Earning call transcript for Q2 & H1 FY 26
VOEPL · price
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Virtuoso Optoelectronics reported H1 FY26 revenue of ₹298 crore, nearly flat versus ₹305 crore a year ago, but EBITDA jumped 13.5% to ₹31.8 crore with margin improving 163 bps to 13.6%, helped by a better mix of non-AC products. PAT margin shrank sharply to 1.1% from 2.4% largely due to a one-time deferred tax liability, while PBT fell 30% YoY to ₹7.8 crore. Management revised full-year FY26 revenue guidance to ₹800–900 crore (from the earlier ₹900 ± ₹100 crore range), but kept overall EBITDA margin guidance at around 9% and PAT margin at 2–3%. The company is investing heavily in capacity: AC output is set to rise from 10 lakh to 18 lakh units (with a new Chennai plant on a 5-year lease), EMS capacity is doubling to 800,000 components per hour by mid-next year, and 50% of compressor capacity for next year is already booked. FY26 CapEx is pegged at ₹100–110 crore (40% AC, 40% compressor, 20% EMS), with ₹70 crore already spent in H1. AC contribution to H1 revenue fell to ~50% from 75% last year as the segment degrew 30–35% YoY due to weak season, inventory build-up and B-rating changes.
Near-term margin pressure is acknowledged, with management budgeting a small correction in AC EBITDA margins due to copper cost inflation (~$3,000/ton spike), but expecting the 9% overall EBITDA to hold on a better mix. Stock direction will hinge on AC demand recovery, progress on compressor QCO policy, and execution of new customer wins, which management expects to reduce Voltas' share of AC revenue from near 100% today to 40–60% next year.