NIBE - NIBE

📊 NSE: NIBE 🏢 Engineering 📅 Last Updated: 12/14/2025 10:31

💰 Financial Performance

Revenue Growth by Segment

The Defence segment revenue grew 81.02% QoQ from INR 81.53 Cr in Q1 FY26 to INR 147.58 Cr in Q2 FY26. The Aeronautics segment, introduced in June 2025, saw revenue surge 751.82% QoQ from INR 0.97 Cr to INR 8.29 Cr in the same period.

Geographic Revenue Split

Not disclosed in available documents; however, the company operates primarily out of Pune, Maharashtra, and maintains business ties with nations for export/import as indicated by forex risk disclosures.

Profitability Margins

Profitability saw a sharp decline in Q2 FY26; Standalone Net Profit margin dropped from a positive trajectory to a loss with an EPS of INR (3.44) for the quarter, compared to INR 12.81 for the half-year ended September 30, 2025. Consolidated PBT margin for Q2 FY26 was -7.29% (Loss of INR 11.36 Cr on revenue of INR 155.87 Cr).

EBITDA Margin

Historical EBITDA for Q2 2022-23 was INR 4.34 Cr (24.35% margin). Current EBITDA margins are under pressure due to segment losses in Aeronautics (INR 6.02 Cr loss) and Defence (INR 5.34 Cr loss) during Q2 FY26.

Capital Expenditure

The company invested INR 11.03 Cr in the purchase of property, plant, and equipment (including capital work in progress) during H1 FY26, compared to INR 29.99 Cr in the previous year's corresponding period.

Credit Rating & Borrowing

Not disclosed in available documents; however, the company identifies 'funding' and 'interest rate sensitivity' as key risks for its capital-intensive defence operations.

⚙️ Operational Drivers

Raw Materials

Not specifically named in documents, but identified as a pivotal factor where fluctuations significantly impact operations and margins.

Capacity Expansion

Not disclosed in available documents; however, the company recently expanded its operational scope by adding the Aeronautics segment in June 2025.

Raw Material Costs

Raw material costs are identified as a significant risk factor; the company manages this through a risk assessment and minimization system, though it does not currently engage in commodity hedging.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is driven by diversification into Aeronautics (launched Q1 FY26), the acquisition of a 48.95% stake in Nibe Meson Naval Limited to enter the fluid control equipment manufacturing industry, and a 10-year licensing agreement with DRDO to manufacture and sell Solar Heated Shelters.

Products & Services

Fabrication and machining of components for the defence sector; manufacturing, selling, and maintaining defense electronic systems (naval, land, air, space); Solar Heated Shelters; and fluid control equipment.

Brand Portfolio

Nibe Limited (formerly Kavita Fabrics Limited).

New Products/Services

Aeronautics electronic systems (naval, land, air, and space) and Solar Heated Shelters (DRDO technology).

Market Expansion

Expansion into the fluid control equipment manufacturing industry via the acquisition of Nibe Meson Naval Limited.

Strategic Alliances

10-year technology licensing agreement with DRDO for Solar Heated Shelters; acquisition of 48.95% equity in Nibe Meson Naval Limited.

🌍 External Factors

Industry Trends

The industry is shifting toward indigenous manufacturing (Atmanirbhar Bharat) in defence and aeronautics. Nibe is positioning itself by acquiring specialized technology (DRDO) and expanding into high-tech electronics and fluid control systems.

Competitive Landscape

Operates in a niche segment of Defence Supplies and Aeronautics; competition includes other specialized defence fabricators and electronic system manufacturers.

Competitive Moat

Moat is built on specialized fabrication capabilities for the defence sector and exclusive/non-exclusive technology licenses (like DRDO). These are sustainable due to high entry barriers in defence manufacturing and long-term (10-year) license periods.

Macro Economic Sensitivity

Highly sensitive to global inflation and macroeconomic conditions which persist as challenges to business growth.

Consumer Behavior

Not applicable as the company is B2B/B2G; demand is driven by government defence budgets and procurement cycles.

Geopolitical Risks

Operations are impacted by economic developments in India and nations with which the company maintains business ties, particularly relevant for defence exports/imports.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by Defence sector regulations, Ind AS 108 for segment reporting, and SEBI Listing Obligations for corporate governance.

Taxation Policy Impact

Current tax liabilities stood at INR 6.71 Cr as of September 30, 2025. The company follows Ind AS and Section 133 of the Companies Act, 2013.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility, global supply chain disruptions, and changes in government defence procurement policies pose significant risks to revenue and margins.

Geographic Concentration Risk

Manufacturing is concentrated in Pune, Maharashtra (MIDC Chakan).

Third Party Dependencies

Dependency on DRDO for licensed technology for Solar Heated Shelters.

Technology Obsolescence Risk

The company mitigates technology risk through licensing agreements with DRDO and expanding into the Aeronautics sector to stay current with defense electronic systems.