Harsha Engineers International Ltd

Resignation of Senior General Manager

• Lokesh Miglani, Senior General Manager, Head-Brass SBU, resigned effective Aug 21, 2026 due to new opportunities.

Financial Performance

• Consolidated Q1 FY27 revenue up 25% YoY; India Engineering up ~21% YoY.
• Raw-material costs up ~8% in Q1; pass-through lag of 1–2 quarters.
• FX loss ~Rs 4 crores in Q1; no material adverse impact expected.
• Export from India Q1 FY27 Rs 139 crores; YoY +22%; QoQ +11%.
• Bushing Q1 sales Rs 34 crores; ~35% YoY growth.
• Stamping Q1 sales Rs 90 crores; ~31% YoY growth.
• Large-size Cages Q1 sales ~Rs 10 crores; ~50% YoY growth expected for the year.
• Japan segment Q1 Rs 21 crores; +25% YoY; full-year Rs 72 crores; ~10% YoY.
• Advantek annual target ~Rs 140 crores; FY26 Rs 43 crores; PAT positive by FY27.
• Harsha China: ~10% growth in current year; FY26 sales Rs 120 crores; EBITDA 12–14%; PAT ~6%.
• Harsha Romania remains negative; Q1 FY27 FX loss Rs 2 crores; ongoing losses; top-management changes.
• Consolidated EBITDA for Engineering: Rs 69.8 crores in current quarter; Rs 77 crores prior quarter; Rs 65.3 crores last year.
• Solar business: revenue Rs 36.3 crores; EBITDA Rs 2.82 crores in current quarter.
• Total capex in Q1: Rs 37 crores (consolidated).

Operating / Segment Update

• Japan 1Q revenue Rs 21 crores; growth driven by ongoing engagement with major customers.
• Advantek: annual sales target ~Rs 140 crores; PAT positive by FY27‑end.
• Harsha China Brownfield expansion underway; debt funding secured at attractive rate; commissioned by FY28.
• China Phase‑2 capex on track; Bhayla plant expansions: building construction started; additional buildings by year‑end.
• Stamping: new products in white goods, railways; strong pipeline over next 12–18 months.
• Wind/rail/aerospace focus: expanding bushings, cages, stamping components; inorganic opportunities explored.

Projects and Capex

• FY27 Capex guidance: Rs 180–200 crores over 1.5–2 years; this year Rs 50–80 crores; rest next year.
• China Brownfield expansion commissioned by Q3 FY28; ramp‑up from FY29 onward.
• Bhayla expansion: Phase 2 underway; Phase 2 products differ; incremental capacity expected to fill next year.

Outlook and Guidance

• India Engineering FY27 growth guidance: mid‑to‑high teens; overall FY27 low teens.
• Japan segment full year guidance: Rs 72 crores; ~10% YoY growth.
• China growth ~10%; EBITDA margin 12–14%; PAT ~6%.
• Advantek PAT positive by FY27 end; ramp‑up to align with India EBITDA margins from next year.
• Capex guidance: Rs 180–200 crores for FY27–FY28; Rs 50–80 crores this year; rest next year.

Q&A Takeaways

• Q1 growth appears broad‑based; Europe recovery plus India demand cited by management.
• FY27 growth guidance revised to mid‑teens India; overall low‑teens; RM pass‑through to pricing.
• Romania losses to diminish over time; China already profitable; timing depends on ramp in cages.
• Capex plan: Bhayla/China expansions; total Rs 180–200 crores over 1.5–2 years.
• Japan top customer wallet share debated; management cites 80–90% wallet share across major customers.
• Advantek: PAT positive expectation by FY27; margin discipline to continue.

Meeting Details

• Date 11 Aug 2026; analysts/investors call (audio); purpose Q1 FY26-27; participants: Sec & CCO; recording available.

Business Overview

• Largest manufacturer of precision bearing cages in India; ~6.5% global market share.
• Five facilities across global footprint serving 25+ countries on five continents.
• Diversifying into complex precision stamped components and bronze bushings.
• Cages produced from 20mm to 2000mm diameter; 7,500+ products since inception.

Key Operational Highlights

• Q1 FY27 consolidated revenue grew 25.2% YoY on strong India demand.
• HEIL + Advantek India revenue rose 21% YoY in Q1 FY27.
• Advantek revenue ₹30cr; Q1 PAT loss ₹4.3cr; full-year PAT expected positive.
• Bushings ₹34cr; 34.7% YoY growth; on track for >30% FY26 growth.
• Stampings ₹19cr; up 31% YoY; on track for >30% FY26 growth.
• Large size cages ₹10cr; flat YoY; expect >30% growth in FY27.
• Harsha Romania underperformed; combined foreign subsidiaries net loss ~₹3.3cr in Q1 FY27.
• China Brownfield expansion on track; commissioning scheduled Q3 FY2028.
• Consolidated Q1 FY27 revenue ₹46,256 L; EBITDA ₹7,261 L; PAT ₹3,738 L.

Financial Performance

• Total revenue: ₹46,256 L in Q1 FY27; EBITDA: ₹7,261 L; PAT: ₹3,738 L.
• PAT margin 8.2%; EBITDA margin 15.9% in Q1 FY27.
• Total comprehensive income ₹4,386 L in Q1 FY27.
• Engineering & Others revenue ₹42,108 L; India segment ₹30,996 L; Solar EPC ₹3,635 L.
• Receivables days 74; payables days 42.

Strategic Outlook & Expansion

• China Brownfield expansion on track for completion in Q3 FY2028.
• Growth driven by India with improving Europe/ROW demand.
• Advantek profitability expected to turn positive during the year.
• Foreign subsidiaries anticipated to incur low single-digit net loss for full year.

Risks & Operational Challenges

• Raw material costs rose 6–8% in Q1 FY27; price/margin pass-through planned.
• Forex losses from cash flow hedge settlements; about ₹4cr in Q1 FY27 incurred.
• Foreign subsidiary underperformance; mitigated by China, though overall losses in near term.

Financial results approved

• Unaudited standalone and consolidated results for quarter ended 30 June 2026 approved.
• Standalone total income Rs 32,318 lakh; PAT Rs 4,568 lakh.
• Consolidated total income Rs 46,256 lakh; PAT Rs 3,738 lakh.
• Auditors expressed unmodified opinions on standalone and consolidated results.
• Segment information shows revenues from Engineering & Others and Solar-EPC & O&M.
• Notes confirm results prepared in accordance with Ind AS 34.

Meeting Details

• Date: August 14, 2026; Venue: Sofitel BKC, Mumbai; Organizer: Equirus Annual India Conference’26; Type: group/one-on-one.

Participants

• Company officials (management) to participate; specific roles not disclosed.

Purpose

• Purpose: investor/analyst interaction during conference.

Additional Notes

• Schedule may change due to unforeseen exigencies.

AGM Details

• AGM held on 23 July 2026 at 11:00 a.m. IST via VC/OAVM.
• Voting cut-off date was 16 July 2026.
• Consolidated Scrutinizer's report submitted; remote e-voting conducted 20–22 July 2026.

Resolutions and outcomes

• Ordinary Resolution 1: Adopt audited standalone and consolidated financial statements; passed.
• Ordinary Resolution 2: Declare final dividend on equity shares; passed.
• Ordinary Resolution 3: Re-appoint Rajendra Shah as director; passed with overwhelming support.
• Ordinary Resolution 4: Re-appoint Harish Rangwala as director; passed with overwhelming support.
• Ordinary Resolution 5: Appoint Mukesh M. Shah & Co. as Statutory Auditors for five years; remuneration fixed.
• Ordinary Resolution 6: Ratify remuneration of Cost Auditors for 2026-27.
• Special Resolution 7: Re-appoint Ambar Patel as Independent Director.
• Special Resolution 8: Re-appoint Bhushan Punani as Independent Director.
• Special Resolution 9: Re-appoint Kunal Shah as Independent Director.
• Special Resolution 10: Re-appoint Ramakrishnan Kasinathan as Independent Director.
• Special Resolution 11: Approve Harsha Engineers Employee Stock Option Plan 2026.
• Special Resolution 12: Approve ESOP grant to subsidiary employees under Plan 2026.

Dividend

• Final dividend on equity shares approved.

Director changes

• Rajendra Shah re-appointed as director.
• Harish Rangwala re-appointed as director.
• Ambar Patel re-appointed as Independent Director.
• Bhushan Punani re-appointed as Independent Director.
• Kunal Shah re-appointed as Independent Director.
• Ramakrishnan Kasinathan re-appointed as Independent Director.

Auditor appointments

• Mukesh M. Shah & Co. appointed as Statutory Auditors for five years.
• Cost Auditor remuneration for FY 2026-27 ratified.

ESOP approvals

• Harsha ESOP Plan 2026 approved.
• ESOP grant to subsidiary employees under Plan 2026 approved.

Dematerialisation actions

• Dematerialisation requests were processed and confirmed to the depositories.
• Securities dematerialised have been listed on the stock exchanges where earlier issued securities are listed.
• Physical certificates for dematerialisation were mutilated and cancelled after verification.
• Depository name substituted as registered owner within prescribed timelines.