💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 15.44% YoY to INR 1,312.58 Cr in FY25. For Q2 FY26, revenue was INR 371 Cr, up 16% YoY. Segmental revenue contribution for Q2 FY26: Industrial Gas (57%), LNG (25%), and Cryo Scientific (13%). The order backlog of INR 1,485 Cr provides strong visibility, with Industrial Gas making up 45%, LNG 31%, and CSD 23% of the total backlog.

Geographic Revenue Split

The company significantly expanded its global footprint, with export revenue contribution increasing from 50% in FY24 to 64% in FY25. As of Q2 FY26, the order backlog remains export-heavy at 63%, while the domestic market accounts for 37%. This shift reduces dependency on the Indian market and leverages global demand for cryogenic engineering.

Profitability Margins

Profitability remained stable despite growth; PAT margin was 17.22% in FY25 compared to 17.24% in FY24. Net Profit Margin for the consolidated entity was 16.5% in FY25. Gross margins saw a slight contraction of ~70 basis points in FY25, which was partially offset by operating leverage gains from increased scale.

EBITDA Margin

EBITDA margin stood at 24.4% for FY25, a slight improvement of 0.40% over the 24.0% recorded in FY24. Operating profitability margin remained steady at 22.29% in FY25 (vs 22.55% in FY24), reflecting the company's ability to maintain core profitability while scaling operations by 15.44%.

Capital Expenditure

The company plans a modest capital expenditure of approximately INR 80 Cr per annum starting from FY26. This capex is intended for regular maintenance and capacity expansion, specifically to be funded entirely through internal accruals and liquid surplus, maintaining a debt-free status.

Credit Rating & Borrowing

The company maintains a healthy financial risk profile with a CRISIL 'Stable' outlook. Debt was reduced to INR 43 Cr in March 2025 from a peak of INR 419 Cr in 2018. Interest coverage is exceptionally strong at 35.98x (Consolidated) to 40x (Credit Rating estimate), indicating very low default risk and high capacity to service minimal debt.

⚙️ Operational Drivers

Raw Materials

The company is sensitive to price volatility in essential input materials, primarily stainless steel and specialized alloys required for cryogenic tanks (representing a significant but unspecified % of total costs). Management is increasing the share of localized raw material procurement to mitigate global price fluctuations and logistics costs.

Import Sources

Not specifically disclosed in available documents, though the company mentions a strategic shift toward 'localized raw material procurement' within India to improve supply chain resilience.

Key Suppliers

Specific supplier names are not disclosed in the provided documents; however, the company utilizes a 'localized procurement' strategy to manage its supply chain for its four Indian manufacturing facilities.

Capacity Expansion

Current operations are centered across four principal manufacturing facilities (Kalol, Kandla, Bhachau, and Silvassa). Expansion is underway at the Savli plant for Cryo Tanks, with total planned capex of INR 80 Cr per year to support growth in the LNG and Industrial Gas segments.

Raw Material Costs

Raw material costs are a major component of the cost structure; gross margins contracted by ~70 basis points in FY25 due to input price shifts. The company uses localized sourcing to manage these costs and maintain an operating margin between 22-24%.

Manufacturing Efficiency

Inventory turnover ratio improved by 5.3% from 2.68 to 2.82 in FY25, indicating better asset utilization. The company leverages its four principal facilities to meet a 70-75% market share in the Indian cryogenic tank segment.

Logistics & Distribution

Not specifically disclosed as a % of revenue; however, the company exports to over 100 countries, making global logistics a critical component of its 64% export revenue stream.

📈 Strategic Growth

Expected Growth Rate

15-17%

Growth Strategy

Growth will be driven by the 'National Green Hydrogen Mission' and the transition to an LNG-based economy. The company is expanding into the beverage equipment market (breweries), targeting 100,000 to 150,000 units. Capacity expansion at the Savli plant and a record order backlog of INR 1,485 Cr provide the foundation for this sustained growth.

Products & Services

Cryogenic storage tanks, Industrial Gas solutions, LNG fuel systems for transport and power, Cryo-scientific equipment for research, and beverage application equipment (kegs/tanks for breweries).

Brand Portfolio

INOXCVA, INOX India Limited.

New Products/Services

Entry into the brewery equipment market (beverage application) with an expected initial capture of 100k-150k units. The company is also focusing on newer product applications in the Green Hydrogen sector.

Market Expansion

Expanding global presence (exports grew to 64% of revenue) and targeting the European and Brazilian markets through subsidiaries INOXCVA Europe B.V. and INOXCVA Brazil.

Market Share & Ranking

Market leader in India with a 70-75% market share in the cryogenic tank segment as of fiscal 2025.

Strategic Alliances

The company is part of the Pavan Jain faction of the Inox Group, benefiting from synergies with group companies in industrial gases and entertainment.

🌍 External Factors

Industry Trends

The industry is shifting toward cleaner fuels; the 'National Green Hydrogen Mission' and LNG as a transit fuel are primary drivers. The cryogenic equipment market is growing as industries move toward decarbonization, positioning INOX as a critical infrastructure provider.

Competitive Landscape

INOX is the largest manufacturer in India. Competitors include global engineering firms, but INOX's localized manufacturing and 70%+ market share provide a significant cost and service advantage.

Competitive Moat

The moat is built on a 70-75% dominant market share, high entry barriers due to complex cryogenic engineering standards, and being part of the established Inox Group. These advantages are sustainable due to the specialized nature of the technology and long-standing client relationships.

Macro Economic Sensitivity

Sensitive to India's GDP growth (projected 6.3% to 6.8%) and global energy transition investments. A slowdown in manufacturing activity would directly reduce demand for industrial gas storage.

Consumer Behavior

Shift toward ESG-compliant energy sources is increasing demand for the company's LNG and Hydrogen storage solutions.

Geopolitical Risks

Operations in over 100 countries expose the company to international trade barriers and regulatory changes in the cryogenic engineering sector.

⚖️ Regulatory & Governance

Industry Regulations

Subject to complex cryogenic safety standards, environmental regulations, and industry-specific compliance. The company uses an independent Internal Audit team reporting to the Audit Committee to ensure adherence.

Environmental Compliance

The company adheres to evolving environmental regulations and safety standards. Failure to comply could lead to 'elevated compliance costs' and 'production limitations,' though specific ESG spend in INR is not disclosed.

Taxation Policy Impact

The effective tax expense increased due to the removal of the Indexation benefit on Long Term Capital Gains (LTCG), resulting in a INR 2.4 Cr impact following India's Budget 2024.

Legal Contingencies

Not specifically disclosed in the provided text, although the company monitors 'regulatory changes' and 'statutory requirements' through its Board-level Audit Committee.

⚠️ Risk Analysis

Key Uncertainties

Manufacturing risk: Dependency on only 4 principal facilities means an industrial accident or equipment failure could significantly interrupt the 15% revenue growth trajectory. Input cost volatility also remains a key uncertainty for margin maintenance.

Geographic Concentration Risk

While domestic revenue is spread across India, 64% of revenue is now concentrated in international markets, exposing the company to global geopolitical and currency risks.

Third Party Dependencies

High dependency on a limited number of major clients (Top 10 = 47% of revenue), making the company vulnerable to the purchasing strategies of a few large entities.

Technology Obsolescence Risk

The company mitigates technology risk through its 'Cryo Scientific' division and by aligning with the global shift toward Hydrogen and LNG technologies.

Credit & Counterparty Risk

Receivables quality is monitored; Debtors' turnover ratio was not explicitly provided but the company noted higher finance costs due to fund utilization for plant expansion rather than credit losses.