've approved us in all categories of panels. They've approved us in the hybrid APFCs, they've approved us in the bus ducts. So already that approval and everything that has been already worked out. So it's just a matter of time once this is over, you will see a lot of contribution coming in from Peaton. I mean, and see, the manufacturing sector is also growing. And more so ever in the electrical field right now, I mean, if you look across the sector, I mean, all of the manufacturers are placing -- I mean, like they're facing the problem of expansion. So we've already planned those things. I mean we have our infra in place. So we think it's a beautiful thing of acquiring, and we think that we'll be able to deliver much better. So just give us some more time, you will see what is going to happen.

So on the commencement of operation -- sorry, because I'm new to this company in general, we have fully acquired Peaton is it? And how much have we acquired Peaton for now?

60%.

Okay. So 60% for now. So we consolidate our results. And in yes, in general, orders for Peaton will -- so I mean, obviously, it will be already operational, but the order flow will increase? Or how are we looking at it? I mean...

Yes, the order flow will increase because if you will look at the order flow right now also, I mean, post the license from Siemens, I mean, we've got a couple of orders. We are banging on now a couple of orders from the other airports also. I mean -- so Peaton basically has been approved in almost all the government organizations. And so we're looking at it like the way the infra is growing and the space is growing, and we are adding 2 products. We are also in discussion with a couple of companies for tie-ups and everything. So all those things are lined up. So we are keeping -- while the paperwork is going on, we are already working on the things where we'll be -- by the time the paperwork will be over, we'll be in a position to straight away take advantage of the situation.

Right. And when do you anticipate the paperwork to get done for Peaton?

Excuse -- I think maybe in a month's time or so.

About a month, right. And sir, just on the EHV space, I mean, it's...

Yes. Again, on the EHV space, I mean, we have bidded for a couple of tenders. In fact, I was just -- in fact, I was -- I just finished off one of my meetings, and I'm just out of that meeting. So I mean, we are very keen to enter this space. So one of the small projects that we took, we successfully executed the same. And now we're looking at a larger size of the system. So we are already quoting for a couple of private entities. We are also in discussion with Power Grid. And there are a couple of tenders which have already been quoted. So let us be hopeful that this quarter see some kind of traction, I mean, like a positioning in that sector, too.

Right. And just for now, as of now, I mean, our order book -- unexecuted order book would be about -- unexecuted would be about INR 300 crores, INR 400 crores or...

Yes, it's about INR 400 crores.

Okay. And the bid value has gone up to INR 500 crores or INR 400 crores?

Yes, it is about approximately bid value. I think it's about INR 390 crores to INR 415 crores or something, something in that range. About INR 400 crores.

Right, right. Understood. And I mean, general, just last query from my side. Going forward, I mean, there is -- and there are various verticals that we operate in. Where do you see the maximum growth coming from? I mean, EHV, I'm personally quite bullish on, but I mean, in general, your thoughts on where the maximum growth for our company could come from?

No, tell you I'll tell you, this is a very simplified answer to this question is that basically, see, EPC business thrives on credentials of the company, basically. Now see, right now, as you see, the entire infra is bullish right now. I mean, every place, there is work that is happening. But what happens is that after a certain time, certain sectors still -- I mean, remain growing, certain sectors have a slowdown. So we have always strategically invested in a point where we have always said that all the segments are equally important. We've been growing every year into a different sector, but we've not left any of the sectors. Like, for example, if you would look at the portfolio that I've got, I mean, against that, if you look at the portfolio of a lot of my peers or my competitors, you will realize one thing that probably they are doing EHV, they're doing only EHV. If they are doing -- I mean, like the RDSS, they are doing only RDSS. If they are in the building segment, they're only doing building segment. We're not stopping ourselves. What we are doing is that internally, we are creating verticals. We are creating people. We are putting people responsible for each of the verticals and trying to add on new verticals every year because we don't want that when sudden space slow down, we don't want our pace to be slowed down. So that is the only reason why I'm looking at all the sectors as equally important. So if I'm entering...

You're diversifying basically and continue to stay diversified.

Yes. But it remains in the same space of electricity. We're not moving anywhere away from it, like I'm not getting into a building construction. Yes. The domain remains the same. But the vertical is like, okay, I was doing the building from there, I moved into the 33 kV segment, then I moved into the 66 kV segment. Now we've done a 400 kV job. Now we're looking at 130 to 220 kV switchyard. So that is an additional thing. Then we -- what we try to do is that once we have that 4 verticals in order, then we look at it, which is the most beneficial. So then we balance our thing because every 5 years, the credentials are going to die. So every 5 years, you need to have your credentials in order. Otherwise, one of the segment you'll be left out. Like I know a lot of my competitors who entered another segment and now they are not available in the first segment. So tomorrow morning, if that time goes a little down, you will not be there in the first segment at all.

Right, right, right. So the idea is to stay diversified within the current domain.

Same domain, same domain and explore the full possibility of encashing whatever is happening in the market right now.

Right. Yes. And generally, now we are targeting INR 300 crores to INR 350 crores kind of size of tenders, it seems. But for now, what is the largest tender size that we bid for?

INR 163 crores.

[Operator Instructions] Our next question comes from the line of Mayank Saraf, an individual investor.

First of all, congratulations for a great set of numbers and delivering above your guidance. I have a couple of questions. First is like what is the visibility of the order book like going ahead for the next year? And if I talk about like March '26, so what is the visibility...

So what I presume is what we're trying to do is that we should have double the amount of whatever closing we're doing. So what we're looking at is that, let's say, if you are closing at INR 100 crores, the order in hand should be about INR 200 crores. So we are in a comfortable position in order to keep on bidding. So the pressure of the work not being there with us should not come to any stage. So I think by March '26, whatever figures we are going to achieve, I think we'll have double the amount of the order with us in hand by that time. So that's what we are planning.

Yes. And when will be eligible for the INR 300 crores like bidding this thing?

See, I'm almost there. I'm almost there. Maybe like even if something like -- because we have done a couple of tie-ups in the last couple of months, wherein we can use the credentials of somebody in JV and we can quote for those kind of tenders. So that eligibility thing, which I was wanting to achieve in terms of my own would come in another 6 months' time. But then if there is any opportunity available, I'm quite ready to bid for it because I've already got my tie-ups in order.

That's great. And like the tenders right now that we have bid in, what is the time line like when will these orders get finalized?

So see, what has happened is basically there is -- I mean, like due to -- I mean, elections, due to all these things, there is a tendency of -- tends to be late opening of the tenders. Then again, March, April, you see a lot of transfers happening and all that. So this is the quarter, I think probably we're looking at the opening of the tenders. So probably by this quarter, I mean, a couple of them should be opening up and the balance should be in the next quarter. Because the first 3 months, 4 months is normally in government, what happens is post March, there are a lot of transfers, there are a lot of promotions and a lot of moving here and there. And then this time that Gram Panchayat elections were there in a couple of states and everything. So once that happens, the Aachar Sanhita, what we call, and have to -- I mean, like they cannot open any tenders or anything like that. So I think probably all these things should start in this quarter.

Wishing you all the best and looking forward to seeing you in one of the bigger tenders soon.

[Operator Instructions] We have a follow-up question from the line of Paras Chheda with Purpleone Vertex Ventures LLP.

Sir, currently, what are our receivable days? I mean, so last year, they went up to it seems 4 months. What would we normally assume on an average for, let's say, this year or the way it is panning out?

I think it's about -- if I'm not wrong, it's about 80 days or something odd, which we are really thriving hard to reduce it to, I mean, maybe about.

This is on an average you're saying, is it?

Yes, on average.

Receivable days. Yes. Because that will be a substantial decline from the last couple of years that we've seen. So far, we've not seen 80 days, I mean.

Yes. But then we -- I think right now -- just a second, Rohit, what is the receivable right now, average?

Sir, as on 30th June 2025, the receivable days is coming to -- days are coming to 87 days. And for the last quarter, previous quarter, that is ending on March 2025, the receivable days was approximately of 90 days only.

Okay. Okay. So at the moment, we are sort of slightly lower than the last quarter that we saw.

Yes...

2, 3, 5 days. If you see the numbers, sir, sir, actually, what happens, you see the closing balance of receivables with the sales figure. But if you see on a quarter-to-quarter basis, it will be coming to 90 days or below 90 days only because if you see the last quarter sales and if you see the [indiscernible] figure, so it is almost lesser than that amount.

Right. Understood. And also, sir, I wanted to understand because -- so the good thing is you've got quite a solid order book and there will be further wins also. So the way you progress, I think at some point, we will need working capital, right? So are we looking to explore raising fresh pref money or this would be mostly debt driven then?

No. Right now -- see, right now, we're not focusing on that part of it because I think the accruals that we have or the last fundraising that we did and plus, I mean, the way we are trying to improve our numbers, I mean, like in terms of like reducing the receivable time, I think I would be positioned right now to do what I'm expecting this year. Let's see what's for the next year. And if we have something that builds up on it or something that we come up with or an [indiscernible] a new one, let's see if we need something. But otherwise, I think the internal accruals would be enough.

So this year at least is done maybe and some part of next year also we manage from internal accruals...

Yes. Yes, I think so. I think so.

Okay. And sir, I mean, just currently, what is the debt on our balance sheet? I mean, broadly, there is limited debt, but just for the sake of it numbers, I mean...

I think...

So as far as debts are concerned, sir, we have only debt of around INR 15 crores as on date on our books. Rest has been in form of nonfund facilities like bank guarantees and letter of credit.