Hind Rectifiers Q2 FY26 Results: PAT Up 44%, FY26 Guidance On-track
Guidance of 30%+ revenue CAGR for FY25-29 by Hind Rectifiers. Even after a strong a Q2 FY26 the valuations are at a premium and price in the growth till FY27
1. Power Electronics Equipment Manufacturing
hirect.com | NSE: HIRECT
Our core customer is Indian Railways, contributing 90% of our revenues
2. FY21–25: PAT CAGR of 63% & Revenue CAGR of 21%
3. FY25: PAT up 197% & Revenue up 27%
4. Q2-26: PAT up 44% & Revenue up 37% YoY
PAT up 15% & Revenue up 6% QoQ
Appointment of a new CEO
Acquisition of BeLink Solutions, France – European manufacturing base
Commissioning of Copper Conductors facility at Sinnar
Backward integration, supporting traction transformer requirements
Gross margins contracted (H1 to H1 comparison).
Due to supply chain and logistics problems
Shortage of copper conductors which necessitated expensive imports
Weaker product mix was also a contributing factor.
5. H1-26: PAT up 61% & Revenue up 47% YoY
PAT up 38% & Revenue up 25% HoH
Despite gross margin challenges Hind Rectifiers delivered improvement in EBIDTA and PAT margins in H1-26 compared to FY25
Margin improvement is a key deliverable of the new CEO of Hind Rectifiers
6. Return Metrics: Improving & Strong Return Ratios
7. Outlook: 30% Revenue CAGR for FY25-29
7.1 Management Guidance
Revenue Growth
You can expect higher growth but my official commitment is 30%.
We will be crossing that 30% on the year to year basis at least for next three years
EBIDTA Margin: Can we reach mid double digit in next one or two years – regarding the margins that’s actually the first goal of our CEO
Order-book: execution is 12 to 18 month window by which we have by which time we have to complete all the orders that we have on hand, particularly for the railway side.
Order book – at an all time high
7.2 H1 FY26 Performance vs FY26 Guidance
HIRECT H1 FY26 Performance Ahead of FY26 Guidance
Revenue: H1 revenue ahead of the official 30% revenue growth guidance.
Even the management is indicating growth to be higher than the promised 30%
Margins: Improvement from FY25
Order-Book: Order book at all time high and supporting revenue visibility to FY27
7. Valuation Analysis — Hind Rectifiers
7.1 Valuation Snapshot
Current Market Price: 1485.6; Market Cap: ₹2,552.8 Cr
Assumptions: 40% growth in FY26, 30% growth going forward
Valuations reflects its high growth and improving margins
Even after the recent correction — multiples already discounts the guidance till FY27.
Suggests limited room for further multiple expansion in the near term
Limited opportunity for entry barring corrections
Existing holders can ride the momentum till it lasts
7.2 Opportunity at Current Valuation
Conservative Guidance
FY26 growth ahead of 30% growth guidance
Management indicating that growth for FY27 to FY29 will also be higher than the 30% guidance
Margin Expansion
With margin expansion a key deliverable for the new CEO bottom-line expected to grow faster than the top-line
Optionality from exports, HVAC, and defense could unlock further upside.
7.3 Risk at Current Valuation
High Execution Bar: Delivering 30%+ revenue CAGR for FY25-29 will need strong execution even though supportive demand tailwinds are in place
Valuations are demanding: Valuations for FY26 and FY27 don’t allow for any margin of safety. Impact of even a single weak quarter will be seen in the stock price
Supply Chain Risks: H1 FY26 has already seen lowered gross margins on account of supply chain issues
Concentration Risk: Railways accounting for ~90% of revenue of Hindustan Rectifiers
Propulsion system still in field trial phase – contribution to revenue is contingent on trial success and tender wins.
Previous Coverage of HIRECT
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