💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 13.29% YoY to INR 1,180.2 Cr in FY25. The EMS segment contributed 76.43% of total revenues (INR 902 Cr), while the non-EMS segment accounted for 23.57% (INR 278 Cr). In Q2 FY26, revenue reached INR 375 Cr, a 23% YoY increase driven by strong performance in appliances and fans.

Geographic Revenue Split

Domestic India remains the primary market. Exports to the USA have been stalled since August 2025 due to tariff uncertainties, which is expected to impact total revenue by approximately 3% (roughly INR 40 Cr) if the situation persists for 3-4 months.

Profitability Margins

Operating Profit Margin was 2.35% in FY25, a decline of 11.99% YoY from 2.67% in FY24. Net Profit Margin improved significantly by 86.55% to 2.48% in FY25. Gross margins in Q2 FY26 fell by 4% QoQ because the high-margin components business share dropped from 24% to 20% of the sales mix.

EBITDA Margin

Consolidated EBITDA margin stood at 4.4% in FY25 (INR 52.4 Cr), up from 3.9% in FY24. In Q2 FY26, EBITDA was INR 20.4 Cr compared to INR 11.3 Cr in the previous year, reflecting improved operational scale despite margin pressures in specific segments.

Capital Expenditure

The company has utilized IPO proceeds to retire entire term debt obligations. No major debt-funded capital expenditure is proposed for the medium term, with the company focusing on utilizing internal accruals and existing bank lines of INR 66 Cr for incremental working capital.

Credit Rating & Borrowing

CRISIL has assigned a 'Stable' outlook. Gearing is exceptionally low at 0.04x in FY25. Interest coverage ratio improved by 77.26% to 6.08x in FY25. Borrowing costs are minimal as the company has no term debt obligations to repay.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include electronic components, moulded plastics, and sheet metal. Components represent a critical cost driver, with the components business itself contributing 20-24% of turnover and acting as a more profitable vertical than finished products.

Import Sources

The company faces intense competition from low-cost imports, specifically from China, which impacts the pricing and sourcing strategy for electronic components and LED lighting products.

Capacity Expansion

Current power capacity is supported by a new 4MWh power purchase agreement. Planned expansion includes the launch of new product lines for Oven Toaster Grill (OTG) and Oil Filled Radiators (OFR) scheduled for the second half of fiscal 2026.

Raw Material Costs

Raw material price fluctuations accentuate pressure on profitability as the company often faces an inability to pass on cost increases to customers. Operating margins are expected to improve to 6-7% in the medium term through backward integration and better fixed-cost absorption.

Manufacturing Efficiency

Inventory turnover ratio improved by 11.44% to 7.34x in FY25. However, RoCE has been lower than the 10-12% target due to a slow ramp-up of new products and under-absorption of fixed overheads like employee costs.

📈 Strategic Growth

Expected Growth Rate

15-18%

Growth Strategy

Growth will be driven by a 15% revenue guidance for FY26 (targeting INR 1,350 Cr), supported by new product launches in the home appliances and fan segments. The company is also expanding into high-value niche markets like medical cartridge manufacturing and BLDC motors through revised agreements with Philips India and Bajaj Electricals.

Products & Services

LED lighting, fans, fractional horsepower motors, trimmers, BLDC motors, Oven Toaster Grills (OTG), Oil Filled Radiators (OFR), medical diagnostic cartridges, and moulded/sheet metal components.

Brand Portfolio

Elin (The company primarily operates as an EMS provider for brands like Signify/Philips, Bajaj Electricals, and others).

New Products/Services

Launch of OTG and OFR product lines in H2 FY26; expansion into medical cartridges for personalized diagnostics to provide a differentiated revenue stream.

Market Expansion

Targeting export markets and expanding the domestic customer base in the lighting segment, where four new customers were recently added to reduce reliance on Signify.

Strategic Alliances

Revised supply agreements with Philips India and Bajaj Electricals for trimmers and BLDC motors to ensure long-term revenue visibility.

🌍 External Factors

Industry Trends

The EMS industry is growing but faces stagnant revenue in LED lighting due to price softening. Future direction involves a shift toward energy-efficient BLDC motors and specialized medical electronics.

Competitive Landscape

Intense competition from both organized and unorganized players, as well as low-cost Chinese products, which pressures operating margins.

Competitive Moat

Moat is based on a 40-year manufacturing legacy and vertical integration (moulded components). Sustainability depends on the ability to scale new product categories like medical cartridges and maintain a low-cost manufacturing base.

Macro Economic Sensitivity

Sensitive to macroeconomic conditions in India and globally, particularly fluctuations in consumer demand for small appliances and electronics.

Consumer Behavior

Demand is seasonal, with significant spikes during festive periods like Diwali, which advanced sales into Q2 FY26.

Geopolitical Risks

USA-China trade tensions and tariff situations impact export volumes. The stall in USA exports since August 2025 highlights the vulnerability to international regulatory shifts.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to evolving electronics manufacturing standards and international trade regulations (e.g., USA tariffs). The company maintains a robust compliance framework to mitigate regulatory risks.

Taxation Policy Impact

Provision for current tax was INR 69.05 Million in FY25 on a consolidated basis.

Legal Contingencies

The company reports no material weaknesses or significant deficiencies in internal financial controls as tested by internal auditors.

⚠️ Risk Analysis

Key Uncertainties

Tariff uncertainty for USA exports (3% revenue impact) and potential cyclical downturns in the electronics sector.

Geographic Concentration Risk

High concentration in the Indian domestic market; export diversification is currently hindered by geopolitical/tariff issues.

Third Party Dependencies

Significant dependency on major clients like Signify and Bajaj Electricals for volume; loss of such clients would materially impact revenue.

Technology Obsolescence Risk

Rapid technological changes in electronics require continuous R&D and product innovation to prevent obsolescence.

Credit & Counterparty Risk

Debtors' turnover ratio is 5.54x, reflecting stable receivables management. Net worth is expected to grow to INR 550-570 Cr by March 2026, supporting financial resilience.