💰 Financial Performance

Revenue Growth by Segment

Consolidated total income grew 3% YoY to INR 1,725 crores in Q2 FY26, driven by standalone growth and Saraswati Sugar Mills. The project business holds an order book of INR 6,004 crores, while the manufacturing segment holds INR 2,785 crores. Eagle Press (Canada) saw a 36.3% revenue increase to INR 104.99 crores from INR 77.01 crores.

Geographic Revenue Split

Exports are a major driver, contributing 68% of total order bookings during FY25. The United States remains a primary market for the Eagle Press subsidiary, while the company maintains a presence in Canada, Mexico, and the Philippines (via CBPI assets).

Profitability Margins

Consolidated PBT from continuing operations increased 16% to INR 136 crores in Q2 FY26. Standalone OPM has shown a steady recovery from 4.0% in FY22 to 6.4% in FY23, reaching 7.6% in H1 FY24 and approximately 8.9% by 9M FY25 due to a higher mix of manufacturing and sugar/ethanol revenue.

EBITDA Margin

Consolidated OPBDIT/OI improved from 5.3% in FY22 to 7.1% in FY23 and reached 8.3% in H1 FY24. This 300 bps improvement over two years is attributed to the reduction of legacy low-margin fixed-price contracts and better pricing power in new orders.

Capital Expenditure

The company is investing INR 87 crores in a two-phase expansion at Dahej SEZ for skids and modules. Phase 1 involves INR 65 crores (expected revenue INR 160 crores) and Phase 2 involves INR 22 crores (incremental revenue to INR 275 crores).

Credit Rating & Borrowing

Maintains a 'Stable' outlook from ICRA. Total debt/OPBDIT improved significantly from 4.3x in FY22 to 2.0x in H1 FY24. Standalone net borrowings stood at INR 429 crores as of September 2025, up from INR 96 crores in March 2025 due to working capital needs.

⚙️ Operational Drivers

Raw Materials

Steel and various bought-out components constitute the primary raw material costs. These are critical as they represent a significant portion of the cost structure for heavy engineering and EPC projects.

Import Sources

Not specifically disclosed, though the company operates globally with subsidiaries in Canada (Eagle Press) and Singapore (ISGEC Investments Pte Ltd), suggesting global procurement for specialized components.

Capacity Expansion

Expanding manufacturing of skids and modules at Dahej SEZ to reach a total revenue potential of INR 275 crores upon completion of Phase 2. Eagle Press shops are currently expected to operate at full capacity due to strong order bookings.

Raw Material Costs

Raw material volatility poses a risk to the 18-24 month execution cycle of fixed-price EPC contracts. Profitability in FY22 was adversely hit when OPM dropped to 4.0% due to commodity price headwinds, but has since recovered as newer contracts factor in higher input prices.

Manufacturing Efficiency

Capacities at ISGEC Hitachi Zosen were fully utilized for most of FY25 except Q1. The company is focusing on 'sophisticated equipment' orders to drive higher value per man-hour.

Logistics & Distribution

The company faces risks from client-side delays; for instance, ISGEC Hitachi Zosen's profits were capped because clients deferred the dispatch of finished equipment due to site unreadiness.

📈 Strategic Growth

Expected Growth Rate

15-18%

Growth Strategy

Growth is targeted through the expansion into high-margin skids and modules (INR 275 Cr revenue potential), increasing export contributions (currently 68% of bookings), and leveraging JVs like ISGEC Hitachi Zosen. The company is also divesting non-core loss-making assets like Bioeq Energy to focus on core engineering.

Products & Services

Heavy engineering equipment, EPC turnkey services, boilers, pressurized vessels, sugar, ethanol, skids, modules, and automotive presses.

Brand Portfolio

ISGEC, Saraswati Sugar Mills, Eagle Press, ISGEC Hitachi Zosen, ISGEC Titan, ISGEC SFW Boilers.

New Products/Services

Expansion into skids and modules manufacturing at Dahej is expected to contribute INR 275 crores to annual revenue upon full completion.

Market Expansion

Targeting the Steel and Cement sectors for equipment orders. Expanding automotive industry presence in Canada, USA, and Mexico through Eagle Press.

Market Share & Ranking

Leading market position in several capital goods categories and a leading EPC player in India.

Strategic Alliances

Key JVs include Hitachi Zosen Corp (51% ISGEC), Sumitomo SHI FW (51% ISGEC), and Titan Metal Fabricators (51% ISGEC). Strategic partnerships exist with BabcockPower USA and Riley Power USA.

🌍 External Factors

Industry Trends

The industry is shifting toward cleaner fuels and renewable energy. ISGEC is positioning itself by increasing renewable energy use and providing equipment for 'comparatively clean fuel' transitions (RLNG).

Competitive Landscape

Faces intense competition from both domestic and international EPC players, which historically limited operating margins to the 4-8% range.

Competitive Moat

Moat is built on long-standing technology JVs with global leaders (Hitachi, Sumitomo) and a diversified order book of INR 8,789 crores, which provides revenue visibility for 18-24 months.

Macro Economic Sensitivity

Highly sensitive to industrial CapEx cycles in the Steel, Cement, and Power sectors. Domestic weakness in FY25 led to project deferrals.

Consumer Behavior

Industrial customers are increasingly deferring projects during periods of domestic economic uncertainty, as seen in the weak domestic market of FY25.

Geopolitical Risks

US Tariffs on Canada currently do not impact Eagle Press products, but remain a monitored risk as the USA is a main market.

⚖️ Regulatory & Governance

Industry Regulations

Sugar and ethanol business margins are highly vulnerable to changes in Government of India policies regarding pricing and blending mandates.

Environmental Compliance

Implementing STP cum ETP systems for waste water management and reusing scrap to promote a circular economy.

Legal Contingencies

The company was involved in arbitration with Cavite Biofuels Producers Inc (CBPI), leading to the acquisition of its assets in 2019; it is currently attempting to sell these assets after a buyer failed to make payments.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful divestment of discontinued operations (Bioeq), which currently drags down consolidated PAT (down 41.7% in Q2 FY26).

Geographic Concentration Risk

68% of new orders are from exports, creating high sensitivity to global trade conditions and international project execution risks.

Third Party Dependencies

Dependency on JV partners like Hitachi Zosen and Sumitomo for specialized technology and design engineering.

Technology Obsolescence Risk

Mitigated through continuous strategic technology partnerships with global engineering firms.

Credit & Counterparty Risk

Risk highlighted by the failure of the buyer for the Singapore/Cayman subsidiary to complete payments, impacting the company's liquidity and profit realization.