/** Title: Prostarm FY26: Order book strength meets a working capital spike */

Prostarm FY26: Order book strength meets a working capital spike

Prostarm Info Systems ended FY26 with steady headline profitability, but a messy finish to the year. Consolidated revenue from operations rose to INR 385.8 crore, up 10% year on year. EBITDA was INR 46.3 crore and PAT came in at INR 33.0 crore. The year was shaped by two forces moving in opposite directions. One was strong demand visibility, reflected in a large executable order book. The other was execution and supply-chain friction in Q4, which pushed billings into the next year and stretched working capital.

In Q4 FY26, revenue from operations was INR 104.5 crore. While it grew 27.4% year on year, it fell 34.9% sequentially. EBITDA margin compressed to 10.43% from 12.65% in Q3, and PAT margin slipped to 7.56% from 9.28%. Management attributed the weak quarter to temporary supply chain disruptions and manufacturing challenges caused by limited gas availability, linked to the ongoing West Asia conflict. Several orders planned for March were deferred, and the company expects these to be executed in Q1 FY27.

What drove FY26 revenue and where it came from

Prostarm operates a mixed model. It manufactures and assembles power conditioning and energy storage products, sells third-party batteries and allied items, executes solar EPC, offers value-added services like rentals and AMC, and has built a fast-growing System Integration Solutions business that covers enterprise technology infrastructure including end user devices, servers, networking, surveillance, and digital display solutions.

For FY26, the company disclosed a segment revenue mix by percentage. Manufactured Power Solution Products contributed 38%, System Integration Solutions contributed 32%, Third Party Power Solution Products and other products contributed 27%, Value Added Services contributed 2%, and BESS-EPC contributed 1%.

The trend over the last few years shows that growth has not been uniform across segments. Manufactured Power Solution Products revenue was INR 145.2 crore in FY26 versus INR 121.4 crore in FY25, after a strong FY24. Third-party products were INR 105.4 crore in FY26 versus INR 111.1 crore in FY25. Solar EPC dropped sharply to INR 0.4 crore in FY26 from INR 19.4 crore in FY25. Meanwhile, System Integration Solutions scaled meaningfully to INR 121.2 crore in FY26 from INR 94.1 crore in FY25, reflecting a rapid ramp-up from a low base.

Order book is the headline, but the mix matters

As of April 2026, Prostarm reported order in hand of INR 1,106.4 crore across 64 projects and L1 status orders of INR 95.8 crore across 9 projects, taking the total to INR 1,202.2 crore. The order book is heavily skewed toward BESS. The presentation shows BESS-EPC orders of INR 40.4 crore and BESS-Developer orders of INR 853.8 crore, taking total BESS orders to INR 894.2 crore.

Outside BESS, solar EPC order book was INR 185.1 crore. Manufactured power solution products order book was INR 26.1 crore and value-added services stood at INR 0.9 crore.

The quality of demand visibility also depends on customer mix. The company disclosed that 82% of order book value is from government and 18% from private customers. The execution profile in government projects can be large and sticky, but it can also elongate collections and working capital, which is already visible in FY26 numbers.

Management added another layer of nuance in the earnings call. It indicated it is exploring hiving off both BESS developer-mode projects due to market disruption and pricing volatility. On the call, management mentioned overall project IRR for the developer projects at around 10% to 11%. It also stated that the Bihar project execution is targeted in FY27, while Karnataka has hurdles.

Margins softened and working capital expanded

FY26 EBITDA margin declined to 12.0% from 12.98% in FY25. Management attributed this to higher procurement costs and increased employee expenses linked to expansion initiatives. Employee expenses rose from INR 22 crore in FY25 to INR 29 crore in FY26, and headcount increased from 425 to 470.

The bigger concern is cash conversion. Working capital days expanded to 185 in FY26 from 68 in FY25. In the balance sheet, trade receivables rose to INR 254.6 crore at FY26 end from INR 107.4 crore in FY25. Management explained that one major order executed across Q3 and Q4 drove a large portion of receivables and that collections have started in Q1 FY27, with a substantial portion expected to be realized during the quarter.

The company also stated it provided supplier advances for procurement of material due to market conditions, adding to working capital deployment. Management reiterated its intent to turn operating cash flow positive in FY27 and guided that receivable days could normalize to roughly 120 to 150 days.

On leverage, Prostarm highlighted balance sheet improvement. Long-term debt reduced to INR 0.8 crore in FY26 from INR 3.4 crore in March 2025, and management stated the company is effectively net debt free. It also cited fixed deposits of over INR 102 crore as a liquidity buffer to manage near-term working capital.

Manufacturing expansion is the core strategic bet for FY27

The most important strategic project is the new 1.2 GWh BESS facility at Jhajjar, Haryana. The presentation states a capex allocation of INR 25 crore and commissioning expected by end of FY26. In the earnings call, management said the facility is nearing commissioning and is expected to be operational in Q1 FY27.

Management also gave utilization targets for the new plant. It expects 25% to 40% utilization in FY27 and said it is hopeful of reaching about 70% the following year. In Q&A, it also stated the facility could generate very high potential revenue because it is an assembling plant, not cell manufacturing.

The second expansion is a new UPS facility at Bakrol, Gujarat. The presentation indicates it will become operational in Q2 FY27. In the call, management said the commissioning timeline slipped from Q1 FY27 to Q2 FY27 due to supply chain disruptions. The facility is intended to strengthen UPS manufacturing capabilities and increase value addition through more SKD assembly.

Alongside capex, the company is also investing in systems and talent. Management said SAP Business One and Salesforce implementations are progressing and should improve internal controls, operational efficiency, and customer relationship management.

Key takeaways

Prostarm’s FY26 performance has two clear interpretations. On the income statement, profitability held up, with PAT growing faster than revenue. On the balance sheet, the working capital build was sharp, and the Q4 execution delay exposed the operating sensitivity to supply chain and project timing.

The company enters FY27 with a large disclosed order book and explicit margin guidance of 12% to 13% EBITDA and 8.5% to 9.5% PAT. It has also guided minimum 25% growth for FY27, anchored by deferred Q4 execution and the expected ramp-up of BESS-related activity. The real test will be whether working capital normalizes as collections catch up and whether the Jhajjar and Gujarat facilities ramp on schedule.