ASM Technologies: Engineering a Future of Growth with Design-Led Manufacturing

ASM Technologies Limited, a pioneer in engineering innovation for over three decades, has reported a stellar performance for the second quarter and half-year ended September 30, 2025. The company's strategic pivot towards Design-Led Manufacturing (DLM) and Engineering R&D (ER&D) is clearly yielding significant results, positioning it as a key player in India's burgeoning electronics system design and manufacturing (ESDM) sector.

The company's Q2 FY26 consolidated revenue from operations surged by an impressive 171% year-on-year to ₹155 crore. This robust growth was mirrored in its profitability metrics, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) skyrocketing by 356% to ₹31 crore, achieving a healthy margin of 19.7%. Profit After Tax (PAT) witnessed an even more dramatic increase of 685% year-on-year, reaching ₹19 crore. For the first half of FY26, total revenue stood at ₹277 crore, a 153% increase from the previous year, with EBITDA at ₹56 crore (20.3% margin) and PAT at ₹35 crore.

Financial Highlights (Consolidated - Q2 FY26)

This exceptional performance was primarily driven by strong execution across both its Hi-Tech and Engineering segments. The Hi-Tech segment specializes in providing systems, subsystems, and precision parts for complex equipment in semiconductor, consumer electronics, industrial electronics, and solar industries. The Engineering segment focuses on industrial and large off-highway vehicles. Management highlighted that DLM contributed a significant 63% to total revenues, while ER&D accounted for 37%, underscoring the success of their strategic re-focus.

Strategic Investments and Capacity Expansion

ASM Technologies is not resting on its laurels; it is actively investing in infrastructure, talent, and capabilities to sustain this growth trajectory. The company has signed two significant Memorandums of Understanding (MoUs) with state governments, signaling its commitment to expanding its manufacturing footprint in India:

1. MoU with Government of Karnataka: A planned investment of ₹510 crore to expand its ESDM-related design-led manufacturing and precision engineering capacity. This initiative involves acquiring 10 acres of land from the Karnataka Industrial Areas Development Board (KIADB) to set up a new facility. The company anticipates this expansion will enhance precision engineering for critical industries and create high-value employment opportunities.

2. MoU with Government of Tamil Nadu: An investment of ₹250 crore to further enhance DLM capabilities for the ESDM sector. This involves acquiring 5 acres of land to establish a state-of-the-art design facility. This move aligns perfectly with the Government of India's "Make in India" program and aims to bolster expertise in high-growth segments like Electronics, Solar, and Semiconductors.

These cumulative planned investments of approximately ₹760 crore are expected to be deployed over the next 18-24 months, post land acquisition. The company is also adding another manufacturing facility in Karnataka, which is projected to be operational by the end of December 2025 or early January 2026, further boosting its capacity. This proactive expansion is crucial, especially given the current high capacity utilization of 80-85%.

Innovation and Market Positioning

Beyond physical expansion, ASM Technologies is deeply committed to technological innovation. It leverages industrial Artificial Intelligence (AI) across both its Hi-Tech and Engineering verticals to enhance operational outcomes and drive efficiency. This digital layer includes proprietary AI frameworks for yield throughput, performance monitoring, and predictive maintenance, showcasing a forward-looking approach to manufacturing.

Furthermore, the company has established a joint venture called ASM-HHV to focus on the solar equipment segment, with deliveries expected to commence later this year or early next year. This move positions ASM Technologies to capitalize on India's rapidly growing solar market, which is emerging as a significant global destination.

Management emphasized its deep engineering expertise, co-development approach, and integrated manufacturing capabilities as core differentiators. The company's ability to customize solutions and its understanding of client requirements enable it to support customers in design-led innovation and next-generation product development. While acknowledging that 60% of its revenue comes from its top 10 customers, the company is actively pursuing diversification by expanding into new geographies, product lines, and acquiring new clients.

Outlook and Investor Confidence

The management expressed confidence in maintaining its growth momentum into the second half of the fiscal year, citing robust activity in both Hi-Tech and Engineering verticals. The global supply chain realignment, with India emerging as a preferred design and manufacturing hub, presents a significant opportunity for ASM Technologies. The company's long-term visibility of 18-24 months for projects further reinforces a stable outlook.

Despite the competitive landscape, including multinational companies setting up R&D centers in India, ASM Technologies believes its unique blend of ER&D and DLM capabilities, coupled with strategic investments, will ensure sustained value creation for its customers and shareholders. The company's disciplined capital allocation and focus on operational excellence are expected to drive profitable and sustainable growth in the coming years.

ASM Technologies Limited is strategically positioned to capitalize on the industrial tailwinds in the ESDM sector, driven by its strong financial performance, proactive capacity expansion, and continuous innovation in design-led manufacturing and AI.