Salzer Electronics Charts Future Growth

Ashwin Thakker

— 2 min read
  • Sales Outlook (FY26): Salzer Electronics aims for INR 1,600 crore in total revenue, including an anticipated INR 300-400 crore from smart meters. Core business is projected to grow 18-22%.
  • Margin Outlook (FY26): Company-level EBITDA margin is expected to remain around 10% and may increase by 0.5% in the near term. Smart meter and EV charger segments target 12-13% EBITDA margins at scale.

Salzer Electronics reported a robust 25% year-over-year revenue increase, reaching INR 432 crore in Q1 FY26. The company’s recent earnings call provided clear strategic insights into its forward-looking guidance, detailing revenue projections and margin expectations across its key business segments, including smart meters, electric vehicle (EV) chargers, and its established industrial electrical components.

The company provided an updated outlook for its smart meter business, adjusting previous revenue estimates. While INR 2.2 crore was executed in Q1 FY26 from an INR 50 crore order, the balance is expected to be cleared in Q2. Management noted industry-wide field challenges impacting deployment speed.

“We revised our revenue estimates for FY26, which has drawn a lot of criticism in the market. We want to emphasize that this is not a reflection of our execution capabilities or market position,” stated Mr. Rajesh Doraiswamy, Joint Managing Director.

Despite short-term hurdles, Salzer anticipates another INR 50 crore smart meter order soon and maintains confidence in substantial long-term growth for this product. In the EV charger segment, Salzer sold approximately 50 chargers in Q1 FY26 and targets selling 1,000 DC chargers for the full year, with EBITDA margins expected to reach 12-13% at scale (60-70 chargers/month). The value per DC charger ranges from INR 6 lakh to 13 lakh, reflecting high-value product focus.

Core Business Strength and Strategic Diversification

Salzer’s core industrial switchgear and wires and cables businesses demonstrated strong performance, growing 31% and 17% year-over-year respectively in Q1 FY26. This momentum is expected to continue, with the core business projected to grow 18-22% in the next three quarters. The company also announced a new temperature sensor for the automotive industry, with commercial supplies anticipated from Q4 FY26, diversifying revenue streams into HVAC, home appliance, and medical equipment sectors.

Regarding profitability, the company-level EBITDA margin stood at 10% in Q1 FY26. Management expects this to continue and potentially increase by another 0.5 percentage point. While US tariffs could impact 5% of direct exports, and potentially another 5% indirectly, Salzer believes its diversified market presence and robust domestic demand will mitigate the overall effect. On debt, the company aims to restrict working capital debt to 20-25% of revenue, ensuring sustainable growth without drastic reductions in the near term.

Salzer Electronics strategically navigates market dynamics, leveraging core strengths and expanding into high-growth segments like smart meters and EV chargers. Despite short-term adjustments in smart meter projections, the long-term vision remains clear. Supported by new product initiatives and a commitment to healthy margins, Salzer is positioned for continued profitable growth, reinforcing its dedication to delivering value to all stakeholders.

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