Standard Engineering Technology Ltd
(NSE:SETL)
₹
298.4
+0.75 (+0.25%)
Market Cap: 60.26 Bil
Enterprise Value: 58.76 Bil
PE Ratio: 69.72
PB Ratio: 7.55
GF Score: 18/100 
Q1 2027 Standard Engineering Technology Ltd Earnings Call Transcript
Aug 06, 2026 / 12:00PM GMT
Release Date Price:
₹274.65
(-1.21%)
Key Points
Positve
- Record Q1 FY27 results with total income up 41% YoY and PAT up 26% YoY, demonstrating strong core business growth.
- Strategic entry into AI data center infrastructure via GScale Energy acquisition (up to 51% stake), targeting ₹250 crore revenue in FY27 with strong client interest from global MNCs and Indian players.
- Partnership with JLACO Japan (19% stake, option to increase to 51%) provides access to unique glass lining technologies (conductivity glass, low-leaching semiconductor-grade) with no direct competitors in India or globally.
- Core engineering business expected to grow 40-50% in FY27, reaching ~₹1,200 crore revenue, supported by a robust order book of ₹1,400 crore.
- GScale's innovative prefabricated skid-mounted solutions can reduce data center project timelines from 24-36 months to 15-18 months, offering significant value to customers.
- Management expects EBITDA margins to improve to 17-18% for core business and 23-25% for GScale, driven by operating leverage and new high-margin products.
- Working capital days are expected to reduce to below 200 days in FY27 due to better inventory management and increased customer advances.
- Expansion into new markets (Europe, US) for glass-lined heat exchangers and reactors, leveraging Japanese technology with Indian manufacturing cost advantages.
- Strong growth drivers: CDMO sector contributing ~50% of order book, with industry-wide CapEx investments in pharma and chemical sectors.
- Management is committed to disciplined capital allocation, with GScale investments expected to generate over 20% ROE.
Negative
- Exports were only 2-3% of revenue in Q1 FY27 due to global market uncertainty and a 4x increase in shipping costs, impacting international growth.
- EBITDA margin declined to 17.5% due to increased employee and other operating expenses, partly from investments in new businesses.
- GScale revenue guidance of ₹250 crore for FY27 is dependent on successful conversion of advanced LOIs and timely factory ramp-up by November 2026.
- The company has not provided clear margin guidance for new businesses (GScale and JLACO products), creating uncertainty for investors.
- Working capital cycle remains high (220-240 days) in the core business, though expected to improve, still poses liquidity risks.
- The JLACO partnership involves technology secrecy concerns, with critical components manufactured in Japan, limiting local value addition and potential technology transfer.
- GScale's business model relies on partnerships with global OEMs (e.g., Schneider, ABB) for key components, which may limit pricing power and expose to supply chain risks.
- Management has not provided detailed financial projections for FY28 or beyond, leaving investors without clear long-term visibility.
- The data center market is highly competitive, and the company's ability to secure large turnkey projects is unproven, with no confirmed orders yet.
- The acquisition of JLACO stake (₹71 crore) and GScale investments (₹500 crore) increase financial leverage and execution risk, especially if revenue targets are missed.
Operator
( Operators Instructions )
Please note that this conference is being recorded.
I now hand over the conference call to Mr. Ashish Poddar from Motila Oswal.
Thank you, and over to you, Ashish.
Ashish Poddar;Nageswara Rao Kandula
Motilal Oswal Financial Services - Analyst;Standard Engineering Technology Ltd - Managing
Yeah, thank you, Avish.
Good evening, everyone, and welcome to Q1 FY27 Earnings Conference Call of Standard Engineering Technology Limited.
We have on the call Mr. Nageshwara Kandula, the managing director, and he joined by his esteemed senior management team.
We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in the conjunction with the risks that the company faces.
I will now request MD sir to please take us through the financials and the business update subsequent to which we will open the floor for the question-and-answer.
Thank you and over to you sir.
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