ISGEC Heavy Engineering announced robust Q3 FY’26 results, reporting a 21% year-over-year increase in stand-alone total income to INR1,365 crores. Consolidated profit before tax from continuing operations surged by 72% to INR150 crores. Order book remains strong at INR8,709 crores consolidated. The company is progressing with significant capital expenditure plans across key divisions, expecting major revenue boosts by FY’27 and FY’28.
Q3 FY’26 Financial Highlights
ISGEC Heavy Engineering reported strong financial performance for the quarter ended December 31, 2025. On a stand-alone basis, total income reached INR1,365 crores, marking a 21% increase over the INR1,128 crores reported in Q3 FY’25. Stand-alone profit before tax improved by 27% to INR99 crores.
The consolidated figures showed even more significant growth from continuing operations. Consolidated total income increased by 17% to INR1,765 crores. Crucially, consolidated profit before tax from continuing operations jumped by 72% year-over-year, reaching INR150 crores compared to INR87 crores previously. This improvement was attributed to better profitability in the core engineering business and the joint venture, Isgec Hitachi Zosen Limited.
Order Book Strength and Composition
The order book remains robust across both bases. Stand-alone orders booked in the quarter totaled INR1,426 crores (up from INR1,290 crores in Q3 FY’25). The stand-alone order book in hand stood at a comfortable INR7,649 crores as of December 31, 2025, including INR1,629 crores (21%) in export orders.
At the consolidated level, orders booked were INR1,733 crores, and the total orders in hand reached INR8,709 crores, compared to INR7,334 crores last year. Management noted the book is well-diversified.
Capital Expenditure and Expansion Plans
Management detailed several planned capital investments aimed at significant revenue growth:
- Machine Building Expansion (Presses/Machinery): An ongoing expansion expected completion by July 2026, adding annual revenue of INR225 crores.
- Further Investment in Machine Building: A further investment of INR218 crores approved for enhancing capacity, expected completion by July 2027, yielding an additional annual revenue of about INR375 crores.
- With both investments, the division aims to boost revenue from the present INR400 crores per year to about INR1,000 crores per year.
- Machining Facility for Iron Castings: An investment of INR22.6 crores approved to set up a new facility, aiming for an additional value addition of about INR20 crores per annum.
- Skids and Modules Facility at Dahej: The initial INR87 crores investment has been revised to INR110 crores, with phased completion expected by March 2027 (Phase 1) and March 2028 (Phase 2).
Hitachi Zosen JV Performance
Margins in the machinery equipment segment showed significant improvement. The JV with Hitachi Zosen contributed significantly, with its order book standing at INR946 crores as of December 31, 2025. Management confirmed efforts to maintain double-digit margins across manufacturing businesses.
Divestment Update (Cavite Biofuel)
The planned sale of the wholly-owned subsidiary, Cavite Biofuel Producers Inc., could not be completed as the buyer failed to finalize payments. The subsidiary is now classified as assets held for sale, though the plant remains operational, achieving 75% capacity utilization.
Outlook and Guidance
Management is currently maintaining the previous guidance of 7% – 8% revenue growth at the consolidated level for the year, despite strong Q3 performance, citing a desire to remain conservative. Stand-alone revenue growth is expected to be in the 8% – 9% range for the next fiscal year (FY’27).
Commodity Risk and Pricing
Regarding commodity inflation risk on the large order book, management stated that most contracts are fixed price. Risk management involves securing back-to-back offers from suppliers. The exposure is estimated to be on a small portion (less than 10% of order value) related to late-stage structural steel supplies.
Source: BSE
