Salzer Electronics Navigates Growth with Strategic Innovations in Q2 & H1 FY26

Salzer Electronics Limited, a prominent player in India's electrical solutions sector, has delivered a resilient performance in the second quarter and first half of fiscal year 2026. The company reported a consolidated revenue of ₹418.9 crore in Q2 FY26, marking a robust 21.7% year-on-year growth. For the first half (H1 FY26), consolidated revenue reached ₹860.03 crore, a significant 22.66% increase over the corresponding period last year. This growth was primarily fueled by strong traction across its core businesses and an accelerated ramp-up in the smart meter segment, underscoring Salzer's expanding footprint in the energy management space.

Despite the impressive top-line growth, the quarter witnessed a moderation in consolidated EBITDA margin to 8.7%. This was largely attributed to higher input costs and initial scaling expenses associated with the nascent smart meter segment. However, management expressed confidence in an impending improvement in profitability as sales volumes continue to grow and operational efficiencies strengthen in the upcoming quarters. The steady performance of the established switchgear and wire & cable divisions continues to provide a strong backbone for the company's overall business.

Strategic Thrusts and New Growth Avenues

Salzer Electronics is actively pursuing several strategic initiatives to capitalize on India's electrification and efficiency upcycle. The company's smart meter business is gaining significant traction, with ₹22 crore in sales during Q2 FY26, contributing to a total of ₹24 crore in H1 FY26. This segment is poised for long-term growth, with management anticipating an 8-10 year cycle and a potential demand for an additional 15 crore meters nationwide. The company has a pending order of ₹22 crore and an LOI for ₹30 crore, reflecting strong market confidence despite initial deployment challenges faced by Advanced Metering Infrastructure Service Providers (AMISPs).

Another key growth vertical is the EV charger business. After strategically re-evaluating its approach, Salzer has partnered with Ultrafast Chargers Limited and has already sold approximately 50 chargers in the Indian market. Discussions are underway with several leading Indian multinationals for long-term collaborations, positioning Salzer to benefit from the rapidly expanding EV infrastructure. Furthermore, the company has developed a new temperature sensor for the automotive industry, currently undergoing validation with two automotive OEMs, with commercial supplies expected to commence from Q4 FY26. This innovation is set to open new revenue streams in automotive, HVAC, home appliances, and medical equipment sectors.

Operational Excellence and Market Positioning

Salzer's commitment to operational efficiency, working capital optimization, and product portfolio expansion remains steadfast. The company recently secured a patent for its 'Disconnecting and Earthing Device for High Voltage Applications,' an innovation that enhances safety and efficiency for traction and locomotive systems while offering a cost advantage through reduced size and material usage. This patent underscores Salzer's focus on practical innovation and engineering excellence.

The company's revenue mix for Q2 FY26 saw Industrial Switchgear contributing 63.1%, Wires & Cable 31.8%, and the Building Segment 5.1%. Geographically, India accounted for 76.2% of revenues, with Asia (excluding India) at 9.5%, North & South America at 7.3%, Europe at 5.5%, and the Middle East at 1.5%. While export growth is expected to moderate to about 10% this year, Salzer aims to maintain its export contribution at 27-30% of overall revenues in the medium term.

Outlook and Investor Confidence

Looking ahead, Salzer Electronics aims to sustain double-digit revenue growth for the full year, with a strong focus on improving margins and scaling its smart metering operations. Management projects total CapEx for the current year to be around ₹20 crore or below, primarily for maintenance and balancing. The industrial switchgear business is expected to grow by 25% or more, and the wires and cables division is guided for an 18-20% growth over the next three years. The company anticipates achieving an overall EBITDA margin of 10% for FY26, provided its top-line targets are met.

Salzer's robust foundation, consistent innovation, and customer-centric approach position it well to capture the next wave of growth in India's industrial and infrastructure transformation. The company's proactive engagement in ESG initiatives, including efforts towards a cleaner environment, social contributions, and strong governance practices, further enhances its long-term sustainability and investor appeal. With strategic clarity and disciplined execution, Salzer Electronics is poised for continued progress.