Servotech's capacity timeline slipped by 18 months; order book language also shifted
The company promised a new plant by Jan 2025; now construction is just starting. The order book is no longer 'firm on paper' after earlier citing ₹600 cr in hand.
What's new
- Q1FY27 consolidated revenue ₹216 cr, up 57.7% YoY; EBITDA ₹20.9 cr, up 93.4%.
- Battery production capacity fully utilized; target to double capacity in 6 months, triple by Mar '27, 10x in 2 years.
- Channel partner expansion across South, North and Northeast India.
- BEE 5-star ratings for 60kW and 120kW chargers; 240kW certification in process.
Themes from the call
Capacity
Battery capacity is fully utilized, capping near-term revenue; the Haryana plant is only now starting construction despite a prior promise of operational status by Jan 2025.
Margins
Consolidated EBITDA grew 93.4% against revenue growth of 57.7%, but management gave no margin bridge and refused to provide a FY27 margin target.
Capital allocation
Expansion will be funded mostly by debt; management aims to keep the debt-equity ratio within limits and grow profits and net worth.
Guidance watch
- BSS capacity: double in 6 months, triple by Mar '27, 10x in 2 years — but no timeline for Haryana plant completion.
- FY27 revenue and margins: directional only, year-on-year improvement with H2 stronger than H1; no numerical range.
- Servotech Sports for Entertainment: expected long-term profitability after IP investment; no timeline.
Risk flags
- Capacity bottleneck persists; average utilization across lines is only 50-60%, but battery pack line is fully stretched.
- Order book visibility has been recast: channel model means less formal PO evidence, making revenue estimation harder for investors.
- Management refused to disclose absolute BSS capacity, FY27 revenue split, or quantified capex for the 10x capacity target.
Key quotes
-
"We want to double the current capacity within the next 6 months. We will triple the capacity before March 31, 2027. Our target is to reach 10x capacity in the next 2 years."
— Raman Bhatia, Managing Director -
"In that model, you do not have a firm order book on paper, but given the scenario... the order book becomes very strengthened."
— Servotech management, Jul 2026 -
"The new manufacturing facility will be fully operational before January 2025."
— Servotech management, Oct 2024
The brief
Servotech's Q1 numbers are strong: revenue up 58%, EBITDA up 93%. But the call was dominated by a capacity constraint that the company itself created. In October 2024, management promised a new plant would be running by January 2025. Eighteen months later, they said construction on a Haryana plant is 'now starting'. The delay was not explained. The same gap between past and present shows up in the order book. Earlier calls cited over ₹600 crore of firm orders. Now management says the channel-partner model does not produce a 'firm order book on paper'. Orders are getting smaller. Both contradictions are material. On the positive side, demand is real: battery capacity is fully utilised, and management has laid out a clear scaling plan: double in six months, triple by March 2027, 10x in two years. But no capex number, no completion date for the new plant, and no revenue guidance for FY27. Margins are improving, but management refused to set a target. The takeaway is that Servotech is growing fast but operating on trust. The promises that built that trust are fraying.
Servotech's capacity bottleneck is real, but the bigger problem is the gap between what management said before and what it says now.