Rishabh Instruments Shines in Q2 & H1 FY26: A Deep Dive into Growth and Strategy

Rishabh Instruments Limited, a prominent player in global energy efficiency solutions, has reported a robust financial performance for the second quarter and first half of fiscal year 2026. The company's consolidated revenue grew by 7.7% in Q2 FY26 and an impressive 9.9% in H1 FY26 on a year-on-year basis. This growth was primarily fueled by healthy order inflows, strategic new product launches, and an improved geographical mix. Profitability saw a significant boost, with consolidated EBITDA margins expanding by 1,130 basis points and EBITDA growing 220.6% year-on-year during the quarter. This remarkable performance underscores the company's disciplined approach to raw material procurement, enhanced operational efficiencies, and the benefits of operating leverage.

The standalone Rishabh India business also demonstrated strong momentum, with revenues increasing by 12.1% in Q2 and 14.6% in H1 year-on-year, driven by robust export demand and new customer acquisitions. The standalone EBITDA margin reached 26.1% in Q2 FY26, a substantial 950 basis points improvement from the previous year, and PAT increased by 85.4% in Q2 FY26 and 113.9% in H1 FY26. This consistent margin expansion over the past six quarters highlights the effectiveness of their cost optimization initiatives and favorable product mix. Lumel SA, the company's second-largest electronics pillar, also performed well, showing a strong quarter-on-quarter sequential growth of 33.6% and maintaining healthy EBITDA margins of 24.4% in Q2 FY26.

Navigating Challenges and Strategic Shifts

While the overall picture is positive, Rishabh Instruments is actively navigating certain market headwinds. The European market remains subdued, with soft demand in industrial automation and power infrastructure, and government priorities shifting towards defense spending. To counter this, Lumel SA is intensifying its focus on faster-growing markets in the Middle East, Southeast Asia, and America. The High Pressure Die Casting (HPDC) business at Lumel Alucast is undergoing a planned transition, with revenues in Polish Zloty declining due to a strategic decision to phase out large, loss-making legacy contracts. However, in INR terms, the segment saw a modest 1% revenue growth in Q2 FY26 and 5.6% in H1 FY26, aided by favorable currency movements. Adjusted EBITDA for Lumel Alucast turned positive in H1 FY26, reaching INR 7.8 crore compared to a loss of INR 12.8 crore in the previous year, reflecting the structural benefits of eliminating non-viable business and tighter cost controls.

Financial Highlights (Consolidated - INR Crore)

Note: All values are in INR Crore. Reported EBITDA includes ESOP Costs.

Strategic Initiatives and Future Outlook

Rishabh Instruments is committed to a robust growth trajectory, underpinned by several strategic initiatives. The company's CAPEX in India is progressing well, with the construction of two new multi-storied buildings in Nashik expected to double production capacity by mid-next year. This expansion will support rising export demands and strengthen the growth trajectory of Indian operations. The solar business, despite initial delays due to intense Chinese competition, is showing promising traction with new single-phase and 'NEO RADIUS' inverters. The company aims for this segment to become an INR 100 crore business in the next 3-4 years.

In terms of R&D, Rishabh Instruments has a comprehensive 5-year product development plan, including the launch of MID meters for Europe, new medium voltage products, and five new products from its China operations. A partnership with ASPIRE-IITB Research Park Foundation further strengthens its commitment to cutting-edge research. The recent acquisition of Microsys, a SCADA software company in the Czech Republic, is set to enhance its industrial process automation capabilities.

Segment Performance (Q2 FY26 - INR Crore)

Note: Adj EBITDA for HPDC is 1 Mn, which is 0.1 Crore.

Management's Vision for Sustainable Growth

Management remains confident in achieving a full-year EBITDA target of INR 100 crore. They anticipate 12-15% topline growth in the electronics business by year-end and expect Lumel Alucast's EBITDA to remain positive this year, becoming more sustainable by FY27. The company's strategy involves continuous product localization, geographical expansion into high-growth markets like the Middle East, US, and Southeast Asia, and a relentless focus on operational excellence. Rishabh Instruments' diversified business model, strong balance sheet, and healthy cash flow from operations provide a solid foundation for sustained profitability and long-term value creation for its stakeholders. The company's proactive approach to market changes and commitment to innovation position it as a resilient and forward-looking entity in the energy efficiency sector.