/** blogpostTitle: Harsha Engineers FY26: Engineering margins improve as Solar accelerates and Advantek ramps up blogpostSlug: harshaf26-update blogpostCoverImageUrl: null blogpostCoverImageDescription: An ultra realistic corporate finance scene showing a clean glass boardroom table with a laptop displaying a professional dashboard of three line charts for quarterly revenue, EBITDA margin, and PAT margin from FY25 to FY26, alongside a pie chart splitting FY26 revenue into Engineering and Solar segments; muted blue and green color palette, sharp lighting, no logos or readable text blogpostShortTitle: Harsha Engineers FY26 growth and margins */

Harsha Engineers FY26: Engineering margins improve as Solar accelerates and Advantek ramps up

Harsha Engineers International Limited closed FY 2025-26 with a clear improvement in scale and profitability on a consolidated basis. Revenue from operations rose to INR 1,626.79 crore for the year, up from INR 1,407.65 crore in FY 2024-25. Profit after tax increased to INR 155.20 crore versus INR 89.31 crore last year, helped by better operating performance and a much stronger Q4.

In Q4 FY26, consolidated revenue from operations was INR 473.91 crore. EBITDA was INR 83.95 crore, translating to a 17.9 percent margin, while PAT was INR 47.23 crore with a 10.0 percent margin. Management attributed performance to stronger demand, better export traction, product mix, and cost control, while also referencing a one-time impact related to the new labour code provisions in Q3 FY26.

Segment mix: Engineering remains the core, Solar adds momentum

The company’s reported revenue mix shows engineering continuing to dominate. Engineering and Others (consolidated) delivered INR 1,443.56 crore in FY26, while Solar EPC and O and M added INR 183.23 crore.

Solar was a meaningful swing factor in Q4. Solar revenue for the quarter rose to INR 91.84 crore compared to INR 42.65 crore in Q4 FY25, contributing to the sharper consolidated growth rate for the quarter. Management also said Solar benefited from supportive policy and demand tailwinds, particularly in Gujarat, and expects the segment to continue growing.

Within engineering, Harsha continues to position itself as a global bearing cage supplier, with the investor presentation stating supply relationships with each of the top six global bearing manufacturers. Engineering revenue outside India was reported at 58.1 percent in FY26 (up from 56.8 percent in FY25).

Financial snapshot (consolidated)

Engineering performance: exports support growth, margins recover

Engineering and Others (consolidated) revenue increased to INR 1,443.56 crore in FY26 from INR 1,268.85 crore in FY25. Engineering EBITDA was INR 263.85 crore for FY26, while engineering PAT was INR 145.13 crore.

In the call, management said export growth from India was aided by improving industrial demand in Europe and the removal of US import tariffs on cages to NIL, which supported a pickup in US shipments. Management also said volume growth was the key driver in the quarter, noting that metal prices did not see significant movement for much of the period and only rose later in the quarter.

India Engineering, which includes the wholly owned subsidiary Harsha Advantek, reported FY26 revenue of INR 1,088.16 crore and EBITDA of INR 259.57 crore. India engineering EBITDA margins were cited at around 22 percent for the year, and management indicated that the margin profile is expected to be maintained with efforts to improve it over time.

Two specific growth vectors were highlighted.

First, the bushing segment. Management said bushings delivered revenue of about INR 127 crore in FY26 and guided for 25 to 30 percent growth in FY27. A key driver mentioned was a design conversion in wind gearboxes, where components are shifting from bearings to bushings.

Second, stampings. In Q and A, management disclosed stampings revenue of around INR 60 crore for FY26 and indicated expectations for further growth, with applications across automotive, industrial, railway, and white goods, including air-conditioning compressor components.

Subsidiaries and capex: China expansion begins, Romania remains the drag

The call provided clear numbers for the overseas subsidiaries.

Harsha China reported turnover of about INR 120 crore and PAT of about INR 5 crore for FY26. Management confirmed that implementation of the China brownfield expansion project has commenced, aimed at expanding the mix from predominantly brass cages to a better mix of steel and brass cages. The project is expected to be operational in H2 FY28.

Harsha Romania reported turnover of about INR 247 crore and a PAT loss of about INR 14 crore. Management said Europe demand is improving gradually, but profitability remains challenged due to inflationary pressure and the need to reset the cost structure. Management also said it is working to increase the cages share in Romania from about 22 percent to over 30 to 35 percent, while pushing key customers to increase offtake.

A key domestic investment theme is Advantek. Management stated that Advantek posted positive EBITDA for FY26 but still reported a loss of about INR 11.42 crore due to interest and depreciation. Management expects capacity utilisation to improve and guided that sales from Advantek should grow at least three times in FY27.

On capital allocation, the CFO said consolidated capex was about INR 120 crore in FY26, with about INR 20 crore in Q4. For FY27, management indicated maintenance capex of about INR 30 to 40 crore in India.

Working capital and near-term risks

Working capital remained elevated. The presentation shows consolidated receivable days increasing to 85 days in FY26 from 78 days in FY25. Inventory days for finished goods were 33 days, while trade creditors days were 43 days.

Management also acknowledged near-term cost pressure from inputs such as oils, lubrication, and plastic cage material. On logistics, management said there was no immediate disruption observed, noting that shipping routes had already adjusted after earlier disruptions.

What management guided for FY27

Management’s forward view for FY27 was measured and primarily directional.

The company guided for overall double-digit revenue growth in FY27, with India engineering expected to grow in the mid-teens. Management also said its intent is to maintain the current margin profile, with efforts to improve margins over time.

For Solar, management said the segment remains in a tailwind environment and expects growth to continue, including an expectation of more than 25 percent growth going forward, while maintaining EBITDA margins with marginal improvement.

The key swing factors to watch from the discussion are the pace of Advantek ramp-up, progress on Romania profitability improvement, and execution of the China brownfield expansion timeline.