Megatherm Induction Lights Up H1 FY26 with Strategic Growth and Global Ambitions

Megatherm Induction Limited, a key player in the capital goods sector, has reported a steady performance for the first half of fiscal year 2026 (H1 FY26), demonstrating resilience and strategic foresight amidst a dynamic market. The company's revenue from operations reached ₹159.05 crore, marking a 7.5% year-on-year growth. This growth was complemented by an EBITDA of ₹15.57 crore and a Profit After Tax (PAT) of ₹12.04 crore, reflecting a healthy bottom line despite increased operational expenditures. The management highlighted that the capital goods industry typically experiences a stronger second half, suggesting further momentum in the coming months.

Segment-wise, the company's performance was driven by a diversified portfolio. Transformers contributed approximately 10% of the total turnover, while after-sales services and spares accounted for about 20%. The forging and foundry segment, a newer focus area, contributed around 7%. The remaining 63% came from other induction products and allied equipment. While the steel segment faced some sluggishness due to the monsoon and high inventory levels, other engineering segments like foundry, heating, hardening, and castings picked up, offsetting some of these challenges. The company's ability to maintain its bottom line despite a nearly 30% increase in HR costs and higher marketing spends underscores its operational efficiency and strategic investments in talent and market reach.

Strategic Thrust: Transformers and Global Reach

Megatherm's strategic initiatives are clearly aimed at unlocking high-growth potential, particularly in the renewable energy sector and international markets. A pivotal milestone was the successful testing of a 13.2 MVA Inverter Duty Transformer (IDT) in August 2025, validated by CPRI Bhopal. This innovation is expected to significantly boost the company's transformer revenue, projecting a rise from ₹50 crore in FY25 to ₹110 crore by FY27. The new transformer manufacturing facility in Kharagpur, the largest in Eastern India, boasts a 2,000 MVA capacity, scalable to 3,000 MVA with minimal investment, and is set to be commissioned by Q1 FY26. This facility positions Megatherm as a niche leader, differentiating it through advanced testing infrastructure and export readiness.

The company's global expansion is equally ambitious. Megatherm has formed a Joint Venture with Cyprium Induction to penetrate the North American market, with marketing efforts already underway. Similar tie-ups are being pursued in Brazil, Mexico, and Argentina for South America, and an office representation is being established in the UK to address the European market. These efforts are supported by planned heavy investments in international trade fairs in FY27 and FY28. Management emphasized that India is becoming a global manufacturing hub for highly engineered induction products, and Megatherm is leveraging this trend to become a global alternative to established players.

Operational Excellence and Future Outlook

Megatherm's commitment to operational excellence is evident in its continuous R&D and backward integration efforts. The in-house engineering team is developing advanced technologies like Nano cable systems, synchronized rectifier control boards, and low-power efficiency systems. Upcoming innovations include Dual Mode Inverters, Hybrid Panels, AI Panels, and Zero Voltage Drop Designs. Backward integration, such as drawing its own copper and slitting CRGO, ensures faster emergency support and spare parts delivery, further enhancing customer satisfaction and protecting profit margins.

The company's revenue guidance reflects its confidence in these strategies. Megatherm targets a top line of ₹600 crore within 24-30 months and ₹950 crore within 48-54 months. The EBITDA margin for IDT is projected at an impressive ~15%, indicating industry-leading efficiency. The management believes that once the annual turnover reaches ₹400 crore, a bottom line of 9-10% will be achievable with minimal incremental overhead costs, thanks to the scalable infrastructure and strategic investments already made. The current order book of approximately ₹430 crore, with a significant carryover of ₹260 crore to FY27, provides strong revenue visibility for the upcoming periods.

Megatherm Induction Limited is clearly charting a course for sustained growth, driven by strategic investments in high-potential sectors like renewable energy transformers, aggressive global expansion, and a relentless focus on technological innovation and operational efficiency. The company's disciplined capital allocation and proactive market engagement underscore its commitment to long-term value creation for its stakeholders.