Rajesh Power FY26: Execution-led growth, a stronger order book, and a first step into BESS

Rajesh Power Services Limited closed FY26 with a sharp step-up in scale, helped by faster project execution and a steadily expanding opportunity set in India’s transmission and distribution build-out. For FY26, the company reported revenue from operations of INR 1,627.94 crore, EBITDA excluding other income of INR 197.16 crore, and profit after tax of INR 143.20 crore. The reported margins stayed healthy, with EBITDA margin at 12.11% and PAT margin at 8.80%.

The second half also remained strong. H2 FY26 revenue from operations was INR 990.12 crore and PAT was INR 84.42 crore. Management attributed the year’s performance to disciplined execution, a diversified order book, and cost control, while maintaining its commentary around project timelines of 18 to 24 months for most contracts.

FY26 performance in numbers

The FY26 results show a company that has moved from a much smaller base to a meaningfully scaled EPC platform. The investor presentation also highlights that the company adopted Ind-AS effective 1 April 2025, and FY25 numbers were presented on a consolidated basis due to HKRP Innovations’ conversion to a public company.

Return metrics in the deck remained elevated. Annualized ROCE was reported at 43.65% for FY26 and ROE at 35.26%. Leverage stayed moderate as per the company’s reported debt-to-equity ratio of 0.31 at FY26 end.

Order book visibility stays strong, with distribution at the core

A key support for revenue continuity is the order book. As of 31 March 2026, the company disclosed an unexecuted consolidated order book plus L1 of INR 3,326 crore, with distribution contributing 71% (INR 2,365 crore) and transmission contributing 29% (INR 961 crore). The company also reported FY26 order inflows of INR 2,743 crore.

Management commentary reinforced that Gujarat continues to dominate the order book today, stating that around 85% to 90% of the order book is from Gujarat, while the company plans to increase the outside-Gujarat contribution over time.

The call also provided near-term tender context: bids awaiting result were stated at INR 2,200 crore and a bid pipeline of INR 3,500 crore. Management indicated a historical win rate of around 40% and said it expects outcomes for the INR 2,200 crore of bids around end-May to early June, subject to tendering timelines.

Strategy: higher voltage GIS, grid technology, and entry into BESS

The FY26 communication leaned on three strategic tracks.

First is deepening transmission capabilities. The investor presentation states the company entered the 400 kV GIS segment with landmark orders of INR 278 crore. On the concall, management said a 400 kV GIS project in Gujarat is expected to be commissioned around September to October (year not specified in that statement), positioning the company to compete in a more specialized part of the substation market.

Second is reinforcing distribution execution in its home market. The presentation highlights turnkey orders worth INR 922 crore from UGVCL for converting 11 kV overhead networks into underground cable systems and installing 11 kV MVCC across multiple UGVCL circles. Management also shared operational outcomes based on DISCOM feedback, stating that MVCC and underground work has resulted in a 70% to 80% reduction in interruption duration, and cited the role of RMU-based sectionalization in faster restoration.

Third is new adjacency through utility-scale energy storage. The company disclosed a 65 MW/130 MWh Battery Energy Storage System project in Gujarat with GUVNL. The contract structure in the presentation specifies a 12-year Battery Energy Storage Purchase Agreement and a tariff of INR 1.89 lakh per MW per month. On the concall, management clarified that the company will develop and own the BESS infrastructure and bill the utility monthly after commissioning. Management stated a completion timeline of September 2027, with an attempt to execute earlier. For economics, management said it is targeting an IRR of 10% to 12% and that project costs depend on battery vendor selection.

Alongside BESS, the company also described technology enablement through HKRP Innovations, which it described as a group company/associate providing IoT and SCADA solutions. The presentation claims HKRP has centralized more than 1,500 distribution substations on a single SCADA platform under GETCO, and that the platform monitors and manages 30,000+ nodes and 10,000+ MW using Industrial IoT and cloud technologies.

What investors focused on: working capital and guidance

While the tone of management commentary remained confident, the Q&A concentrated on balance sheet movements. FY26 trade receivables increased to INR 348.77 crore and inventories to INR 124.95 crore, while trade payables rose to INR 328.32 crore and short-term borrowings to INR 81.59 crore.

Management attributed the receivable spike to high billing in March and stated there were no payment delays, with standard payment terms of 45 to 60 days. They also said around INR 150 crore had been received against the reported receivables figure.

On forward guidance, management was explicit and reiterated it was not revising its stance. It stated it is looking at 40% revenue growth for FY27 and expects to maintain EBITDA margin around 11% to 12% and PAT margin around 8% to 9%. For business development, management stated it is targeting INR 4,000 crore to INR 5,000 crore of order inflows in the year and a closing FY27 order book above INR 5,000 crore.

Closing takeaways

Rajesh Power’s FY26 narrative is built around execution. The company delivered a sharp increase in revenue and profit while sustaining double-digit EBITDA margins, and it ended the year with a disclosed order book plus L1 of INR 3,326 crore. Strategy-wise, it is stepping into higher voltage GIS, adding a technology layer through HKRP, and using its first BESS project to understand the storage ecosystem while targeting BESS EPC opportunities.

The next year’s progress will likely be judged on two measurable points that emerged clearly in the call: whether FY27 growth can track the stated 40% target while holding margins in the guided band, and whether working capital movements normalize after the year-end spike in receivables and borrowings.