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Admach Systems FY26: Growth with Working Capital Pressure, and a Bet on In-house Manufacturing

Admach Systems Limited, a Pune-based engineering company focused on special purpose machinery and industrial inspection systems, closed FY26 with sharp growth in scale and profits. Revenue from operations rose to INR 68.91 crore in FY26 from INR 53.36 crore in FY25. EBITDA came in at INR 13.69 crore and net profit at INR 10.01 crore.

The company positions itself as a bespoke, tech-first engineering solutions player across steel processing lines, handling and packaging equipment, and NDT and X-ray inspection systems. Its pitch to investors is built around three themes: engineered-to-order capability, mission-critical exposure in defence and nuclear programs, and long-standing customer relationships.

FY26 performance: Revenue up, profit up, margins steady versus FY25

FY26 numbers in the investor presentation show the company sustaining profitability while scaling execution.

The company also highlighted a stronger second half. H2 FY26 revenue from operations was INR 40.46 crore versus INR 31.86 crore in H2 FY25, with net profit of INR 5.54 crore versus INR 4.23 crore.

However, margins in H2 were a talking point on the earnings call. Management attributed margin variation mainly to project mix, stating that profitability differs across industries and that earlier periods benefited from a large steel-sector project.

Business mix: Steel dominates, but the company is pushing beyond it

Admach’s FY26 segment mix, disclosed in the investor presentation as a percentage of revenue, shows steel machinery as the largest contributor at 54.67%. Packaging machines contributed 16.19%, railways 5.33%, and smaller contributions came from NDT equipment, oil and gas, and defence.

Using FY26 revenue from operations (INR 68.91 crore) and the disclosed percentages, the implied revenue by segment is as follows.

Management was asked for a product-wise revenue bifurcation on the call, but said the detailed split would be shared later through investor relations.

Geographically, the business remains India-heavy. FY26 revenue was 92.38% domestic and 7.16% international, after a higher export share of 12.61% in FY25.

Defence and nuclear: A higher-stakes adjacency

A recurring theme in the presentation and concall is Admach’s presence in defence, aerospace, nuclear and atomic energy applications. The company describes itself as a supplier of NDT and X-ray radiography systems used in inspection where failure tolerance is near zero.

On the concall, the Managing Director described recent defence-linked X-ray systems used for inspection of fully assembled shells and missile bodies. Examples cited included exports to government-linked end users in Brazil, Taiwan, and Korea. While the company did not provide financial contribution by customer, it repeatedly highlighted strong inquiry momentum in defence, including discussions around equipment for 155 howitzer shells.

In nuclear, management confirmed an order of around INR 10 crore from Nuclear Fuel Complex, targeted for execution by September. They also indicated a pipeline of multiple similar projects, though details were restricted due to non-disclosure commitments.

Capacity and capex: The focus is on backward integration

A major operational initiative discussed in the concall was the installation of new in-house manufacturing equipment. Management said it had added CNC machines, a CNC laser cutting machine, a CNC press brake and tapping machines, with some equipment still to be delivered by July.

The stated rationale is straightforward: reduce outsourced job work, improve delivery speed and accuracy, and lift margins. Management quantified the expected benefit, indicating an EBITDA margin improvement of about 3% to 4% once the new machines are fully commissioned and utilized.

The company also stated that its in-house versus outsourced processing mix was earlier around 30% in-house and 70% outsourced, and is expected to flip to about 70% in-house and 30% outsourced after this capex.

On capacity, management stated the current Pune facility can support around INR 200 crore of revenue, while FY26 revenue was around INR 70 crore.

Balance sheet: Debt reduced sharply, but working capital has expanded

The FY26 balance sheet shows a marked reduction in borrowings. Short-term borrowings and long-term borrowings were shown as nil at FY26 year-end, and the debt-equity ratio improved to 0.01 times.

At the same time, working capital intensity increased. Trade receivables rose to INR 31.32 crore in FY26 from INR 18.37 crore in FY25, and inventories were INR 28.24 crore.

This showed up in cash flows. Operating cash flow was negative in FY26 at INR -4.53 crore, while investing cash flow was INR -19.19 crore and financing cash flow was INR 26.84 crore.

On the call, management attributed receivable increases to project-based billing and milestone structures, explaining a typical cycle as 20% advance, 70% before shipment, and 10% after installation. They also noted that dispatch delays due to vessel and container availability affected billing and collections for certain projects.

Separately, management disclosed that advances from customers within other current liabilities were INR 9.74 crore.

Guidance and near-term priorities

Management commentary included several forward-looking statements. These were not presented as formal exchange guidance, but were clearly articulated on the call.

• Revenue trajectory: management said the company grew from around INR 19 crore to INR 53 crore to INR 70 crore, and expects to cross INR 100 crore in the coming year.
• Margin target: the company indicated a target of 20% or above EBITDA margin in FY27, supported by the backward integration capex and cost reductions.
• Order book execution: the company stated its order book is around INR 64 to 65 crore and expects it to be completed by end of September.
• Working capital: management indicated working capital days could be about 75 in FY27.

Takeaways

Admach’s FY26 story is defined by strong execution and a broader positioning attempt. It remains a steel-machinery-led company by revenue mix, but management is actively highlighting defence and nuclear as faster-growing adjacencies where technical qualification and switching costs can be high.

For investors, the two operational threads to track are clear. First, whether the backward integration capex translates into sustained margin improvement as claimed. Second, whether cash conversion improves, given the FY26 operating cash outflow and the rise in receivables.

The company has reduced leverage sharply and is describing a path to scale within existing capacity. The next few quarters should show whether higher revenue can be delivered without stretching working capital further, and whether the mix shift toward mission-critical applications becomes financially visible in reported numbers.