Harsha Engineers International Ltd

ESOP grant details

• Nomination and Remuneration Committee approved grant of 428,000 ESOPs to eligible employees under ESOP 2026.
• Options exercisable into 428,000 equity shares of Rs 10 each.
• Exercise price set at Rs 370, up to 20% discount to grant-date market price.
• Vesting not applicable yet; minimum vesting after 1 year, maximum 4 years from grant.
• Exercise period is up to 4 years from grant; vested options may be exercised during this window.
• Plan overseen by Committee; no additional lock-in on shares post-exercise.

Meeting Details

• Date and time: September 30, 2026, 10:00 A.M. onwards.
• Type and mode: Plant Visit/Group Meeting, Physical.
• Venue: Ahmedabad, Gujarat.
• Organiser: Harsha Engineers International Limited.
• Key company participants: Company Secretary and Chief Compliance Officer.
• Purpose: Investor/analyst interaction during plant visit.

Harsha Engineers International Limited – Trading Window Closed from October 1, 2026 till 48 hours after declaration of Unaudited Standalone and Consolidated Financial Results for the quarter and half year ended September 30, 2026

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.