💰 Financial Performance

Revenue Growth by Segment

Turnkey engineering solutions for life sciences grew 43.7% in FY25 to INR 322.47 Cr. Approximately 30% of revenue is derived from in-house manufactured products (Process, Air, and Water systems), while 70% comes from integrated project management and third-party equipment supply.

Geographic Revenue Split

The company operates in 62 countries with a strong presence in 22 active markets. Key growth regions include MENA (Middle East and North Africa), GCC, and ECO Zone, which are driving revenue through increased investments in local pharmaceutical self-reliance.

Profitability Margins

PAT margins improved from 12.03% in FY24 to 15.48% in FY25. However, operating margins saw a decline from 16.23% in FY24 to 12.73% in FY25 due to project mix and cost structures. H1 FY26 Net Profit stood at INR 21.98 Cr, a 101.6% YoY increase.

EBITDA Margin

EBITDA margin for H1 FY26 was 14.7%, reflecting a significant improvement from the 12.73% reported in FY25. The company targets a sustainable annual EBITDA range of 12-15% despite quarterly lumpiness in project execution.

Capital Expenditure

Fabtech follows an asset-light model and is not capital-intensive. The company successfully raised INR 230 Cr through an IPO fresh issue in October 2025, primarily to fund working capital requirements and business expansion rather than heavy manufacturing assets.

Credit Rating & Borrowing

Crisil reaffirmed ratings at 'Crisil BBB+/Stable' for long-term and 'Crisil A2' for short-term facilities. Working capital utilization averaged 70% over the 7 months ended June 2025, with an adjusted debt-to-networth ratio of 0.39x as of March 2025.

⚙️ Operational Drivers

Raw Materials

Key raw materials include stainless steel, specialized components for HVAC systems, and water purification filters. Raw material costs (Cost of Material) accounted for 54.1% of total income in FY25, amounting to INR 181.86 Cr.

Import Sources

Not explicitly disclosed, but the company operates in 62 countries and sources components globally to support its international turnkey projects in regions like MENA and GCC.

Capacity Expansion

The company operates an asset-light model where revenue is driven by project engineering and design. Management stated they can double revenue (X to X+Y) with the same core team by increasing procurement and engineering oversight without significant gross block expansion.

Raw Material Costs

Cost of materials increased from INR 121.51 Cr in FY24 to INR 181.86 Cr in FY25, representing a 49.6% increase. Procurement is managed through a 'single window' model to ensure speed and compliance for pharmaceutical clients.

Manufacturing Efficiency

The company maintains ISO-certified operations with a team of 180+ members, including 94+ qualified engineers, focusing on 'execution excellence' to maintain a 9% quarterly growth trajectory.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be achieved by leveraging the INR 904.42 Cr order book (as of July 2025), expanding the 'single window' turnkey model in emerging pharmaceutical markets, and focusing on nations seeking 'medicinal independence' through local manufacturing capacity.

Products & Services

Turnkey pharmaceutical plants, Cleanrooms, HVAC systems, Water for Injection (WFI) systems, Pure Water distribution systems, and Precision Process equipment for biotech and healthcare.

Brand Portfolio

FABTECH, FABL International Technologies, FT Institutions, Fabtech Technologies LLC, FTS Cleanrooms Systems.

New Products/Services

The company is expanding into high-margin capex projects and integrated automation for life sciences, aiming for a 9% sequential growth in the project pipeline.

Market Expansion

Targeting deeper penetration in MENA, GCC, and ECO Zone regions where governments are subsidizing healthcare infrastructure to achieve self-reliance.

Strategic Alliances

The group consolidates operations with subsidiaries like FABL International and FTS Cleanrooms Systems to provide a unified global engineering service.

🌍 External Factors

Industry Trends

The industry is shifting toward 'local medicinal independence' in emerging markets. Global pharmaceutical engineering is growing as companies upgrade facilities to meet stringent USFDA and EU GMP compliance standards.

Competitive Landscape

Competes primarily with European engineering firms. Fabtech positions itself as a more cost-effective, integrated alternative with faster execution speeds.

Competitive Moat

Moat is built on a 3-decade legacy, in-house manufacturing of critical Air/Water/Process systems (30% of project value), and a 'single window' model that ensures faster regulatory compliance than Western competitors.

Macro Economic Sensitivity

Highly sensitive to pharmaceutical industry capex cycles and government healthcare spending in emerging markets.

Consumer Behavior

Increased demand for biotech and life sciences infrastructure following global health crises, driving a shift toward more complex, automated manufacturing facilities.

Geopolitical Risks

Exposure to volatile international markets; however, management mitigates this by diversifying across multiple regions so that if one market slows, others (like the ECO zone) can compensate.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with global pharmaceutical standards including USFDA, EU GMP, Saudi FDA, and UK MHRA. Failure to meet these standards would halt project handovers.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 23.1% (INR 13.98 Cr tax on INR 60.43 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Quarterly earnings volatility due to the 'lumpy' nature of project-based billing, which can see margins swing from 8% to 25% between quarters.

Geographic Concentration Risk

Significant revenue concentration in emerging markets (MENA/GCC), making the company vulnerable to regional geopolitical instability.

Third Party Dependencies

70% of turnkey project components are sourced from third-party vendors, creating risks related to quality control and supply chain delays.

Technology Obsolescence Risk

Risk of shifting to advanced biotech manufacturing processes; mitigated by in-house design and engineering teams focusing on precision process systems.

Credit & Counterparty Risk

High working capital intensity with a focus on debtor collection as a key rating sensitivity factor. Cash and bank balance stood at INR 35.19 Cr as of March 2025.