Elin Electronics Q4 FY26: Revenue held up, margins did not

Elin Electronics ended Q4 FY26 with operating revenue of INR 324.2 crore, up about 3% year on year. But the quarter also exposed how quickly profitability can swing when input costs move faster than customer price resets. EBITDA fell to INR 6.0 crore from INR 20.2 crore a year ago, and the company reported a loss after tax of INR 0.8 crore versus a profit of INR 17.2 crore in Q4 FY25.

For the full year FY26, revenue rose to INR 1,287.7 crore from INR 1,180.2 crore in FY25. EBITDA improved slightly to INR 54.6 crore (FY25: INR 52.4 crore), while PAT declined to INR 22.6 crore (FY25: INR 29.3 crore). Management also highlighted that FY25 PAT included a one-time gain of INR 8.1 crore from a share sale.

The company attributed the Q4 margin collapse to a sharp surge in polymer prices driven by higher crude due to the war and geopolitical disruptions, along with INR depreciation versus the USD. Management quantified the impact as a 390 bps hit to gross margins in the quarter. Because many customers follow monthly or quarterly price settlement cycles, the spike in March had to be absorbed before pass-through could occur.

What moved in the revenue mix

Segment-wise, Q4 FY26 revenue was supported by growth in fans and steady performance in appliances. Total EMS revenue came in at INR 253.0 crore, while non-EMS (components and others) contributed INR 71.2 crore.

Lighting, Fans and Switches delivered INR 94.0 crore in Q4 FY26, up from INR 86.3 crore in Q4 FY25. Within this, fans were the biggest change: fans revenue rose to INR 45.9 crore from INR 27.7 crore, driven by BLDC ceiling fans and TPW fans. Lighting revenue (excluding flashlights) fell year on year, but management described lighting as being at an inflection point and said price declines are now behind the business.

Small appliances revenue increased to INR 94.0 crore from INR 87.1 crore in Q4 FY25. Kitchen and home care stayed flat at INR 61.7 crore, partly because the company deferred orders in March due to surging raw material costs. Personal care rose to INR 32.3 crore from INR 25.4 crore on stronger volumes in hair dryers, sterilizers and heated hair brush.

The fractional horsepower motors segment declined to INR 45.7 crore in Q4 FY26 from INR 51.0 crore. Management clarified that this line reflects third-party sales, and added that it plans to launch cooler motors and BLDC chimney motors during FY27.

Financial snapshot

Cost shock and the pass-through lag

Management’s explanation for Q4 was direct: polymers and the USD-INR move hit a cost basket that forms a meaningful part of inputs. It also noted that aluminium saw sharp increases, and that around 15% of total consumption is imported, which amplifies FX pressure when the rupee weakens.

The bigger structural issue was the timing mismatch between input inflation and pricing resets. With roughly two-thirds of customers on quarterly settlements and the balance on monthly settlements, sudden spikes can compress margins for one or more months. Management expects the price transmission to be fully reflected only by June 2026.

Labour costs added another layer of pressure. The company cited an effective 26% increase in minimum wages in Uttar Pradesh from 1 April 2026. Combined with raw material inflation, it said pricing increases of 10% to 18% were required to sustain earlier margins.

Despite the weak quarter, Elin’s liquidity remained comfortable. Management reported net cash of about INR 70 crore as of March 2026 and said working capital stood at about 59 days. Inventory days were higher than anticipated because the company stocked raw materials in March to protect against potential supply shortages.

FY27 plan: growth with a cautious margin stance

For FY27, Elin guided to about 15% revenue growth over FY26, led largely by home appliances and fans. It did not provide EBITDA guidance, citing continued volatility in raw material costs and FX.

Capex guidance for FY27 was INR 70 to 75 crore, split into INR 45 crore for the Bhiwadi facility and INR 25 to 30 crore for scaling existing businesses. In the investor presentation, management also mentioned INR 45 crore toward Bhiwadi and a balance capex of INR 25 crore toward scaling up existing business.

Working capital days are targeted at about 50 days, with the company expecting improvement mainly through inventory and payables once the environment stabilizes.

Bhiwadi facility: timeline, costs, and revised FY27 contribution

A key strategic focus is the Bhiwadi facility, where the company plans to manufacture medium sized home appliances such as air coolers, chimneys and OTGs. Management said construction is largely complete, and the plant will be fitted out with machines and assembly lines over June 2026, followed by test runs. Commercial production is expected by end-July 2026 or early August 2026.

The company estimated the total project cost at INR 100 crore. Phase 1 is estimated at INR 67 crore, of which INR 26 crore has already been spent and sits in capital work in progress, with INR 41 crore pending to complete Phase 1.

Because of the slight delay in commissioning, Elin revised expected revenue from Bhiwadi in FY27 to INR 80 crore from an earlier estimate of INR 140 crore. However, it also stated that the differential volume will be produced in Ghaziabad, implying no reduction in the company’s overall revenue opportunity for FY27.

Management also shared longer-term economics: it expects the plant’s revenue potential to be around INR 550 crore, with a steady state EBITDA margin of about 7% achievable in the third year of operations, and ROCE of about 20% at those levels.

The takeaway

Q4 FY26 was less about demand weakness and more about timing risk in a volatile cost environment. Revenue grew modestly and fans performed strongly, but a sudden March spike in polymers and FX moved faster than quarterly pricing resets. Management expects full pass-through by June 2026 and has guided FY27 revenue growth at about 15% while withholding margin guidance until the input environment settles.

Over the medium term, execution at the Bhiwadi facility and sustained growth in fans and home appliances will be key variables. The company has laid out clear timelines and return targets for Bhiwadi, but the near-term investor focus is likely to remain on margin normalization and working capital discipline as volatility persists.