Shilchar Technologies Powers Ahead with Robust Q2 FY26 Performance and Ambitious Expansion

Shilchar Technologies Limited has reported a strong financial performance for the second quarter and first half of fiscal year 2026, demonstrating sustained momentum in a dynamic market. The company, a specialist in power and distribution transformers, delivered impressive growth across key financial metrics, underpinned by operational efficiency and a healthy demand environment. This quarter's results highlight Shilchar's strategic positioning and its commitment to long-term growth, particularly within India's evolving power ecosystem.

For Q2 FY26, Shilchar Technologies recorded a revenue from operations of INR171 crores, marking a robust 31% year-on-year growth. The company's profitability metrics remained healthy, with EBITDA margins standing impressively at 31%. Net profit for the quarter reached INR46 crores, an exceptional 40% year-on-year increase. The first half of FY26 also saw considerable growth, with a 39% top-line growth and a 54% bottom-line growth, reflecting the company's strong execution capabilities.

Driving Growth: Domestic Demand and Strategic Expansion

The domestic power and renewable energy sector continues to be a significant growth driver for Shilchar. According to the Ministry of New and Renewable Energy, India added approximately 21.7 gigawatts of solar capacity in the first half of FY26. This strong sectoral momentum has translated into sustained order inflows and robust visibility across Shilchar's domestic customer segments. The company's focus on special purpose transformers for solar and wind energy sectors has been a key contributor to its growth.

On the export front, while new tariff measures implemented in the United States from August 27, 2025, introduced some uncertainties with a 50% tariff, underlying demand and customer engagements in the US remain strong. Shilchar's diversified international markets, including the Middle East, Africa, and Europe, continue to provide balanced growth opportunities, mitigating risks from any single region.

A major highlight of the quarter was the announcement of the Gavasad Expansion #3 project. This initiative represents the largest capacity augmentation in the company's history, set to add 6,500 MVA and increase total capacity to 14,000 MVA by April 2027. The project, with a capital expenditure of approximately INR90 crores, will be entirely funded through internal accruals, underscoring Shilchar's disciplined capital allocation and strong financial health. This expansion is expected to enable the company to achieve a turnover of INR1,400 crores to INR1,500 crores at full capacity.

Financial Snapshot: Q2 & H1 FY26 Performance

Strategic Vision and Future Outlook

Shilchar Technologies is also venturing into the manufacturing of 220 kV class transformers, a new product segment that will be produced at the expanded Gavasad facility. These transformers, capable of up to 100 MVA, will primarily serve the transmission sector. While approvals and building customer confidence for this new range will take some time, the management is confident in its capabilities, having successfully scaled up through various kV classes in the past. Orders for these new transformers are expected to commence in January 2027, with manufacturing starting in April 2027.

The company's management has provided a positive outlook, guiding for sales of INR750 crores for FY25-26. For FY27, they anticipate a growth of 10-20%, targeting sales between INR800 crores and INR850 crores, with capacity utilization expected to be around 90-95%. The current order book stands at INR300 crores, split between INR175 crores for domestic and INR125 crores for exports, which is expected to be executed before the current financial year-end. Management emphasized their ability to maintain margins due to strong customer relationships and a premium placed on their product quality.

Sustained Growth and Investor Confidence

Shilchar Technologies' Q2 FY26 performance, coupled with its strategic capacity expansion and entry into higher kV class transformers, underscores its commitment to sustained growth. The company's debt-free balance sheet and robust cash reserves provide a strong foundation for future initiatives. Despite potential challenges like US tariffs, the diversified market presence and strong domestic tailwinds position Shilchar favorably. The management's transparent communication and consistent delivery on past commitments further bolster investor confidence, reinforcing the company's long-term growth trajectory in the power sector.