Tembo Global Industries Limited (TEMBO) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q4 and FY26 earnings conference call of Tempo Global Industries Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-down phone. Please note, this conference is being recorded. At this time, I would like to hand the conference over to Ms. Yeshvi Jain. Thank you, and over to you, ma'am.

Thank you, Steve. Good evening, everyone. On behalf of Tembo Global Industries Limited, I welcome you all to the company's Q4 and FY26 earnings conference call. To discuss the performance of the company, we have with us the management team represented by Mr. Sanjay Patel, Managing Director, Mr. Shabim Merchant, Director, and Finance Team. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties, and other factors, which will be beyond management's control. We kindly request to bear in mind that there may be uncertainties while interpreting such statements. We now start the session with an opening remark from the management team. Afterwards, we will open the floor for an interactive Q&A session. I will now hand over the conference call to Mr. Shabeem Merchant for his opening remarks. Thank you, and over to you, sir.

Thank you, Yashree. Good evening, everyone. I welcome you all to Tembo Global Industries Quarter 4 and FY26 earnings conference call. Firstly, many thanks to the Almighty, and thank you all for joining us today and for your continued support. FY26 has been a transformational year for Tembo Global Industries. Marked by strong financial performance, execution excellence, and meaningful progress across our strategic priorities. During the year, we delivered robust revenue growth of 46.7% to Rs. 1090 crores, which is 1,090 crores, supported by strong execution across our core businesses. This was complemented by significant improvement in profitability, with EBITDA growing by 55.4% and PAD increasing by 79.7%. Reflecting enhanced operating leverage and a focus shift towards margin-accredited segments. Our engineering solution segments remain the primary growth driver, supported by strong demand from the infrastructure-linked sectors such as oil and gas, marine, water, and EPC. Industry tailwinds driven by infrastructure, investments, energy demand, and global project opportunities continue to create a strong growth environment for our businesses. We also achieved an important milestone in strengthening our global EPC presence. That includes qualifying as an L1 bidder for a prestigious offshore project in Kuwait, valued at approximately 300 crores. This highlights our growing capabilities in executing complex, high-value international projects. Our order book remains robust at around 1,548 crores, supported by a strong bidding pipeline exceeding around 2,200 crores. This provides us with clear visibility and confidence in sustaining our growth momentum over the medium term. In addition, FY26 marks significant strategic progress in diversification. Our solar power projects are progressing as planned, and I expect it to be operational by the end of quarter to FY27, with revenue contribution beginning thereafter. In defense manufacturing, we have secured key licenses and initiated partnerships, positioning ourselves when to tap into India's growing defense ecosystem. We have also continued to invest in capacity expansion, which will support future growth, enhance operational efficiency, and enable us to capture emerging opportunities across segments. Looking ahead, we remain confident in the company's trajectory, backed by strong fundamentals, a healthy order for a pipeline, and expanding capability. We are targeting revenues of approximately Rs. 1600 crore, approximately a growth of around 30-40% in FY27. Overall, we believe Tembo is well positioned to sustain its growth momentum, deepen its market presence, and create a long-term value for all stakeholders. Thank you.

Oh, yes, sir. Should we open the floor for Q&A?

This person is available.

Hello? Yes, sir. Okay, thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will now begin the question and answer session. We will wait for a moment while the question queue assembles. The first question comes from the line of Aniket Madhwani with Step Trade Capital. Please go ahead.

Hello, I'm out again.

Yes, yeah, a little sketchy. Yeah.

Hello. Yeah, so, I just wanted to understand about your defense business. So, if you could just, you know, explain what actually are you, you know, providing in your defense business and any revenue contribution was occurred in 526? So, if you could just give it to you.

Arike, what is the last question? Any revenue?

Revenue recognition has occurred from different segments in F526.

This is your question, right? Good evening, Aniket. In FY26, there is no contribution from defense business. The contribution towards the defense revenues, we look... FY27.

And what actually are you planning to know?

So we have, we can proudly say, as a company, we have acquired a license to manufacture small arms and ammunition. We got a small arms manufacturing license on 31st December 2025, and an ammunition license for various calibres on April 19, 2026, in a record time of less than a year. We plan to manufacture this in our first phase. We plan to manufacture arms and ammunition over the next three years with a complete buyback to our European counterpart.

Okay, and from this order book, you mentioned of 1,500 crores. So, from that order book, how much is from defense segment?

So, defense would contribute around roughly between five, because it was going to start in the last, the second last and the last quarter of FY27. So, we look at around five to six percent of contribution. Roughly up to 10%. 10% more? Projections what we have given for FY27.

So, my question was regarding the order book, actually. So, you have mentioned of 1,548 crores of order book is outstanding.

Silent order book. Silent order book is only related to engineering and EPC segment. Defense isn't complete by that.

And what are you predicting the top line and the bottom line for F5, sir?

We would be in line of the current, progressing positively in line towards the current trend what we have been having. So we look at at least 30 to 40 percent growth in the year coming ahead, and bottom line would be positively progressive.

And I just wanted to understand the margins. Overall, you'll be able to achieve in defense segments, so if you could, let's highlight the contact.

Sorry, I can't hear you. Sorry. Can you repeat it?

Yeah, sure. So, I was just asking what margins you will be able to achieve in your different segment. I mean, any changes can we see on a control level?

Your last lines are being a little sketchy. Can you repeat again, please?

Yeah, I'm audible now.

Now you're audible, yes.

So I was just asking, what margins will you be able to maintain in your defense segment, and what margins we should expect at the blended level in FY27?

FY27, the margins would be around in the range of 10 to 12% fat.

And what would be your capex in coming years,

capex regarding the expansion? So we have already planned our expansion, which is we have already got into solar. So we believe in commissioning the solar projects, which would start in around the end of... The quarter two, beginning of quarter three, that would be commissioned. And defense, capex is already planned. Factory expansion is in place. So this is the capex, which is already planned. And so right now, we are concentrating on this current expansion, which current projects, that is the factory expansion, the solar project, and the defense project. That is the capex, which is already planned and done. First, we believe in commissioning these projects.

Thank you.

Thank you. Question comes from the line of Deepak Pozar with Sapphire Capital. Please go ahead.

Can you hear some audibles, sir? Yes, yes. Good evening, sir. So, first of all, I wanted to understand this quarter we had a good share in minority interest, right? So, what drove that and how should one look at minority interest going forward?

So, I'll just hand it over to my finance team.

See, minority interest will be consistently the same, which is currently maintained. Okay.

Percentage of your pact? I mean, percentage of your... before minority pact, pact would mean same?

Yeah, yeah, same percentage of the pact.

And it was account of what project? I mean, what accounted for this minority interest?

The minority interest is what in the consolidation for the shareholders, which are falling under them as per the accounting standards calculation.

No, so which segment is bringing minority interest for us? No, it is from the same segment only.

It is from our existing business. It is only a minority interest.

And FA27, so what sort of debt addition plan we have?

Debt? Addition? Yes. So, I'll hand over to my colleague.

Yeah, hello. So, the debt estimation at consolidated level we are projecting currently, it will be around 300 to 350 crores. Yeah, yeah, by FI 27, because it involves the capex of solar, defense, and some working capital arrangements with the bankers.

Okay, so this is the addition you're talking about, or the, I mean, this is the addition you're talking about?

Addition, addition, I am talking of addition.

Addition, 300 to 350, and this will be utilized majorly in defense? Yeah, defense and solar both. Solar and defence both, because both are getting commissioned this year only, right? Yeah, correct, correct, correct. Okay. And regarding your 10 to 12% of PAC margin would require at least 17 to 18% of EBITDA margin, right? And what would drive your EBITDA margin, I mean, because your current EBITDA margin was close to 13%, right? Given the debt addition you would require and the corresponding interest cost, your EBITDA margin should be in the range of 17 to 18% to get to at least 10% of PAC margin.

Yes, it will be maintained in the same range only, but we can generate an additional EBITDA from better project management and higher efficiency from the projects.

But the difference has a better margin efficiency, so definitely that will help in generating the EBITDA and maintaining that.

Okay. But defense, I mean, at a lower scale of 160 crores, I mean, that's what you're projecting, right? I mean, 10% of your 116 hundred.

It would range, it would, we will try our best to maximize on it, because, of course, it scales a better margin. We will try to maximize on it, but we see that from quarter three to quarter four, at least we would go in the range of five to ten percent, right?

Okay. Okay. Understood. But at lower scale also, you can generate 30-35% EBITDA margin that you have earlier alluded?

Yes. We would be maintaining that, yes. Because our group, in totality, the group has four segments. Engineering also has a higher margin capability. EPC shows us volumes and scalability. Solar gives us fixed revenue model, where we have a PPA in line, and defense gives you a decent margin.

Got it, got it. Understood. Fair point. And just one last thing, engineering division, what is your margin profile?

Basically, maximum margin is coming from this engineering only, but the percentage we don't have handy at this time, we will let you, you know.

Okay. It's a mix of products.

Yeah, I was looking at blended. I mean, what's the engineering division blended margin? I mean, because 75% of revenue comes from there. You can always write an email and we can get back to it. No problem, no problem. I think that would be it from my side. Wish all the best. Thank you so much, yeah.

Thank you.

Thank you. The next question comes from the line of Kunal Shah with Heartwood Financial Services. Please go ahead.

Hello, can you hear me? Yes, you are. Good evening, and congratulations for the good set of numbers and the order went from the defense sector. I just wanted to ask you a couple of questions. For quarter, you've given us the guidance for 1600 Kroll for the full year. Can you help me with the guidance for quarter 1 and 2, along with Pat? And the capacity expansion which you've done in Vasari plant, are we going to get any contribution in quarter one, quarter two?

Sorry, the last thing again has not come right. Sorry. Can you repeat it, please, for now?

Sure. The capacity expansion, the capacity ramp-up which we did... From 18,000 MTA to 1 lakh MTA in 2026.

Hello, yeah, Kunal. So, first number cannot be dictated here. It is rules of MSE. So, kindly don't ask every quarter profit and everything. Whatever we have given on an annual basis, you have to count it that only. Understood. Understood. Let us be very clear with what the regulation and you know better than what we do. So, please call in sign only.

Sure. And one more thing, Kunal, the ramp-up capacity is over a period of two to three years.

Two to three years. Okay. And is the current ongoing fuel and oil prices, has it hampered our production in any way?

We have been receiving orders on a daily basis. And there was a minor hitch in the very beginning when the war started at that time, but I think everything is in line at the moment, and our dispatches, our factories are running on two shifts, and manufacturing...

So no major disruption with the ongoing...

Oil and gas is not a raw material which we use in our production, so it does not matter.

Okay, thank you so much. Thank you.

Thank you. The next question comes from the line of Aniket with Siyad Kothari Suns and Stockbroking. Please go ahead.

I hope I am audible. Thank you for the opportunity, sir. So my first question would be on solar vertical. I just want to understand that out of the 28 sites that we have grabbed as of now, how much percent of work is completed across them in a consolidated percentage? And to add to that, can you just provide a breakup for the funds raised in FY26 for this vertical, and what would be the remaining amount? That would be my first question.

Yes, reply. One second one, I'll give you two months, I'm out.

Yeah, all right. So, out of 28 sites, 7 to 8 sites is about to commission, and so, and the balance sites will be commissioned in next three to four months. So, probably by end of Q2, or starting of Q3, we are planning to commission all the solar sites.

That's great. Yeah, and about the follow-up question which I asked about the same vertical, what type of funds did we raise in FY26 as full year, and what would be the remaining amount? Out of the total capex plan for solar?

Yeah, so the project cost is of around 600 crores. And we have raised the debt and the equity both last year for this project, last and last to last year. And we have already spent around, till now we have already spent around 300 crores towards this project.

Okay.

Yeah.

And my second question would be around, Like, the YOY, if you check in YOY terms, engineering APC revenue grew by almost 200 plus percent, but the EBIT margins, which we posted, nearly half. So, can you please explain what went wrong around that, and are we taking any steps to pass on the rising costs? Like, sir, just mentioned that we don't get affected enough, but I guess there must be some sort of effect on the RM costs.

Thank you, sir.

Thank you so much. I'll just join back today.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question comes from the line of Nalin Shah at NVS Brokerage. Please go ahead.

At the outset, I think I would like to congratulate the management for the excellent performance turned out in the year FY26 vis-a-vis FY25. I have some couple of questions which are very broad in nature. One is that I would like to, because you are expanding and I think growing at a much faster rate, so it's very, very exciting for the shareholders and investors. So can you give us some big idea about where do we see ourselves in next three to five years, say 2030, normally people are giving estimates, by 2030 we'll be a 10,000 crore company or something, whatever. So if you can give us some rough idea about that, that is my first question. Secondly, I think, you know, the defense is one sector which is attracting a lot of attention. If you can give us some overall good idea about how, you know, what are the, you know, I mean, the stages, how you are going to, I mean, go towards commercial production, and what is going to be, you know, your first full year of operations, what is the kind of top line and bottom line you feel that you will be contributing to the overall, I think, business of the company? So that will give us some real good idea about the contribution or the, you know, I mean, this thing from the defense sector, please.

So, as you said, we target 2030 at 20,000 crores of top line, and we are working hard on that to achieve the same.

20,000 crores?

Yeah, that is our target, but God willingly, everything goes in a smoother way.

That is something amazing, amazing. Excellent.

We are trying to work hard on it, and we are sure that we can achieve that. Wonderful. Secondly, for this defense sector, 12 months, only if you see, then first 12 months would be around 300 to 400 rows of top line. And bottom line would be around 170 to 180 of pet.

That is pet, you are saying? Yes. Okay, so can we presume that in March, I mean, April 27 to March 28, first full year of production, we will be having somewhere around 400 crore turnover and 170, 180 crore bottom line?

Yeah, bottom line I am including depreciation also because it is just on the books, but the cash will be there.

Okay. So, otherwise, even if you take out the depreciation also, I am talking about Pat, so even if you take out the depreciation, you should be somewhere around what, 130 cross? Yeah. More than that. Yeah? More than that. Oh, that is something excellent. I must congratulate and wish you all the best.

Thank you, sir. Thank you.

Participants, if you wish to ask a question, please press start and watch. Thank you.

Thanks once again for the opportunity. My question is regarding the order book. Like, what sort of order book traction are we seeing from the Middle East side, especially from the Massa JV that we did?

India is on a slow track as of today. There are certain projects which are being deleted by the government, and it should pick up by second half or third quarter of this year. Once it comes into motion, then there are certain projects which we have already, we are working on, that might come into the form of order for us, and it will take its power.

Okay, I understand.

Thank you. A reminder to all participants that you may press star and 1 to ask a question. The next question comes from the line of Shreya Bhatia, an individual investor. Please go ahead.

Yeah. Hi, sir. Good afternoon. Thank you for the opportunity. So, I have a couple of questions. So, firstly, just can you give some light on what are your plans to scale up the export business going forward, like in the next upcoming year, FI27?

Hello. Yeah, good evening. So, we are already scaling up our manufacturing facility, and we have been ordering a lot of machinery which are automated. So, this would help us to give us an operational efficiency, and region-wise also, our order book is on an increasing trend, wherein month-on-month, it's going beyond our last month's target of order. So, it's an upward trend because our regions are also opening, and apart from that, our operation efficiency is also improving. So, this is helping us to scale up our export business.

Okay, that is quite helpful, sir. And so, just one more question. Can you help me understand, like, what are your core engineering business margins while we compare it with the EPC margins? What is the difference in the margins of these two verticals?

Ma'am, we just mentioned, Mr. Sanjay just mentioned that individually and my finance team also mentioned that it's a blend because a lot of our engineering products already are used in our EPC business as well. So you, it's a mix of the companies there. So it is difficult for us to give you on paper. Okay, okay.

Thank you so much, and all the very best. Thank you.

For Sabir, we got to start. We should have mentioned.

Okay, sir.

Start.

Okay, got it.

Thank you. The next question comes from the line of Maitrisha with Crown Capital. Please go ahead.

Yeah, hello. Good afternoon. Am I audible?

Yes, you are.

Yeah, firstly, on the defense side, what sort of EBITDA margins are we targeting here once the scale-up kind of starts from 4Q onwards? And what sort of margins can we scale up to in this sector at the WAX peak level?

Already replied now, it means somebody for me, just ask.

I'm sorry, I wasn't in the call. Could you repeat the margins and the difference?

Margin you can count around 35% PAT.

33% PAT?

Yes.

Okay, got it. And we'll be able to do that immediately once we start scaling up 4QFS27? Got it. And on the blended engineering and the EPC side, so currently for this year we had no defense revenue and we were at a 13% margin. Do you see any more scale-up?

Defense was not good.

Correct, correct. So, going forward, barring your defense business, what margins are you expecting from the other verticals, state operational efficiency, and more better project management coming in?

Overall, we are predicting 2-12% only, but we have to get better money. I'm talking about 12.

Got it, got it.

All right.

Got it, got it. And on the, once you post this, any other CAPEX are we planning for FY28? As of now, no. No CAPEX, okay. Yeah, okay, that is it for my side. Thank you.

Thank you. The next question comes from the line of Aniket Madhwani, which is Depthrade Capital. Please go ahead.

Yeah, I don't know. Yes, sir. Yeah, so, as you mentioned, you will be stocking around 20,000 crore's top line in 2030.

So, I just wanted to understand the role.

You see the current baseline of 1,000 crores you have achieved in March 2026. So, you must grow around 100% for the next four years to achieve 20,000 crores in FI 30. And you mentioned that you will be achieving around 30 to 40% next year. If you consider that, it would be, I mean, that 100 crore, sorry, 100 percent caeger will rise to 150 percent caeger. So, I just want to understand, I mean, how would it be possible to, you know, get this number?

So whatever verticals we are working right now, you may say infrastructure, manufacturing, defense, and other projects are going in school scale. We are targeting 20K, let us see where we reach. But we are sure we will reach nearly to that level.

What am I trying to understand? If you even get closer to that, I just want to go to that. I mean, what expansion are you planning?

That will be giving you ear on ear.

Don't worry about that.

It will be told.

I think the utilization you will be doing in this financial year for the second session, and for the engineering segment as well, so as you expand it.

Aniket, your voice is ringing. Aniket, I would request you to please use your headset, and also there's a lot of background disturbance from here.

I was just asking, what is the current level of strategic utilization as you have recently expanded in the

engineering segment and the

expected utilization rate for the different segment as well by the end of FF27?

Give me your voice to sketchy. I hate your voice is sketchy. It's not coming right.

Hello, am I audible now?

Yes.

I have just asked the utilization rate for the engineering segment as on date and the expected utilization rate for the defense segment by the end of the financial year, 27.

So you were saying for the capacity utilization of the plant and the water establishment is coming for the defense, correct? It's already informed that the ramp-up, the facility, the new install for the engineering and all will get speed up and fully operational in the next two years. And for the defense, it has already informed that by this financial year 27, it will be going to produce... From the next year, it will be starting fully utilization of the defense segment also.

Thank you. Ladies and gentlemen, that was the last question for today's con-call on behalf of Tembo Global Industries Limited that concludes this conference. Thank you for joining us, and in case of any further queries, please reach out to Tembo's investor relation team at cs.tembo.in. You may now disconnect your lines. Thank you.