United Heat Transfer: H2 FY26 Execution Upswing and the FY27 Expansion Plan

United Heat Transfer Limited: H2 FY26 execution surge sets up an FY27 capacity and data center cooling push

United Heat Transfer Limited closed H2 FY26 with a clear step-up in execution. Revenue from operations rose to INR 514.4 million in H2 FY26, up 33.9% year on year. Operating performance improved even as the company flagged higher raw material and procurement costs linked to global conflicts and supply chain disruptions. EBITDA increased 61.1% year on year to INR 79.0 million, and the EBITDA margin expanded to 15.4% from 12.8% in H2 FY25. Reported net profit climbed to INR 41.7 million, translating into a net margin of 8.1%.

For the full year, FY26 revenue from operations stood at INR 728.8 million. EBITDA was INR 104.6 million, and reported net profit was INR 50.1 million. The annual EBITDA margin moderated to 14.4% versus 17.0% in FY25, suggesting that the year’s performance was uneven, but the second half delivered strong momentum.

A business model built on both recurring OEM supplies and bespoke projects

United Heat Transfer manufactures shell and tube heat exchangers, air-cooled heat exchangers, pressure vessels and process flow skids. The company positions itself as an end-to-end player from design to delivery, with compliance across multiple global standards including TEMA and ASME codes.

In terms of business mix, the company disclosed a revenue share of 35% from OEM, 23% from Auto OEM, and 42% from Project and EPC work. OEM and Auto OEM supplies are described as standard heat transfer equipment with schedule-based supply, supporting recurring volumes. Project and EPC orders are made-to-order solutions where margins are influenced by complexity, design expertise and timely execution.

Financial snapshot: H2 surge, but FY26 margins lower than FY25

The company’s H2 FY26 numbers show a sharp improvement versus both the prior year period and the first half of FY26. H2 FY26 revenue nearly doubled sequentially from H1 FY26 levels, while margins expanded meaningfully.

One operational metric the company highlighted was working capital days. It disclosed that working capital days improved to about 182 days in FY26 from about 256 days in FY25. While this indicates progress, the absolute level still points to a working-capital-intensive model.

The balance sheet also shows a low year-end cash position, with cash and cash equivalents at INR 0.4 million in FY26. Short-term borrowings were INR 160.2 million in FY26, higher than INR 114.9 million in FY25, while long-term borrowings declined to INR 28.8 million from INR 63.4 million.

Capacity expansion and cycle time reduction are the core execution levers

A key operational priority is the Talegaon expansion. The company has Manufacturing Unit 2 at Talegaon, Dindori, Nashik, and notes that a new building of about 50,000 square feet is under construction and expected to be operational by Q3 FY27. This project is framed as a throughput and efficiency initiative, with the company targeting a reduction in product delivery cycle to 8 to 10 weeks from the current 14 to 16 weeks.

Alongside the physical expansion, the presentation outlines a push on manufacturing productivity with a targeted overall equipment effectiveness above 85%. The company also lists infrastructure and technology upgrades, including additional cranes and material handling equipment, an increased building height of 11 meters, a CNC rolling machine, and automatic or semi-automatic TIG welding setups. It also cites installation of ETP and STP plants as part of sustainable manufacturing practices.

Data center cooling entry with Vertiv adds a new demand driver

Beyond capacity, the most visible strategic move is the company’s entry into data center cooling solutions. United Heat Transfer states it is focusing on establishing presence in the data center infrastructure segment through the development of Cooling Distribution Units. It also discloses that Vertiv has been added as a new customer for CDU solutions, with the first commercial supply targeted by 30 June 2026.

If executed as planned, this initiative positions the company in advanced thermal management solutions for high-performance infrastructure. The presentation does not quantify the potential revenue contribution, but it does provide a dated commercial milestone, which makes future tracking more objective.

Order book movement and customer additions indicate pipeline expansion

The company disclosed its unexecuted order book at two points in time. It stood at INR 225.0 million as on 31 March 2026 and increased to INR 341.52 million as on 28 May 2026. It also reported that it added 57 new customers during H2 FY26, including 41 domestic and 16 international customers.

FY27 aims: growth, exports, and operating discipline

In the Way Forward section, United Heat Transfer stated an aim for 30 to 35% revenue growth in FY27. It also highlighted a focus on increasing exports by strengthening recurring export business, and referenced expansion across the USA, Europe, Africa and Asia as initial growth markets.

The next phase for the company will likely be judged on two execution outcomes. First, whether the Talegaon expansion and process upgrades translate into shorter delivery cycles and sustained margins. Second, whether the data center CDU entry moves from a first supply milestone to repeat orders.

The H2 FY26 performance shows that execution can scale meaningfully when the order cycle moves in the company’s favour. The FY27 narrative is now tied to measurable targets such as commissioning by Q3 FY27, OEE above 85%, and delivery cycle reduction. Investors will be watching whether these operational commitments translate into steadier full-year margins and healthier cash generation.