💰 Financial Performance

Revenue Growth by Segment

Total income for H1 FY26 grew by 35% YoY to INR 62.79 Cr compared to INR 46.48 Cr in H1 FY25. Revenue from operations for FY25 was INR 131.03 Cr, representing a 23.5% increase from INR 106.06 Cr in FY24, driven by core HVAC project execution.

Geographic Revenue Split

The company operates in domestic and international markets, including emerging markets. While specific % splits are not disclosed, management highlighted meaningful participation in international tenders and expansion in global markets to support sustained growth.

Profitability Margins

Net profit for H1 FY26 stood at INR 4.94 Cr, a 29% YoY growth. For FY25, the net profit margin was 8.4% (INR 11.04 Cr profit on INR 131.42 Cr total income), improving from 7.9% in FY24. Margins are influenced by the specific stage of project execution.

EBITDA Margin

EBITDA for H1 FY26 was INR 8.53 Cr, reflecting a 19% YoY growth from INR 7.15 Cr. The EBITDA margin for H1 FY26 was approximately 13.58%, showing stable core profitability despite a dynamic operating environment.

Capital Expenditure

The company raised INR 33.53 Cr through an IPO in October 2024 (7,32,000 shares at INR 458 each). These funds are being utilized for disclosed purposes including scaling operations and potentially supporting the acquisition of Krew Instruments.

Credit Rating & Borrowing

Finance costs for H1 FY26 were INR 1.26 Cr. For FY25, finance costs were INR 2.47 Cr, up 56.7% from INR 1.58 Cr in FY24. Long-term borrowing proceeds in FY25 were INR 2.38 Cr, while repayments were INR 2.70 Cr.

⚙️ Operational Drivers

Raw Materials

Key materials include Air Handling Units (AHUs), ducting, and insulation materials. Cost of materials and services consumed represented 60.4% of total revenue in FY25 (INR 79.17 Cr).

Import Sources

Not specifically disclosed, though the company operates in international markets and participates in global tenders, suggesting a global supply chain for specialized HVAC components.

Capacity Expansion

HVAX is expanding its presence into the semiconductor and healthcare infrastructure sectors. The company is moving toward larger domestic and international tenders to participate in the modernization of healthcare infrastructure.

Raw Material Costs

Cost of materials and services consumed for H1 FY26 was INR 36.79 Cr. In FY25, these costs were INR 79.17 Cr, a 17.2% increase from INR 67.53 Cr in FY24, tracking revenue growth.

Manufacturing Efficiency

Management emphasizes operational excellence and efficient operations, which led to a 19% growth in EBITDA despite margin fluctuations based on project stages.

📈 Strategic Growth

Expected Growth Rate

35%

Growth Strategy

Growth is targeted through diversification into semiconductors and healthcare, acquisition of Krew Instruments to enhance technical capabilities, and participating in larger international tenders. The strategy focuses on 'discipline binding' and project selectivity to ensure profitable scaling.

Products & Services

HVAC (Heating, Ventilation & Air Conditioning) projects, Air Handling Units, ducting, insulation, cleanroom solutions, and specialized instruments via Krew Instruments.

Brand Portfolio

HVAX, Krew Instruments.

New Products/Services

Expansion into semiconductor cleanroom solutions and integrated project capabilities for rapid healthcare infrastructure modernization.

Market Expansion

Targeting emerging markets and global tenders in the pharmaceutical and healthcare sectors.

Strategic Alliances

Acquisition of Krew Instruments; related party transactions noted with HVAX Engineering and PNX Enterprises LLP (INR 3.24 Cr for professional fees).

🌍 External Factors

Industry Trends

Rapid modernization of healthcare infrastructure and growth in the semiconductor industry are key tailwinds. The industry is shifting toward high-efficiency, integrated project solutions.

Competitive Landscape

Competes with specialized engineering and HVAC firms in the domestic and international tender space.

Competitive Moat

Moat is built on deep technical expertise in HVAC for highly regulated sectors (Pharma/Semiconductors) and end-to-end compliant solutions, which are difficult for general contractors to replicate.

Macro Economic Sensitivity

Highly sensitive to healthcare infrastructure spending and pharmaceutical CAPEX cycles in India and emerging markets.

Consumer Behavior

Shift toward demand for high-efficiency and compliant cleanroom environments in the pharmaceutical and semiconductor manufacturing sectors.

Geopolitical Risks

Participation in international tenders exposes the company to trade barriers and regulatory shifts in emerging markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with stringent HVAC and cleanroom standards for pharmaceutical and semiconductor manufacturing; the company emphasizes 'compliant' solutions as a core value.

Environmental Compliance

Not specifically disclosed in INR values.

Taxation Policy Impact

The company reported a net profit before tax of INR 6.61 Cr for the period ended September 30, 2025.

Legal Contingencies

The company has fully spent required CSR amounts; no specific pending court case values were disclosed in the provided financial notes.

⚠️ Risk Analysis

Key Uncertainties

Project execution risks and margin volatility based on project stages; trade receivables are high at INR 54.15 Cr (approx. 86% of H1 revenue), indicating potential credit risk or long collection cycles.

Geographic Concentration Risk

Significant focus on India and emerging markets; expansion into global markets is intended to reduce domestic concentration.

Third Party Dependencies

Dependency on specialized component suppliers for AHUs and ducting materials.

Technology Obsolescence Risk

Risk is mitigated by the acquisition of Krew Instruments and focus on high-efficiency, modern HVAC solutions.

Credit & Counterparty Risk

Trade receivables of INR 54.15 Cr as of Sept 2025, down from INR 71.44 Cr in March 2025, showing some improvement in collection but remaining a significant portion of current assets.