Sugs Lloyd Q1 FY27 Earnings Call — Analysis (BSE: 544501)

Sugs Lloyd posts record Q1 with 32% revenue growth, reiterates FY28 ₹1,000 Cr target and highlights accelerating traction in high-margin FPI products and new vertical entry into transmission and BESS.

3 Aug 2026 · Analysis by Alpha Inflection

The take

Q1FY27 Revenue from operations ₹78.40 Cr ( +32% YoY ) . New guidance — FY28 fy28 revenue ₹1,000 Cr . New story: Order book as growth engine .

Results

Revenue ₹78.40 Cr +32% YoY; EBITDA margin 15.3% (+32bps YoY); PAT ₹7.5 Cr +30% YoY; order book ₹807 Cr (2.7x FY26 revenue) with receivables down ₹10 Cr QoQ and borrowings up ₹23 Cr for Patna project working capital.

Financial highlights

Guidance

FY28 revenue target of ₹1,000 Cr reiterated, FY27 revenue target ₹600 Cr on track, product revenue expected to reach ~10% of total by FY28, and no equity dilution planned through FY28.

What management committed to

• Sugs Lloyd will achieve consolidated revenue of ₹1,000 Crores in FY28. — INR1,000 crores, FY28
• Full-year revenue for FY27 will reach approximately ₹600 Crores, delivering ~100% YoY growth over FY26. — INR600 crores, FY27
• Product business (FPI, auto reclosers, section analysers) will contribute around 10% of total revenue by FY28. — around 10%, FY28
• EBITDA margins will be sustained at current levels (around 15-16%) and have potential to improve as product mix shifts. — sustained at current levels, medium-term (FY27-FY28)
• Transmission vertical will start contributing to [Sugs Lloyd's] revenue in FY27. — FY27
• BESS business will add order inflows in FY27. — FY27
• Peak borrowings in FY27 will be around ₹130 Crores. — INR130 crores, FY27
• Debt-to-equity ratio will be restricted to a maximum of 1.1-1.2x. — 1.1–1.2 maximum
• No equity fund raising will be undertaken in FY27 or FY28, unless an unplanned requirement arises. — FY28
• [Sugs Lloyd] will have an unexecuted order book of approximately ₹2,000–2,500 Crores by the end of FY27. — ₹2,000 to 2,500 crores, FY27
• Q2FY27 will carry both its own billing and the revenue slippage from Q1, resulting in higher sequential revenue. — Q2FY27
• Compact FPI will be launched within the next 2-3 months, subject to successful technology tie-up. — Q2FY27

Key themes

Order book strength, FPI traction, and new vertical diversification

How the narrative shifted

• Order book as growth engine: Management portrays an ₹807 Cr order book (2.7x FY26 revenue) and a ₹1,350 Cr pipeline as visible proof of multi-year revenue visibility, with the challenge being execution, not order availability.
• High-margin product business inflection: FPI and niche products are positioned as the margin lever; Q1 product order intake matched all of FY26, and each new utility customer is seen as a long-term recurring opportunity that will raise blended margins.
• Diversification into transmission and BESS: Entry into transmission and BESS is presented as planned adjacency that leverages existing grid expertise; BESS is re-engaged after a deliberate pause, with identified smaller-ticket tenders where competition is lower.
• Working capital normalisation journey: Acknowledges elevated receivables and borrowings as a temporary consequence of project ramp-up, with multiple measures underway (TReDS, surety bonds, invoice discounting) to bring the cycle down gradually; no acute stress seen.
• Solar model evolution towards recurring streams: Solar business is being thoughtfully repositioned from one-off EPC to RESCO/capex+RESCO mandates that bring longer-term service contracts and better payment structures, with Bihar order as the first example.
• Capital discipline and no dilution commitment: Management emphasises that current resources are adequate for the ₹1,000 Cr FY28 plan, with a stated ceiling on D/E and explicit commitment to avoid equity raising barring an unforeseen need, signalling confidence in internal cash generation.
• Seasonality and quarterly lumpiness: Q1 is always the smallest quarter due to outdoor execution constraints; the 32% growth is seen as strong, and the full-year trajectory remains intact, with Q2 benefiting from spill-over.

Operational commentary

• FPI product business acceleration: New orders from Odisha (FPI + data communicators) and Madhya Pradesh (FPI with SCADA integration & 5-year AMC), adding new utility customers; Q1 FY27 product order intake already matched entire FY26 product orders, signalling strong bottom-line improvement from higher-margin segment.
• Patna RDSS smart grid project under active execution but initial teething problems and supplier delays caused some revenue spill-over from Q1 into Q2; project builds in-house SCADA/ADMS capabilities and positions company for similar mandates in other states.
• New vertical entry: Transmission tenders in final stage with first breakthrough expected shortly; BESS re-engagement after earlier pullback, identified tenders in Rajasthan and Bihar targeting smaller, scattered projects where competitive intensity is lower, with order inflows expected this financial year.
• Solar portfolio shift: Bihar NBPCL order (₹56 Cr) under PM-Surya Ghar scheme combines capex + RESCO model with 10-year service contract, marking first recurring revenue stream; similar structures being bid in other states, moving away from pure EPC.
• Product development pipeline: Compact FPI in advanced stage (target launch in 2-3 months subject to technology tie-up), vacuum circuit breaker prototype under development (type-test expected ~1 year), RMU at early stage; discussions with European/Asian technology partners for potential transfer arrangements.
• Qualified bid pipeline >₹1,350 Cr, with tenders at final stage exceeding ₹1,200 Cr; strike rate currently 15-20%, expected to improve once execution presence deepens in new states; fresh Q1 awards ₹58.37 Cr.
• Working capital actively managed: Customer collections ₹100 Cr helped reduce net receivables; TReDS and purchase invoice discounting being utilised; surety bonds being used to replace bank guarantees; debt ceiling maintained with D/E expected to stay below 1.1-1.2x.
• International exploration initiated in Africa at very early stage; no immediate opportunities in Sri Lanka.

Analyst Q&A

• Q. What is the expected closing order book by end of FY27?

  Exact number difficult to specify, but the qualified bid pipeline is ₹1,350 Cr with strike rate 15-20%; enough business available and we are not worried about order booking.

• Q. Why did Q1 revenue grow only 30% YoY given full-year guidance of 100% growth?

  Q1 is the smallest quarter due to seasonality; Patna project started only this quarter and initial teething issues caused some revenue to slip into Q2; supplier delays also contributed marginally, so it is a deferment, not a shortfall.

• Q. Are you confident of achieving FY27 ₹600 Cr revenue target?

  Yes, we are fully confident of achieving the momentum as per guidance; Q2 will carry both its own numbers and the slippage.

• Q. How will the revenue mix look when you hit ₹1,000 Cr in FY28?

  Power transmission & distribution ~40-45%, solar ~40-45%, rest 10% from products and other businesses; product target is to reach ~10% of total revenue by FY28.

• Q. Will incremental capex be needed for the new products (VCBs, RMUs) and how will it be funded?

  FPI needs no capex, but VCBs and RMUs will require additional capital expenditure. However, we are at a very initial stage and have not yet formalised the capex amount or the funding mix.

• Q. How do you see working capital and receivables risk?

  Industry average debtor days are ~180 days; we reduced receivables by ₹10 Cr this quarter and will continue to improve gradually. We are using TReDS, invoice discounting, and surety bonds to ease working capital pressure; as the company grows, more tools become available and we do not foresee any problem.

View source

Research and educational content only. Not investment advice.