Aartech Solonics in FY26: Margins Bounce Back, Cash Flow Remains the Watch Item

Aartech Solonics Limited closed FY26 with a sharp improvement in profitability, even as working capital continued to weigh on operating cash flows. The company reported consolidated revenue from operations of ₹4,088.42 lakhs (about ₹40.88 crore) for FY26, up from ₹3,635.22 lakhs in FY25. FY26 consolidated EBITDA rose to ₹718.44 lakhs with a 17.03% margin, compared with ₹266.01 lakhs and a 6.76% margin in FY25. Consolidated profit after tax (PAT) came in at ₹397.05 lakhs versus ₹276.42 lakhs the year before.

In its first virtual earnings interaction with investors, management positioned FY26 as a year where the company moved further on three tracks: strengthening domestic utility and PSU relationships, extending exports into new geographies, and pushing deeper into innovation-led segments including defence applications and energy storage.

Operationally, the company continues to operate with a product mix that spans both high-volume and price-sensitive categories such as Control and Relay Panels, and higher-value niche offerings such as its Bus Transfer System (BTS 2000) and fault current limiter. Management described the Control and Relay Panel segment as a volume business with intense competition and margin pressure, while indicating that the company’s flagship BTS product can deliver higher gross margins due to its specialised nature.

FY26 performance: revenue expansion with a notable EBITDA reset

The year’s financial profile is best explained by the margin reset visible at both full-year and quarterly levels. In Q4FY26, consolidated revenue from operations was ₹1,746.45 lakhs, while consolidated EBITDA was ₹190.79 lakhs, translating into an 11.38% margin. The comparable quarter in FY25 recorded negative EBITDA, underscoring how sharply the operating line improved.

Standalone numbers tracked a similar pattern. FY26 standalone revenue from operations was ₹4,017.82 lakhs and standalone EBITDA stood at ₹643.28 lakhs (15.37% margin). Standalone PAT was ₹349.71 lakhs.

The company also disclosed multi-year metrics in its presentation. For FY26, it reported revenue trajectory of ₹4,017.82 lakhs, debt-to-equity of 0.16x, and return on equity of 0.16x.

Strategy and execution themes: exports, advanced automation, and defence innovation

On the business front, management highlighted a set of order wins and project executions during FY26 that it categorised as “major breakthroughs.” The export narrative was anchored by successful execution of an international Bus Transfer System project in Indonesia, along with strategic orders from utilities in Qatar and Oman. Management also stated it achieved its first export of Control and Relay Panels to Africa.

Despite these wins, management kept export expectations measured. In response to an investor question, it stated export contribution for the year is expected to be around 10% of revenue, with domestic markets remaining the dominant contributor.

In India, the company described new traction in advanced substation automation and high voltage automation. It stated it entered the 132kV SAS and high voltage automation segment and is now targeting advanced SAS and SCADA systems. Management also said it is working toward entering the 220kV market for Control and Relay Panels.

Defence and innovation was a separate pillar of the narrative. Management stated it delivered rugged defence-grade solutions to the Indian Air Force and Indian Navy in the last financial year. It also discussed work related to Electromagnetic Launch Systems (EMLS) and said its product was approved by R&D Pune last year. For AAPM (Adaptive Alternate Power Module), management said validation trials were completed across Northern, Western and Southern commands, with inquiries underway. It also stated a patent has been filed for AAPM and is expected in 12 to 18 months.

Capex and the energy storage facility: timeline anchored to FY27 end

A key medium-term initiative is the energy storage manufacturing facility under the Faradigm banner. Management said the foundation stone has been laid and civil infrastructure work is underway. It expects first operations to begin by early next year and targeted commercial operations by end of FY 2026-27 or early FY 2027-28.

Management linked the project to Make in India and Atmanirbhar Bharat, and stated that the facility is intended to focus on next-generation energy storage systems for renewables, defence, and transportation.

Cash flow and working capital: the key investor watch point

The strongest cautionary data point in the disclosure set is operating cash flow. The standalone cash flow statement for Mar’26 showed net cash from operating activities of -₹281.01 lakhs. While the company reported standalone PAT of ₹349.71 lakhs, it also disclosed that changes in working capital were -₹848.59 lakhs.

Management explained this as a function of project execution cycles, stating that many orders run for 120 to 180 days. In such a model, profitability can improve while cash generation remains lumpy, especially when the company scales execution volumes.

Order book snapshot: near-term visibility with bid dependency

Investors asked for current order book and execution timelines. Management disclosed that at the beginning of the financial year it had around ₹10 crore of order book. It also said it had participated in bids of approximately ₹15 crore in value. Based on expected bid outcomes, management stated that by the end of June it expects the order book to rise to around ₹25 crore.

Takeaways

FY26 delivered a clear improvement in operating profitability for Aartech Solonics, with consolidated EBITDA margins expanding to 17.03% and PAT rising to ₹397.05 lakhs. The strategic narrative is built around higher-value niche products, export market entry, advanced automation, and long-gestation defence applications.

At the same time, the company’s cash flow profile highlights the need to track working capital intensity and execution cycles as revenues scale. The FY27 pipeline will be watched for two things: conversion of bids into executable orders and visible progress on the energy storage manufacturing facility that management targets to commercialize by the end of FY 2026-27 or early FY 2027-28.