Gabion Technologies India: FY26 ends with stronger profitability, FY27 framed as an execution and capacity ramp year

Gabion Technologies India Limited closed FY26 with a mix of steady topline growth and sharper improvement in profitability, supported by a stronger second half and a higher share of services-led execution work. On a consolidated basis, total income for FY26 stood at INR115.58 crore, up 14.15% year on year. EBITDA rose to INR17.79 crore (up 15.75%), while profit after tax increased to INR8.11 crore (up 31.04%).

The momentum was clearer in H2 FY26, when total income rose to INR74.87 crore from INR57.84 crore in H2 FY25, a 29.42% increase. EBITDA for H2 FY26 jumped to INR11.91 crore from INR6.92 crore, and PAT increased to INR5.69 crore from INR3.05 crore. In the earnings call, management also indicated that H2 EBITDA margin improved to about 15.91% and net profit margin to about 7.60%.

At the same time, management acknowledged that FY26 revenue growth came in below an earlier expectation shared during the IPO interaction. The reason given was operational rather than demand-led: around INR15 crore of work-in-progress could not be billed during the financial year, which reduced reported growth.

The business mix: manufacturing and execution move closer together

Gabion Technologies operates through three verticals that together make it an integrated geotechnical solutions provider: Manufacturing and Supply, Trading and Distribution, and Services. The company positions itself not just as a product supplier, but as a player with in-house design and on-ground execution capability.

The FY26 vertical mix reflects this balance.

In FY26, Manufacturing contributed 49.65% of revenue, Services contributed 44.61%, and Trading contributed 5.75%. This was a shift from FY25, when Manufacturing was 57.03%, Services was 33.50%, and Trading was 9.47%.

Management commentary in the concall linked profitability improvement to this mix change. The MD stated that services enjoy meaningfully higher margins than manufacturing and quantified the gap as “approximately 10% higher” for services. When pressed further, management agreed with an approximate framing of about 20% margin for services versus about 10% for product business.

Another nuance from the call is how Gabion classifies revenue. Management explained that product sold directly to external customers is treated as product sale, but products used internally in the company’s own installation projects are captured as service sale because billing happens after installation. This accounting framing is important when interpreting revenue mix and the relationship between tonnage output and reported manufacturing revenue.

Financial snapshot (Consolidated)

Demand backdrop and execution positioning

The investor presentation frames the company’s addressable market around geotechnical protection and climate-resilient infrastructure. It highlights applications across slope stabilization, erosion control, rockfall protection, river training, retaining structures, and flood protection. The company’s footprint spans 29 states and union territories in India and includes subsidiaries in Bangladesh and Nepal.

From a client and sector lens, the company reported a higher share of private sector revenue in FY26. Sector-wise revenue bifurcation in the presentation shows private sector at 82.25% and government sector at 17.75% in FY26, compared with private 64.34% and government 35.66% in FY25.

The company also outlined a bidding and execution process typical of infrastructure protection works: tender-based procurement and evaluation (especially for government projects), performance guarantees, design validation and approvals, mobilization, quality control, completion, and retention release after the defect liability period.

In the earnings call, management emphasized that services revenue is not entirely dependent on government tenders. It described work done for large private contractors as specialized execution, driven by capabilities and relationships rather than tender wins.

Order book and FY27 framing: INR200 crore as a headline number

The most prominent operational metric across both the presentation and the concall is the order book. Management stated an order book of about INR200 crore as of March 2026, and the presentation repeats the same figure. In the concall, management said this provides “strong revenue visibility,” and further indicated that the current order book is expected to be completed within the ongoing financial year.

When asked about the composition of the order book, management stated that it is roughly 50% product and 50% project. It also said that within the project component, about half relates to ongoing projects that were already underway and the other half is from newer projects.

On revenue expectations, management gave explicit targets.

It stated a turnover target of INR200 crore for FY27, describing it as roughly 40% to 45% growth over FY26. It also stated that an earlier reference to INR300 crore was meant for FY28, not FY27.

Management also guided for EBITDA margin improvement of 1 to 2 percentage points, attributing it to economies of scale.

Capacity expansion and capex: the operational lever management is betting on

Capacity is the second anchor of the FY27 narrative.

Management stated that production capacity was 12,000 tons at the time of the call, with 3,000 tons of machinery already on the way, implying 15,000 tons. It further stated that capacity is expected to become 18,000 tons by September 2026.

In terms of potential revenue, management stated that 18,000 tons could translate to about INR180 crore to INR200 crore of product sales turnover. It also described demand as strong enough to absorb capacity quickly, while noting seasonality (rainy season) can affect construction activity. Management indicated full-capacity selling could be more visible from October and November.

On capex, management stated that around INR4 crore of capex was done in FY26 funded via internal accruals and bank loans, with another INR2 crore ongoing (machinery and building construction). It also stated that total capex since last year would be approximately INR8 crore, with only about INR1 crore coming from IPO proceeds.

The presentation also includes a map reference to a proposed manufacturing unit in Assam, but it does not provide further details on capex, timing, or scale.

Balance sheet and working capital: growth needs tighter conversion discipline

While the P&L improved, the balance sheet shows heavy working capital deployment.

On a consolidated basis, FY26 inventories rose to INR35.50 crore (from INR22.18 crore in FY25) and trade receivables rose to INR42.82 crore (from INR25.35 crore). Cash and bank balance at year end was INR0.09 crore.

In the concall, management linked the inventory increase to the same INR15 crore work-in-progress which was not billed, calling it “unpaid revenue” because the work was substantially completed but not certified or fully completed for billing.

Management also said receivables were elevated because the company had around INR50 crore of sales in the last quarter. It suggested that as quarterly turnover rises, receivables of around INR40 crore could persist as a steady state.

On working capital cycles, management stated that product sales typically run at about 45 to 60 days, and services around 60 to 70 days. It also noted that some private companies do not fully adhere to the 45-day MSME payment expectation, although it cited better compliance from certain large customers.

These comments do not remove the underlying investor concern: the company’s growth ambitions for FY27 are tied to higher throughput and execution velocity, which typically increases the strain on inventories, receivables, and bank funding unless cash conversion improves.

Capital structure and reported ratios

The consolidated key ratios shared in the presentation show a reduction in leverage on a reported debt-to-equity basis.

Debt to equity reduced to 0.77 times in FY26 from 2.11 times in FY25, while net worth increased to INR56.84 crore from INR22.14 crore. ROE and ROCE declined over the three-year period presented, with ROE at 14.27% and ROCE at 16.04% in FY26.

Management also said finance costs were INR4.7 crore in FY26 and expects them to remain around the same level in FY27.

What investors should track from here

Gabion Technologies ends FY26 with a clear message: profitability is improving, order book visibility is strong, and manufacturing capacity is being expanded materially by September 2026. The company is also explicit about its next milestones. It has stated an INR200 crore turnover target for FY27, expects most of the INR200 crore order book to be executed within the year, and guides for a 1 to 2 percentage point improvement in margins.

But the execution path has identifiable pressure points. The company itself attributed an FY26 growth miss to billing delays on INR15 crore of work-in-progress. The FY26 balance sheet reflects a business that is working capital intensive, with inventories and receivables rising faster than revenue and cash at year end remaining low.

The core FY27 question is not just whether demand exists. The documents suggest demand is robust. The operational question is whether the company can ramp capacity, execute projects quickly, and convert that growth into cash without letting working capital and funding costs become the limiting factor.