Pace Digitek Q4 FY26 Earnings Call — Analysis (NSE: PACEDIGITK)

Pace Digitek reports Q4FY26 revenue of ₹1,097 Cr (+60.5% YoY), FY26 PAT of ₹307 Cr, and guides for 10 GWh BESS capacity by October 2026 with FY27 revenue of ₹3,200-3,400 Cr

26 May 2026 · Analysis by Alpha Inflection

The take

FY26 Revenue ₹2,641 Cr ( +8.3% YoY ) , Q4FY26 +60.5% . New guidance — FY27 fy27 consolidated revenue ₹3,200-3,400 Cr . New story: BESS capacity scale-up and manufacturing leader… .

Results

Q4FY26 revenue ₹1,097 Cr (+60.5% YoY); full-year FY26 revenue ₹2,641 Cr (+8.3% YoY), EBITDA ₹455 Cr, PAT ₹307 Cr (+10.1% YoY), PAT margin 11.4%

Financial highlights

Guidance

FY27 revenue guidance maintained at ₹3,200-3,400 Cr; FY28 guided at ₹4,000-4,200 Cr; BESS manufacturing capacity to reach 10 GWh by October 2026

What management committed to

• We maintain our revenue guidance for FY27 at ₹3,200 to ₹3,400 crores. — ₹3,200-3,400 Cr, FY27
• We maintain our revenue guidance for FY28 at ₹4,000 to ₹4,200 crores. — ₹4,000-4,200 Cr, FY28
• For FY27, we are expecting PAT margins in a range of 10% to 11%. — 10-11%, FY27
• The 5 GWh [BESS manufacturing] facility is expected to be operational from July 2026 onwards. — Q2FY27
• By October, we would be operating with 10 GWh operational capacity for BESS manufacturing. — 10 GWh, Q3FY27
• In-house container fabrication plant would be operational from July [2026] onwards. — Q2FY27
• We expect overall pricing and operating efficiencies to improve by approximately 4% to 5% through in-house container fabrication. — 4-5%
• In FY27, we expect around 20% to 25% of revenue to come from BOO projects. — 20-25%, FY27
• For FY28, the BOO project may give another ₹1,000 crores. — ₹1,000 Cr, FY28
• We expect approximately 300 to 500 MWh of orders from [NEC XON partnership across African markets] in FY27, and 20% to 25% growth over FY27 levels in FY28. — 300-500 MWh, FY27
• By end of the full financial year [FY27], we expect [10 GWh BESS capacity] utilization to reach ~80%. — ~80%, FY27
• The strategic inventory built up as of 31st March [2026] will benefit Q1 FY2027 in terms of reduction in cost compared to prevailing commodity prices. — Q1FY27

Key themes

BESS capacity scale-up and product-led revenue shift

How the narrative shifted

• BESS capacity scale-up and manufacturing leadership: Management is accelerating capacity expansion to 10 GWh ahead of plan, citing strong order book visibility and aiming to maintain first-mover advantage in the Indian BESS ecosystem.
• Revenue mix shift from telecom to energy: Energy now dominates the order book (78%) and is growing faster, but brings lower margins than telecom; management is guiding for a managed decline in PAT margins to 10-11% in FY27.
• Working capital stretch and normalization path: Receivables have ballooned due to Q4 revenue concentration and milestone-based billing in telecom; management has built up strategic inventory and expects normalization by September 2026, with FY28 CFO turning positive.
• Lithium-ion cell cost volatility: Cell prices have risen 20% due to regulatory changes; management pre-empted with inventory build and contingency clauses in bids, but cautions that if elevated prices persist, project timelines could be impacted.
• Product-led revenue strategy over BOO: For FY27-28, the company is deliberately pivoting to external product sales (BESS containers) and limiting new BOO projects to conserve capital, aiming for better ROCE and cash flow.
• Diversification into Railways, Africa, data centers: New growth vectors include Railway Kavach infrastructure, an exclusive Africa partnership with NEC XON, and developing green energy solutions for AI data centers, though EV charging is deprioritized.
• Government policy tailwinds: State-level BESS mandates (Maharashtra, Gujarat, Rajasthan) and Railway modernization are expected to drive demand, providing a supportive regulatory backdrop for the company's expansion.

Operational commentary

• BESS manufacturing capacity expanded from 2.5 GWh to 5 GWh (operational July 2026) and further to 10 GWh by October 2026, ahead of earlier plans due to order book visibility
• Order book stands at ₹11,338 Cr, with 5.32 GWh of BESS orders (2.72 GWh BOO, balance EPC); 178 BESS containers delivered and 480 MWh utility-scale BESS executed in FY26
• In-house BESS container fabrication plant to be operational from July 2026, expected to improve pricing and operating efficiencies by ~4-5%
• Strategic inventory build-up of lithium-ion cells (₹540 Cr) to mitigate 20% price increase effective April 1, 2026; inventory to benefit Q1FY27 costs
• Expanding into Commercial & Industrial (C&I) BESS segment with product launches and certifications underway
• New orders secured from BSNL, Railways, and RailTel for Kavach infrastructure and digital projects; participation in Kavach corridor tenders
• Exclusive partnership with NEC XON for Africa markets; 300-500 MWh of orders expected in FY27, growing 20-25% in FY28
• Data centre solutions being developed for green energy RTC requirements; EV charging not a focus area
• Management indicated cell manufacturing is 'very much on the cards' with an announcement expected soon
• Receivables ₹2,442 Cr include ₹900 Cr milestone-based unbilled from a telecom project (BSNL) with 5-year billing schedule; ₹300 Cr collected in April-May 2026

Analyst Q&A

• Q. Reason for delay in BESS capacity commissioning (postponed by a quarter)?

  Delayed by two months, not a full quarter, due to shipping disruptions from the West Asia conflict; equipment now arrived, 5 GWh line to be operational by July 2026.

• Q. Impact of energy mix on margins and FY27 PAT margin expectation

  Energy EBITDA margins are lower than telecom; with higher energy contribution, FY27 PAT margin is expected in the 10-11% range.

• Q. Reconciliation of FY25 receivables difference between FY26 balance sheet and RHP

  Explained reclassification of ₹295 Cr to non-current; after further probing, asked to email separately for clarification.

• Q. Unit economics of BOO projects (MSEDCL example)

  Detailed breakdown: cost ₹1.3-1.35 Cr/MWh, net of GST ₹1.2 Cr, VGF ₹27 lakh/MWh, net cost ₹93 lakh/MWh, revenue ₹2,19,000 per MW per month, project IRR 12-13% at SPV level.

• Q. When will cash flow from operations turn positive?

  Working capital expected to ease by September 2026; CFO positive expected in FY28.

• Q. Competitive moat once others ramp up BESS capacity

  BESS is a complete ecosystem beyond manufacturing; first-mover advantage with field operations, 200 engineers, Network Operating Center, L&T order validation, and 1+ year of field performance.

Research and educational content only. Not investment advice.