Parth Electricals & Engineering: Powering Up for a Brighter Future with Strong H1 FY26 Performance

Parth Electricals & Engineering Limited, a prominent player in the electrical power transmission and distribution sector, has delivered a robust performance in the first half of fiscal year 2026 (H1 FY26), signaling a strong trajectory for growth and expansion. The company, which recently completed its IPO in August 2025, reported a net revenue of INR 80.40 crore, marking a commendable 15% year-on-year increase. This growth was accompanied by significant improvements in profitability, with gross margins expanding by 555 basis points, EBITDA by 135 basis points, and Profit After Tax (PAT) by an impressive 170 basis points year-on-year. This strong financial showing underscores the company's commitment to operational efficiency and strategic execution.

The company's revenue streams are primarily diversified across manufacturing, services, and EPC (Engineering, Procurement, and Construction) segments. For H1 FY26, manufacturing contributed the lion's share, accounting for INR 70 crore (87.5%) of the segment revenue. Services and EPC each contributed INR 5 crore, representing 6.25% of the segment revenue respectively. This balanced approach allows Parth Electricals to leverage its in-house R&D and design capabilities across various aspects of the electrical infrastructure value chain.

Financial Highlights: A Snapshot of Growth

The H1 FY26 results reflect a period of strategic investment and enhanced operational performance. The company's focus on margin expansion is evident, with PAT margin reaching 7.59% in H1 FY26, up from 5.89% in H1 FY25. This improvement comes even after a one-time provisioning for past period gratuity and leave encashment, demonstrating underlying strength.

(A) - Audited, (U/A) - Unaudited. All figures in INR Crore.)

Strategic Initiatives and Market Opportunities

Parth Electricals is not just resting on its current performance; it is actively laying the groundwork for future growth through several key strategic initiatives. A major focus is on expanding its manufacturing footprint and product portfolio. The company is setting up a new Gas Insulated Switchgear (GIS) manufacturing facility (Unit-2) in Karachiya, Vadodara, which is expected to commence commercial production by September 2026. This facility will enable the manufacturing of GIS for various voltage levels (33KV, 66KV, 132KV, and 220KV), a product in high demand due to its reliability, safety, and space-saving advantages.

Another significant expansion is into the Eastern region of India with a new manufacturing unit in Khordha, Odisha. To capitalize on immediate opportunities, the company has proactively established a temporary rented facility, which is expected to begin operations soon, while civil work for a permanent facility progresses. This move demonstrates management's agility in responding to market demands.

Recognizing the scarcity of skilled manpower, Parth Electricals is also launching a Skill Development Center in Q3 FY26. This center aims to train and absorb 300 additional skilled employees by FY28, ensuring a robust talent pipeline for its expanding operations. This initiative aligns with the broader industry need for specialized technical expertise.

Diversifying Revenue Streams and Global Reach

The company is also making significant strides in diversifying its revenue streams and expanding its global presence. It has pioneered Ring Main Unit (RMU) refurbishment in India, a service that has reduced CapEx by 70% for clients like CESC and UGVCL. This value-added service is poised for replication on a larger scale, both domestically and internationally.

In a strategic move to boost exports, Parth Electricals secured its largest-ever export order of $4.8 million for LT panels to Mesabi Metallics Company LLC in the USA. To further penetrate international markets, particularly the USA and Canada, the company is actively pursuing UL certification, expected by Q3 FY26. This global outlook is a key component of its growth strategy, with a target to achieve at least 20% of its revenue from exports.

The company's strong order book of INR 137.36 crore as of September 30, 2025, provides excellent revenue visibility, with the majority expected to be executed within the current financial year. This robust pipeline, coupled with strategic partnerships like the technology transfer agreements with Schneider Electric and Hezong, positions Parth Electricals for sustained growth.

Outlook: Poised for Accelerated Growth

Parth Electricals' management is optimistic about its future prospects, projecting a 20%-30% CAGR over the next five years. With the addition of new manufacturing facilities, the company anticipates tripling its revenue in the next three to five years. The aim is to achieve a 10% PAT margin in the next two to three years, driven by higher-margin products like GIS and continuous improvements in productivity.

The company's strong balance sheet, characterized by a net cash position of INR 71 crore, a current ratio of 2.47, and a low debt-to-equity ratio of 0.13, provides a solid financial foundation for these ambitious plans. The disciplined utilization of IPO funds for capex and debt reduction further reinforces its financial prudence. Parth Electricals & Engineering Limited is clearly on a path of strategic expansion and operational excellence, ready to capitalize on the burgeoning opportunities in the power sector.