Prostarm Info Systems: Powering Ahead with Strategic Expansion and Robust Growth in Q3 FY26

Prostarm Info Systems Limited, a prominent player in India's power electronics and energy storage sector, has delivered a strong performance in the third quarter and nine months ended December 31, 2025. The company reported a significant surge in its operating revenue and profitability, driven by robust execution of large orders and strategic initiatives. This period marks a pivotal phase for Prostarm as it solidifies its position in the rapidly evolving energy landscape, particularly with its aggressive expansion into Battery Energy Storage Systems (BESS) manufacturing.

For Q3 FY26, Prostarm's operating revenue soared to INR 160.5 Crore, marking an impressive 110.1% year-on-year growth and a 143.6% sequential increase. The EBITDA for the quarter stood at INR 20.3 Crore, reflecting an 81.3% year-on-year growth, with an EBITDA margin of 12.65%. Profit After Tax (PAT) also saw a substantial rise of 101.4% year-on-year, reaching INR 14.9 Crore, with a PAT margin of 9.28%. For the nine-month period (9M FY26), the operating revenue reached INR 281.3 Crore, a 4.7% increase year-on-year, while PAT grew by 13.1% to INR 25 Crore, with a PAT margin of 8.89%. This performance underscores the company's operational efficiency and its ability to capitalize on market opportunities.

Strategic Thrust: BESS and Manufacturing Expansion

Prostarm's strategic vision is clearly focused on high-growth segments, particularly Battery Energy Storage Systems. The company is establishing a 1.2 GWh annual capacity BESS facility in Reliance MET, Jhajjar, Haryana, with commissioning expected by the end of FY26. This INR 25 Crore capital expenditure project is a significant forward integration, positioning Prostarm as one of India's few OEMs in BESS manufacturing. Management anticipates this facility to achieve 40-50% capacity utilization in the next financial year, with a revenue potential of INR 1000-1200 Crore at full utilization. This move is crucial for meeting the increasing demand for advanced energy storage solutions in India, driven by renewable energy integration and grid stability requirements.

In addition to BESS, Prostarm is expanding its UPS manufacturing capabilities with a new facility in Bakrol, Ahmedabad, Gujarat. This INR 6 Crore investment aims to diversify the product portfolio and strengthen the company's presence in the power backup segment. Expected to be operational by Q1 FY27, this plant will focus exclusively on UPS systems ranging from 1 kVA to 600 kVA, significantly reducing the company's dependence on imports from China. The Pune facility, meanwhile, will pivot to customized solutions and BESS electronics, optimizing the overall manufacturing footprint.

Diversified Revenue Streams and Operational Excellence

Prostarm's business model is built on diversified revenue streams, including Manufactured Power Solution Products (33% of 9M FY26 revenue), End User Computing (43%), Third Party Power Solution Products & Other Products (23%), and Value-Added Services (1%). The company's ability to offer end-to-end IT hardware solutions, including UPS integration, installation, and maintenance, has been a key growth driver, exemplified by a major End User Computing order under the CCTNS project in Q3 FY26. This integrated approach ensures comprehensive solutions for a wide range of customers, from government departments and PSUs to healthcare and industrial enterprises across India.

Operational excellence is further enhanced by the implementation of SAP B1 and Salesforce systems, aimed at strengthening internal controls, improving efficiency, and enhancing customer relationship management. The introduction of QR codes on products is another step towards improving traceability, service responsiveness, and customer satisfaction. These initiatives reflect Prostarm's commitment to leveraging technology for operational superiority and customer-centricity.

Financial Health and Future Outlook

Prostarm's financial health has significantly improved, with the company becoming effectively net debt-free in 9M FY26, as long-term debt reduced from INR 3.4 Crore in March 2025 to INR 1.5 Crore. This robust capital structure provides the necessary flexibility to fund its ambitious expansion plans. The company also achieved a significant regulatory win with the closure of a customs matter, eliminating a long-standing regulatory overhang.

Looking ahead, management is optimistic, guiding for a 20-25% growth in its base business for FY26, with an additional INR 40 Crore expected from BESS projects in Q4 FY26. The EBITDA margin is projected to remain in the 12-15% range, with the BESS segment specifically targeting a conservative 14-15% margin. While the company experienced negative operating cash flow in the current period due to project execution, it expects to turn cash flow positive from Q3 FY27, driven by consistent revenue generation and improved realization. Prostarm's proactive approach to anticipating sector trends, technological shifts, and regulatory changes, such as the 'Make in India' policy for BESS tenders, positions it as a thought leader in the power electronics domain. The company's focus on adding five to eight new verticals, each capable of generating substantial revenue, underscores its commitment to sustainable long-term growth and market leadership.