Quality Power Forecasts Robust Growth Ahead

Ashwin Thakker

— 2 min read
  • FY26 Revenue Guidance: INR 700-800 crores, with an additional INR 500 crores in orders expected by year-end.
  • Consolidated EBITDA Margin Guidance: Projected at high teens (17-20%) for FY26.
  • Mehru's Revenue Growth: Anticipated 20-30% increase next quarter, targeting mid-teens margins (approx. 15%) within four quarters. Its maximum annual capacity is INR 450-500 crores.
  • New Sangli Coil Factory: Expected to generate peak revenue of INR 1,500-2,000 crores annually upon full operation.
  • Current Order Backlog: INR 775 crores, with a 12-15 month execution timeline.
  • HVDC/FACTS Market: Projected 60-70% industry growth over the next 3-5 years, with demand for 400kV and above persisting for a decade.

Quality Power Electrical Equipments Limited, a leader in high voltage electrical equipment, reported robust Q1 FY26 results, more than doubling consolidated revenue year-over-year. This strong performance sets the stage for an optimistic forward outlook, driven by strategic capacity expansions, targeted acquisitions, and a structural surge in demand across global power grids, promising sustained growth and profitability.

Capacity Expansion Fuels Future Revenue

Quality Power is aggressively expanding its manufacturing capabilities to meet escalating market demand. Facilities like Mehru are operating at nearly 95% capacity, prompting new oven additions and forecasting a “20% to 30% in the next quarter” revenue boost. The new Sangli global coil factory is a key long-term asset, expected to deliver substantial peak revenue. These expansions are vital for converting the robust INR775 crore order backlog, which has an execution timeline of 12-15 months, and positioning the company for sustained leadership in a supply-driven industry.

Robust Margins and Strategic Market Position

Quality Power maintains strong profitability targets for FY26, with consolidated EBITDA margins projected at “high teens between 17% and 20%.” While core coil products show 34% margins, newer acquisitions like Mehru (9.5%) are targeted to reach mid-teens margins within four quarters as synergies play out. The company benefits from its unique position as a key supplier for complex HVDC and FACTS projects, where a structural “60% to 70% growth” is anticipated over the next 3-5 years, reinforcing its competitive advantage in a high-demand market.

Quality Power's Q1 FY26 earnings call highlighted a clear path for sustained growth, fueled by aggressive capacity expansion and strategic acquisitions. The company's strong order book and leading position in high-growth HVDC/FACTS segments underpin its confident revenue and margin guidance. With a clear execution plan, Quality Power is well-positioned to capitalize on the enduring global demand for advanced power solutions.

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