Mangal Electrical in FY26: Volume Growth Meets CRGO Price Pressure

/n# Mangal Electrical in FY26: Volume Growth Meets CRGO Price Pressure/n/nMangal Electrical Industries Limited operates in a niche but critical part of the power transmission and distribution value chain. The company processes transformer components such as CRGO and amorphous cores, manufactures transformers, and executes EPC work for electrical substations. With five manufacturing facilities in Rajasthan and approvals that include PGCIL qualification for CRGO processing up to 765 kV class, the business is positioned as an enabler for India’s grid expansion and modernisation cycle./n/nIn FY26, the company reported revenue of 579.7 crore, EBITDA of 66.8 crore at an 11.8% margin, and PAT of 41.7 crore at a 7.4% margin. Management characterised the year as challenging due to declining CRGO prices throughout the period, which led to muted value growth and pressured profitability. Even so, it reported 20% volume growth in its core product and said that capacity expansion in CRGO processing lines helped build momentum in Q4./n/n## A components-led business, with scale rising steadily/n/nThe company’s revenue mix remains decisively oriented toward transformer components. In FY26, transformer components contributed 71% of revenue, transformer manufacturing contributed 15%, and EPC and other revenue formed the remaining 14%. This mix matters because components are the most mature and scaled vertical, and also the one management repeatedly highlights as the core growth driver./n/nOne of the more measurable indicators in the presentation is the steady rise in CRGO processing volumes. CRGO volume increased from 6,220 MT in FY23 to 10,161 MT in FY24, 12,717 MT in FY25, and 15,283 MT in FY26. This progression supports the idea that the company has been expanding throughput and customer reach even when pricing trends turn unfavourable./n/nThe transformer components revenue split shown in the presentation also suggests that CRGO processing is the largest contributor within the vertical. In FY26, the component bifurcation indicates CRGO processing revenue of 359 crore, amorphous core at 38 crore, and ICB at 13 crore. The deck also notes the addition of Vacuum Circuit Breakers during the year, framing it as product portfolio expansion aligned with sector tailwinds./n/n| Metric | FY24 | FY25 | FY26 |/n|---|---:|---:|---:|/n| Net revenue (crore) | 449.5 | 549.4 | 579.7 |/n| EBITDA (crore) | 42.6 | 81.8 | 68.3 |/n| EBITDA margin (%) | 9.5 | 14.9 | 11.8 |/n| PAT (crore) | 20.9 | 47.3 | 43.2 |/n| PAT margin (%) | 4.7 | 8.6 | 7.4 |/n/n## Transformers and EPC: mix shifts within the non-core verticals/n/nOutside components, the FY26 picture is mixed. Transformer revenue declined to 89 crore in FY26 from 127 crore in FY25, according to the segment charts in the presentation. In contrast, EPC revenue rose sharply to 68 crore in FY26 from 16 crore in FY25. The company states that it began EPC work in 2015 and, as of the presentation, had executed four projects and had four ongoing projects./n/nManagement’s commentary provides a clear positioning for these verticals. The greenfield transformer plant is described as being under implementation and intended to move the company upwards in the transformer value chain through high voltage approvals and larger capacity products over the next 2 to 3 years. EPC is described as an adjacency, with management indicating it will be selective in bidding, focusing on high margin projects while gradually building credentials./n/nThis is consistent with the broader strategy slides, which highlight the company’s intent to scale manufacturing capabilities, expand into higher kV class products, and diversify both product portfolio and markets. The manufacturing infrastructure section also notes an aim to increase transformer capacity by FY27, alongside upgrading manufacturing approvals from the current 33 kV/10 MVA to 132 kV/100 MVA class./n/n## Balance sheet snapshot: lower debt and higher cash in FY26/n/nThe balance sheet data presented for FY26 shows a materially different capital structure compared to FY25. Net worth is shown at 590.4 crore in FY26 versus 162.2 crore in FY25. Total debt reduced to 45.4 crore in FY26 from 149.1 crore in FY25. Cash and cash equivalents including fixed deposits increased to 152.0 crore in FY26 from 13.0 crore in FY25. The presentation does not explicitly explain the drivers of these changes, but the reported figures are significant and shape how investors may interpret liquidity and leverage position at the end of FY26./n/n## Strategy anchored on approvals, higher kV capability, and sector tailwinds/n/nMangal Electrical’s strategy is closely tied to qualification-led entry barriers. The company highlights NABL and PGCIL CRGO lab approvals, and states it has PGCIL approval for CRGO processing up to 765 kV class. It also lists customer approvals from entities including NTPC, Adani Renewables, Powergrid, ReNew Power, BHEL and others. These approvals act as a gatekeeper in the transformer supply chain and help explain why capacity expansion and certification remain central to the company narrative./n/nThe industry framing in the presentation supports management’s confidence. The deck cites a forecast of 8.2% CAGR in India’s transformer market from 2026 to 2031, alongside the 500 GW renewable energy target by 2030 and large planned transmission investments through 2032. Management also points to global opportunities in the US and Europe linked to grid modernisation, data centres, EV adoption, and aging infrastructure./n/nThe key FY26 takeaway is that the company delivered volume growth even as pricing trends hurt reported profitability. The next phase, as communicated in the presentation, depends on execution of capacity additions, successful movement toward higher voltage transformer approvals, and disciplined scaling of EPC. If management delivers on these operational upgrades, the company may expand its addressable market beyond its current component-led base while keeping its approvals-led differentiation intact./n