Megatherm gave two capex figures in one call. The numbers don't match.
Management first put near-term capex at ₹20 crore, then agreed it was ₹5-10 crore over two years. The ₹425-450 crore FY27 revenue guidance stands.
What's new
- Management cited ₹20 crore for a new transformer shed, then agreed with an analyst that near-term capex is ₹5-10 crore over two years.
- A ₹80-85 crore transformer order book is now in delivery, and a fourth transformer facility needs ₹20 crore capex.
- FY27 revenue guidance of ₹425-450 crore and a 5-6 year target of ₹1,000 crore were reiterated.
Why this matters
The discrepancy isn't rounding. A ₹20 crore shed versus ₹5-10 crore total over two years is a factor-of-four gap. For a company scaling its transformer business to a ₹150 crore capacity, the capex path is the first check on whether the revenue target is credible.
What we're watching
- Which capex figure the board approves in the next capital-allocation update.
- Whether the ₹80-85 cr order book translates into the promised ₹150 cr capacity.
- Timing for the fourth transformer facility—management declined to specify.
The full read
Megatherm Induction gave two capex numbers on its June 2 call, and they don't line up. Management first cited ₹20 crore for a new transformer shed. An analyst then pushed for total near-term capital spending, and management agreed the figure was ₹5-10 crore over two years. That's not a rounding difference. It is a factor-of-four gap on the very spending plan that underpins the ₹150 crore capacity target. The ₹80-85 crore order book is real, and deliveries are underway, but the capex trail is what validates the rest of the story. A fourth facility needs another ₹20 crore, yet management wouldn't say when it will be built. The ₹425-450 crore FY27 guidance and the ₹1,000 crore five-year target still stand, but the capex contradiction is the first question any model will need to resolve.
Questions answered
- Why did Megatherm give two different capex numbers?
- Management initially said ₹20 crore for a new transformer shed. Later, when an analyst pressed for total near-term spending, it agreed the number was ₹5-10 crore over the next two years. The call summary does not reconcile the two.
- What is the FY27 revenue target?
- Megatherm is guiding ₹425-450 crore for FY27, with a longer-term goal of ₹1,000 crore in 5-6 years driven by the transformer business.
- What is the current transformer order book?
- The company has secured ₹80-85 crore in transformer orders, with deliveries underway after vendor approvals were secured.
- What is the fourth transformer facility?
- It is a planned expansion that management says will require ₹20 crore in capex. The call summary provides no timeline for completion or commissioning.