SKIPPER - Skipper

📊 NSE: SKIPPER 🏢 Engineering 📅 Last Updated: 12/14/2025 13:29

💰 Financial Performance

Revenue Growth by Segment

The Engineering segment grew 57.7% YoY to INR 3,518.5 Cr in FY25. The Infrastructure segment grew 12.7% to INR 674.3 Cr. The Polymer segment saw a slight decline of 4.6% to INR 431.7 Cr in FY25, though it rebounded in H1 FY26 with 22% YoY growth to INR 242.5 Cr.

Geographic Revenue Split

Domestic operations dominate the mix, but exports are growing rapidly, increasing 27% YoY to INR 523.4 Cr in H1 FY26. Exports currently constitute approximately 11% of the total order book.

Profitability Margins

Operating margins improved from 9.77% in FY25 to 10.14% in Q1 FY26 and 10.3% in H1 FY26. Net profit margins increased from 2.28% in FY24 to 3.15% in FY25, reaching 3.56% in Q1 FY26 due to better operational efficiency and higher-margin export orders.

EBITDA Margin

Reported EBITDA grew 41.4% YoY to INR 451.7 Cr in FY25. Standalone EBITDA margins improved to 10.3% in H1 FY26 compared to 9.9% in the previous year, driven by operating leverage and execution of higher-quality T&D contracts.

Capital Expenditure

The company has announced a major capacity expansion to add 300,000 MTPA to its engineering division. It also successfully raised INR 200 Cr through a rights issue of 1.03 Cr shares at INR 194 per share to fund growth and strengthen the balance sheet.

Credit Rating & Borrowing

Crisil and Acuité maintain a Stable outlook. Finance costs as a percentage of sales improved to 4.2% in H1 FY26 from 4.8% YoY. The company utilizes approximately 63.75% of fund-based and 81.96% of non-fund-based bank limits.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Steel (for towers and poles) and PVC Resin (for polymer products). Steel and zinc for galvanization are critical for the Engineering segment, while resin prices directly impact Polymer segment value growth.

Import Sources

Not specifically disclosed, but the company operates under a 'China+1' narrative for exports, suggesting a shift in global supply chain positioning. Domestic sourcing is implied for major steel requirements.

Capacity Expansion

Current engineering capacity is 300,000 MTPA, with a planned expansion of 300,000 MTPA to reach a total of 600,000 MTPA. Polymer capacity is maintained at 62,000 MTPA.

Raw Material Costs

Raw material costs are managed through price escalation clauses in contracts. In the Polymer segment, falling resin prices caused a disconnect where volume growth did not fully translate to value growth in FY25.

Manufacturing Efficiency

Efficiency is driven by backward integration and economies of scale. Operating margins in Engineering are aided by being one of the world's largest manufacturers, allowing for volume-driven cost efficiencies.

Logistics & Distribution

The company is expanding its retail distribution network for the polymer business to improve market penetration and reduce logistics overhead per unit.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth will be achieved through a 300,000 MTPA capacity expansion in Engineering, increasing export penetration in developed markets (Power T&D and Telecom), and diversifying the polymer portfolio with new products like water tanks and bath fittings.

Products & Services

Transmission towers, poles, EPC services for power T&D, railway electrification, telecom towers, PVC pipes, CP bath fittings, and water storage tanks.

Brand Portfolio

Skipper, Marina (for bath fittings and tanks).

New Products/Services

Launched 'Marina' brand for CP bath fittings and water storage tanks; introduced 'India's Safest Pipes' campaign to increase market share in the plumbing segment.

Market Expansion

Targeting global markets under the China+1 theme, specifically increasing the export share of the order book from the current 11% to aid margin expansion.

Market Share & Ranking

India's largest manufacturer for transmission towers and poles; aims to be the world's largest within 3 years.

Strategic Alliances

Joint Venture with Skipper Metzer India LLP (50% stake). Partnerships with PLP (UK) and PLP Poland (Belos) S.A. expected by Q2FY26 to strengthen global supply.

🌍 External Factors

Industry Trends

The industry is shifting toward non-fossil and renewable energy, driving a multi-year growth runway for T&D infrastructure. Global 'China+1' sourcing strategies are benefiting Indian manufacturers.

Competitive Landscape

Faces intense competition from domestic and international players in T&D and polymer piping; competition often leads to aggressive pricing in tender-based bidding.

Competitive Moat

Moat is built on being a low-cost, backward-integrated producer with massive scale (300k MTPA expanding to 600k MTPA) and a strong reputation with major utilities like PGCIL.

Macro Economic Sensitivity

Highly sensitive to India's renewable energy goals and global T&D spending. A 40-60 revenue split between H1 and H2 is typical due to execution cycles.

Consumer Behavior

Increased demand for eco-conscious infrastructure is driving the company to publish Environmental Product Declarations (EPD) for its steel towers.

Geopolitical Risks

Exposure to international projects in new geographies poses execution and cash flow risks, though mitigated by strong risk management and USD-denominated contracts.

⚖️ Regulatory & Governance

Industry Regulations

Operations align with global ESG standards, GreenPro, and IS 14025 certifications. Products must meet stringent BIS and international quality standards for T&D.

Environmental Compliance

Eastern India’s first in its segment to publish an EPD for Hot Dip Galvanized steel towers; reduced carbon emissions by 3,000 MT CO2 equivalent.

Taxation Policy Impact

The company settled a legacy entry tax dispute under a government amnesty scheme, paying 75% of the disputed amount.

Legal Contingencies

Recognized a one-time exceptional item of INR 10.6 Cr in Q2 FY26 for the settlement of a legacy entry tax dispute to eliminate future contingencies.

⚠️ Risk Analysis

Key Uncertainties

Tender-based business nature means revenue visibility depends on winning new contracts. Project deferrals or slow execution due to macroeconomic factors could lead to cost overruns.