/**

Innomet FY26: Strong revenue growth, but input costs squeeze margins

Innomet Advanced Materials Limited closed FY26 with a sharp jump in scale, but profitability lagged as raw material inflation and higher depreciation weighed on margins. Revenue from operations rose to Rs 53.86 crore in FY26 from Rs 32.52 crore in FY25, a 66 percent year on year increase. EBITDA increased modestly to Rs 5.61 crore from Rs 5.06 crore. As a result, EBITDA margin declined to 10.41 percent from 15.56 percent.

PAT moved in the opposite direction. Profit after tax came in at Rs 1.57 crore versus Rs 1.87 crore in FY25, with PAT margin reducing to 2.92 percent from 5.73 percent. Depreciation rose to Rs 2.67 crore from Rs 1.84 crore, reflecting a heavier fixed asset base. Interest cost eased to Rs 0.85 crore from Rs 1.00 crore.

Management attributed the margin compression primarily to higher prices of copper and base metals, and a sharp spike in tungsten prices, which it said rose nearly five times over the last year. The company also stated it acquired Swastik Tungsten through an NCLT process in February 2026 as part of a backward integration approach to strengthen supply security for its tungsten heavy alloy business.

FY26 performance: scale improved, margins contracted

The FY26 P and L table shows the disconnect clearly. Total income rose 68 percent to Rs 54.18 crore, but EBITDA grew only 11 percent. With depreciation up 45 percent, EBIT declined 9 percent. PAT declined 16 percent.

The presentation includes a management quote that mentions revenue rising 66 percent to Rs 753.86 crore, which does not reconcile with the audited P and L table that shows Rs 53.86 crore. For analysis, the audited financial table is the reliable reference point.

Business mix: metal powders drive scale, THA builds strategic value

Innomet operates two manufacturing divisions: metal and alloy powders, and tungsten heavy alloys (THA) components. The FY26 revenue mix is tilted toward the powders business, which contributes 75.4 percent of revenues, while THA contributes 24.6 percent.

On the demand side, the company remains predominantly domestic, but exports are becoming more meaningful. In FY26, domestic sales were 81.7 percent and exports were 18.3 percent. The company also highlights that export share was 9.7 in FY25, indicating a visible mix shift in a single year. It also discloses metal powder export revenues of Rs 8.5 crore in FY26.

The company lists multiple end use industries for metal powders including automotive components, diamond tools, self lubricating bearings, surface coatings, chemical catalysts, additive manufacturing, aesthetics, and energetics. For THA, it positions itself as a powder metallurgy based tungsten heavy alloy provider supplying bars, plates, cubes, spheres, and custom components for defence, radiation shielding, aerospace balancing, and engineering applications.

A notable credential mentioned is AS9100D aerospace certification for the THA division. The company states this enhances global credibility and enables new defence and aerospace opportunities. The certification also forms the backbone of its export push, particularly in high specification defence applications.

Orders and exports: early FY27 visibility

The company provides near term demand indicators. It reports a current order book of over Rs 25 crore in the first two months of FY27. It also cites an Israel order from Scope Metals in THA of around Rs 15 crore in May 2026, and mentions receiving three orders worth $1.88 million plus since March 2026 for THA from Scope Metals.

The presentation also outlines market penetration activity, including brisk sales from the US and Scope Metals, and references a sales representative and product development associate in Israel. It lists a set of global marketing initiatives and event participation across powder metallurgy and defence focused platforms, including PowderMet 2025 in the US and DSEI 2025 in London.

These datapoints matter because Innomet’s FY26 profitability was pressured by input costs. A stronger order book and an expanding export footprint can help the company sustain capacity utilisation and pricing discussions, but only if raw material inflation stabilises or contracts reset quickly.

Strategy: Rs 100 crore target, portfolio expansion, and backward integration

Innomet’s stated medium term target is to cross Rs 100 crore revenue without significant additional capex. The game plan is anchored on exports, portfolio expansion, and product approvals.

On exports, the company plans intensive international marketing using aerospace certification as a credibility lever. It also references the China plus one strategy as a tailwind, implying that global customers are diversifying supply chains.

On portfolio, the proposed Swastik Tungsten acquisition is positioned as a structural move. The company states it is in the process of acquiring a 57.5 percent stake in Swastik Tungsten Private Limited in Maharashtra for a consideration of Rs 1.5 crore. Installed capacity is stated at 120 tonnes per annum.

Management describes two strategic benefits. First, backward integration to secure raw material supply for the THA division. Second, a standalone revenue vertical selling tungsten carbide powders and components to third party customers, which it says is a market much larger than THA.

The company also lists potential new product lines such as tungsten metal powder, tungsten carbide powder, ready to press powder (tungsten carbide plus cobalt mix), and finished tungsten carbide inserts and components. If executed, this would move the portfolio toward higher value added products and potentially improve margins over time.

R and D and capability build: DRDO funded atomizer project

A second major initiative is the IIT Hyderabad and DMRI collaboration for a gas atomizer. The company states it is developing a 100 kg premium metal powder manufacturing facility for aerospace, defence, and additive manufacturing, and describes it as India’s largest indigenous clean metal and alloy powder manufacturing unit.

The project is stated to be DRDO funded with a sanctioned outlay of Rs 8.73 crore, to be executed over three years. When complete, it is expected to produce about 200 to 250 tonnes of clean metal powders annually.

Separately, the growth strategy slide also mentions that a 50 kg gas atomizer is to be commissioned soon and is expected to add to revenues with better margins, though it does not specify a date.

Sustainability: solar, water reuse, and scrap based efficiency

The company outlines multiple sustainability initiatives tied to operations. It claims net zero discharge enabled by circular water and waste systems, rainwater harvesting capacity of 5 lakh litres, and a bio STP of 5,000 litres per day. On energy, it states that reuse of copper and steel scrap delivers 85 to 90 percent energy savings. It also reports a 280 kW solar installation that meets about 25 percent of power needs, with 2.65 lakh units generated in FY26. It also notes a green campus with more than 100 native plant species.

While these disclosures are not linked to quantified cost savings in the presentation, they provide context on operating discipline and resource efficiency, which can matter for industrial manufacturers as energy and compliance costs rise.

What to track next

Innomet enters FY27 with strong reported order book visibility and a clearer export led narrative supported by AS9100D certification and customer activity in Israel. At the same time, FY26 shows that scale alone is not sufficient when raw material costs move sharply, especially in tungsten linked products.

The next phase hinges on three execution markers that are explicit in the presentation. First, whether the Swastik Tungsten integration progresses as planned and begins contributing to supply stability and new revenue lines. Second, whether the DRDO funded atomizer project stays on schedule across the three year execution window and delivers the stated 200 to 250 tonnes annual output. Third, whether export momentum continues, taking the export share beyond 18.3 percent while protecting margins.

The FY26 picture is therefore mixed but directionally important. Revenue growth suggests demand traction and market access is improving. Margin pressure highlights the need for stronger pricing power, product mix improvement, and supply security. The company’s stated initiatives address those pain points, but investors will need to watch delivery against timelines and the ability to translate capability building into sustained profitability. **/