Quality Power: Strategic Growth and Margin Expansion Ahead

Ashwin Thakker

— 2 min read

Key Facts

  • Sales Guidance FY26: INR 700-800 Crores (consolidated).
  • Consolidated Margin Guidance FY26: High teens (17-20% EBITDA).
  • Mehru Margin Target: Mid-teens (around 15%) within next four quarters, up from current 9.5%.
  • Mehru Sales Growth: Anticipated 20-30% increase in the next quarter.
  • Total Order Backlog: INR 775 Crores, with an execution timeline of 12-15 months.
  • New Sangli Factory Revenue Potential: INR 1,500-2,000 Crores at peak capacity.
  • HVDC Project Opportunity Size: Approximately INR 200 Crores per order.
  • Order Book Composition: Roughly 60% export, 40% domestic.

Introduction

Quality Power Electrical Equipments Limited recently held its Q1 FY26 earnings call, revealing a clear and confident outlook for the coming year. Following a period of strong performance, the company highlighted its strategic initiatives focused on boosting revenue, enhancing profitability, and expanding its operational footprint. Investors received detailed guidance on sales targets, ambitious margin improvements across its diverse product lines, and progress on key capacity expansion projects. This forward-looking commentary positions Quality Power for sustained growth in a high-demand market.

Bolstering Sales and Expanding Capacity

Quality Power anticipates consolidated sales of INR 700-800 Crores for FY26. Mehru is a key growth driver, projected to achieve 20-30% sales increase next quarter, with its factory scaling to INR 450-500 Crores annual capacity. The new Sangli global coil factory promises substantial future revenue, targeting INR 1,500-2,000 Crores at peak. Management noted the new site is "slightly ahead of schedule," indicating robust capacity expansion. A strong INR 775 Crores order backlog offers clear visibility, with execution expected within 12-15 months.

Driving Profitability and Market Leadership

Quality Power targets "high teens" (17-20%) consolidated EBITDA margins for FY26. Mehru’s EBITDA is set to improve from 9.5% to "mid-teens" (around 15%) within four quarters through synergy realization. Emphasis on high-profit segments is clear, with coil products maintaining a robust 34% EBITDA. Strategic investments earned Quality Power approval as a supplier for advanced HVDC and STATCOM products to global leaders. The Sukrut Electric joint venture expands market access, solidifying the company's competitive position and commitment to enhanced profitability.

Conclusion

Quality Power's Q1 FY26 earnings call revealed a confident outlook. Driven by strong demand and strategic execution, the company actively expands production and integrates acquisitions. With clear revenue and margin growth targets, Quality Power leverages technological advancements and global approvals. These steps underscore its commitment to sustained financial performance and long-term value in the dynamic electrical equipment sector.

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