Servotech hits record Q4 revenue; margins expand to 12%
Revenue jumps 67% to ₹211 cr, driven by solar inverters and EV chargers. A structural margin shift is underway, but ₹243 cr in receivables remains a watch item.
What's new
- Record Q4 revenue of ₹211 crore, 67% YoY growth.
- Structural margin expansion to 12% in H2, driven by product mix.
- Completed ₹64 crore capex program; targeting >50% retail revenue by FY27.
Why it matters
Servotech is successfully pivoting from low-margin commoditized products to higher-margin solar inverters, BESS, and DC fast chargers. The margin inflection is real, but the ₹243 crore receivables pile suggests working capital discipline hasn't caught up yet. Management's focus on cash flow is the right next test.
What we're watching
- Whether operating cash flow turns positive in FY27.
- Receivable days — any reduction from the current elevated level.
- Retail channel ramp: >50% revenue by FY27 is an ambitious shift.
The full read
Servotech closed FY26 with a record Q4 — ₹211 crore in revenue, up 67% YoY — and more importantly, a structural margin lift. H2 margins hit 12%, driven by a deliberate shift toward solar inverters, battery energy storage systems, and DC fast chargers, away from low-margin LED lighting. A ₹64 crore capex cycle is now behind the company, and management is targeting retail channels to account for over half of revenue by FY27, which could also ease working capital. The caveat: receivables sit at ₹243 crore, and the call made clear the immediate priority is positive operating cash flow, not just top-line growth. If Servotech can collect faster while maintaining margin momentum, the earnings quality improves materially. If it can't, the margin story has a ceiling.