Aarvi Encon: Scaling technical staffing with an asset-light model as revenue reaches INR 6,499 mn in FY26

Aarvi Encon Limited has spent nearly four decades building a specialist position in technical manpower outsourcing and allied engineering services. Incorporated in 1987, the company pioneered technical staffing services in India and has since deployed more than 50,000 personnel over its lifetime. By Q1-FY27, it had over 8,000 engineers and technical professionals on payroll working at client locations, backed by an in-house database of more than 800,000 resumes.

The recent financial trajectory shows a business that is growing with discipline, albeit with the typical margin profile of staffing-led models. Consolidated operational income rose from INR 4,061 mn in FY24 to INR 5,104 mn in FY25 and reached INR 6,499 mn in FY26. In Q1-FY27, operational income stood at INR 1,727 mn. Profitability improved in FY26 with EBITDA at INR 227 mn and PAT at INR 176 mn, compared with EBITDA of INR 134 mn and PAT of INR 100 mn in FY25. The company reported EBITDA margin of 3.49 percent and PAT margin of 2.71 percent in FY26, while Q1-FY27 PAT margin was higher at 3.47 percent.

Aarvi’s story is not built around a single sector cycle. It is tied to the underlying demand for skilled engineers and technicians across oil and gas, engineering, renewables, power, petrochemicals, and infrastructure-led themes such as metro and rail. That diversification has helped it scale deployments from 5,458 personnel in FY24 to 6,667 in FY25 and 8,272 in FY26, with 8,288 in Q1-FY27.

A staffing engine built on repeat client needs

Aarvi’s core proposition is simple and operationally focused. It supplies engineers, designers, and technicians across the project value chain, from conceptualization and design through construction, pre-commissioning, commissioning, and ongoing operations and maintenance. It can also mobilize large teams for short shutdown assignments lasting 15 days to a few months, which is a common need in refineries, petrochemical plants, and industrial facilities.

In Q1-FY27, manpower outsourcing contributed 88 percent of business mix, with operations and maintenance at 11 percent and others at 1 percent. This makes it clear that staffing remains the primary growth lever, while O&M provides an additional layer of stickiness and operating leverage. The sector exposure reinforces the breadth of demand. Q1-FY27 industry-wise revenue was led by engineering at 31 percent, oil and gas at 30 percent, and renewables at 20 percent. Construction accounted for 7 percent, while chemicals and petrochemicals together accounted for 7 percent, and others were 5 percent.

A key advantage in this model is the company’s ability to deliver fast, compliant manpower at scale. Aarvi positions itself as an end-to-end solution provider with government statutory compliance, a strong in-house database, and a flexible hiring model. Its business is also described as asset light, which aligns with the low gearing reflected in net debt to equity of 0.10x in FY26.

What drove FY26: scale, mix, and execution discipline

From FY24 to FY26, Aarvi expanded operational income by more than INR 2,400 mn while also increasing its deputed manpower base meaningfully. This is an important linkage for investors because staffing models are volume-driven and depend on consistent client demand, strong recruiter execution, and the ability to maintain compliance and service levels across geographies.

FY26 stands out because margins improved alongside growth. EBITDA margin rose to 3.49 percent from 2.63 percent in FY25, and PAT increased to INR 176 mn. The higher profitability points to better operating leverage, improved cost management, or a more favorable mix across segments and contracts. At the same time, Q1-FY27 EBITDA margin of 2.61 percent shows that quarterly margin movement can be uneven, which is typical in businesses with project-linked deployments and contract ramp-ups.

The business is also increasingly shaped by India’s project cycle and by global energy and infrastructure requirements. Aarvi serves sectors such as oil and gas, refinery and petrochemical, pipelines, LNG and tank terminals, engineering, renewables, and power. It highlights ISO 9001:2015, ISO 45001:2018 for safety, and ISO 14001:2015 for environmental management systems, which are material when staffing into high-risk industrial environments.

Client concentration risk is partially mitigated by a wide roster of corporate clients and diversified sectors. The presentation cites 150+ global corporate clients and lists several marquee names across Indian and international industrial ecosystems. For a manpower outsourcing company, these relationships matter because repeat orders and long-duration projects are the foundation of predictable deployment volumes.

O&M: higher-margin stickiness supported by industrial assets

While manpower outsourcing dominates revenue, operations and maintenance adds a different character to the model. The company positions itself as a leading O&M services provider in India for tank terminals, solar energy, pipelines, and oil and gas. It also notes that O&M garners higher margin.

The O&M revenue numbers show volatility across periods, which suggests contract timing effects or changes in the run-rate of certain assignments. The presentation provides O&M revenue of INR 607 mn in FY24, INR 868 mn in FY25, INR 910 mn in FY26, and INR 190 mn in Q1-FY27.

A practical example is the HPCL Mittal case study for crude tank terminal and pipeline operations. The terminal and cross-country pipeline system runs from Mundra in Gujarat to Bathinda in Punjab, supplying crude oil to the 9 MMTPA HMEL Guru Gobind Singh Refinery. Aarvi’s scope includes operating and maintaining terminals and pumping stations across multiple locations, including Mundra tank farm and Bathinda receiving terminal. The company highlights outcomes such as zero spillage, full manpower coverage round the clock, support for localization of maintenance for imported pumps and motors, savings of more than USD 40,000, and more than 98 percent equipment uptime.

This case study matters because it illustrates how staffing and O&M capabilities can be combined into mission-critical service delivery, and why safety, compliance, and operational rigor are central to retaining such contracts.

International footprint and the next phase of growth

Aarvi has leveraged its Indian track record to expand internationally, with projects and operations cited in the UAE, Saudi Arabia, Qatar, Malaysia, Indonesia, and Oman. In Q1-FY27, geographical sales were 89 percent India and 11 percent international. That mix indicates the international opportunity is still in an early scaling phase relative to the domestic business, but the company has spent years laying groundwork.

The milestone timeline shows a steady international build-out. It opened a subsidiary in the UAE in 2015, partnered with a UAE employment services firm in 2018, incorporated operational offices in Qatar, Oman, and Indonesia in 2022, acquired MNR Technical Services in the UAE in 2023 through Aarvi Encon FZE, and incorporated a wholly owned subsidiary in Saudi Arabia in 2024 under the name Aarvi Energy Company. In 2026, it established an office in Malaysia. These steps align with the company’s stated future growth strategy of dedicating an international sales team for international deputation and building a stronger international presence.

The broader industry backdrop supports this plan. The presentation points to workforce formalisation and organised flexi-staffing adoption, infrastructure and industrial capex, and energy transition themes in renewables, power, and oil and gas. It also cites a shift toward integrated workforce solutions rather than only manpower deployment.

Aarvi’s strategy list connects directly to execution levers that matter in staffing. It aims to increase wallet share from existing clients through cross-selling and up-selling, add new clients in existing verticals, and expand into new verticals such as automobile, marine, airports, ports, defence, and healthcare. It also emphasizes constant focus on quality standards and compliance, better talent acquisition, and operational excellence.

Digitalization is another notable focus area. The company plans to digitalize processes to enable contactless operations management and to use AI to improve operational efficiency. For a large staffing business, digital tools can improve recruiter productivity, speed up onboarding and compliance documentation, and strengthen deployment management at client sites.

Balance sheet strength and what it enables

Aarvi’s balance sheet shows an equity-funded growth profile with controlled leverage. Shareholder funds increased from INR 1,167 mn in FY24 to INR 1,253 mn in FY25 and INR 1,421 mn in FY26. Net debt to equity was 0.10x in FY26, consistent with the company’s positioning as an asset-light business.

Working capital remains a key financial consideration because trade receivables are a large line item. Trade receivables were INR 830 mn in FY24, increased to INR 1,155 mn in FY25, and were INR 1,024 mn in FY26. In staffing, receivables management matters because the business pays manpower costs regularly while client collections can lag. The company’s continued growth alongside low gearing indicates that it has been able to fund operations without taking on heavy debt.

Profitability metrics improved in FY26. ROE was 12.39 percent and ROCE was 13.80 percent, up from 7.98 percent ROE and 8.88 percent ROCE in FY25. For investors, this improvement suggests that higher scale in FY26 translated into better returns on capital, even with modest absolute margins.

Takeaways: scale with compliance, and expand with discipline

Aarvi Encon’s recent performance reflects a staffing-led company that is scaling deployments while keeping leverage low. FY26 delivered a step-up in revenue to INR 6,499 mn and an improvement in EBITDA and PAT, supported by higher manpower deputation. The Q1-FY27 numbers show continued scale in revenue and a strong PAT margin, while also reminding investors that quarterly margins can move with mix and ramp-up dynamics.

The core investment case rests on execution in a few areas. First is deepening relationships with a broad client base and increasing wallet share. Second is building a higher-margin, stickier services layer through O&M, where the company has demonstrated operational outcomes in critical infrastructure such as crude tank terminals and pumping stations. Third is international expansion, which is still a smaller share of sales at 11 percent in Q1-FY27 but is supported by a decade-long footprint build-out across the GCC and Southeast Asia.

The company’s stated focus on compliance, quality systems, and digitalization is not optional in this space. It is a prerequisite for long-term contracts in high-safety industrial settings. If Aarvi can keep scaling manpower deputation while maintaining service standards and improving mix toward O&M and integrated workforce solutions, the next phase of growth could be defined by disciplined execution rather than aggressive leverage or risky diversification.