Exicom Q1 FY26: Is This Telecom & EV Stock's Dip a Hidden Opportunity?
Exicom Tele-Systems Limited, a key player in India’s telecom infrastructure and electric vehicle charging space, has unveiled its Q1 FY26 results. The quarter presented a mixed bag, with one segment facing headwinds while the other continued its robust growth trajectory. As we dissect the numbers, the focus remains on understanding the underlying drivers and what they signal for the company’s future earnings potential.
The market has recently seen a July correction after a strong Q1 rally, largely driven by cautious guidance and some weak earnings. Exicom’s performance, particularly in its traditional Critical Power segment, seems to echo this broader market sentiment. However, a deeper dive reveals strategic investments and a dynamic EVSE segment that could position the company for a stronger future.
Order Book & Future Sales Visibility: A Tale of Two Segments
While Q1 FY26 saw some revenue shortfalls, the company’s forward visibility looks promising, particularly for its Critical Power segment.
Critical Power Segment: Backlog as a Silver Lining Exicom reported a strong order backlog of over ₹1500 Cr as of July 1st, with approximately ₹1200 Cr earmarked for hardware supply. This is a crucial indicator, as it suggests that despite the revenue dip in Q1, there’s a significant pipeline of business ready to convert into sales in the coming quarters, particularly for FY26.
This substantial backlog addresses immediate concerns about the segment’s slowdown. The company explicitly states this backlog is “expected to result in strong revenue in FY26.” This aligns with a forward-looking market perspective, where future potential often outweighs current quarter’s blips, especially if the reasons for the dip are temporary.
Sales Performance: Navigating the Tides
Q1 FY26 revenues for Exicom tell a story of contrast between its two core segments, influenced by market dynamics and strategic decisions.
| Metric | Q1 FY25 (Cr) | Q4 FY25 (Cr) | Q1 FY26 (Cr) | QoQ Change (%) | YoY Change (%) |
|---|---|---|---|---|---|
| Standalone Revenue | 243.3 | 212.8 | 150.7 | -29.2% | -38.1% |
| CP Revenue (Standalone) | 210.6 | 157.7 | 97.8 | -38.0% | -53.5% |
| EVSE Revenue (Standalone) | 32.7 | 55.1 | 52.8 | -4.1% | +61.5% |
| Consolidated Revenue | 252.1 | 265.5 | 205.3 | -22.7% | -18.6% |
| CP Revenue (Consolidated) | 214.8 | 162.3 | 102.5 | -36.8% | -52.3% |
| EVSE Revenue (Consolidated) | 37.3 | 103.2 | 102.8 | -0.4% | +175.6% |
Critical Power (CP) Segment: Facing Headwinds The Critical Power segment experienced a significant revenue decline, both on a sequential (-38.0% standalone, -36.8% consolidated) and year-on-year basis (-53.5% standalone, -52.3% consolidated). This slowdown was attributed to:
- Market Consolidation: Slowing new investments and reduced demand for telecom infrastructure.
- Capex Deferrals: Telecom companies’ heavy capital expenditure on 4G to 5G network upgrades, leading to a deferment in the traditional capex cycle.
- Project Delays: Delays in approvals and monsoon impacts on Bharat Net and other key projects, alongside battery project deliveries shifting from Q1 to Q2.
While the CEO acknowledged that Q1 performance “fell short of expectations” due to these delays, the strong order backlog (₹1500 Cr) for the segment provides a cushion. This suggests that the issues faced were more about timing and market cycles rather than a fundamental erosion of demand. For this segment, Exicom seems to be in a cyclical trough, with signs pointing to a recovery as projects clear.
EVSE Segment: Electrifying Growth Momentum In stark contrast, the EVSE segment continued its impressive growth trajectory. Although standalone revenue saw a marginal QoQ dip (-4.1%), the consolidated EVSE revenue remained largely stable QoQ (-0.4%), standing at ₹102.8 Cr. More importantly, this represents a phenomenal 175.6% YoY growth (consolidated).
This robust growth is fueled by:
- Surging E-Car Demand: Driven by new EV model launches by leading Indian OEMs in the premium SUV segment.
- E-Bus Adoption: Gaining momentum from the PM e-Bus Sewa scheme, backed by the Payment Security Mechanism, enabling faster state-level deployments.
- Favorable Policy Incentives: Schemes like PM E-DRIVE (for 2W/3W/buses) and SPMEPCI (slashed import duties for EV manufacturing) are providing significant tailwinds, boosting demand for DC High Power chargers.
The EVSE segment’s performance aligns perfectly with India’s domestic-growth theme and government push for infrastructure, reflecting strong volume growth in a nascent but rapidly expanding market. The CEO’s confidence in “strong momentum in EV sales in India” appears well-founded.
Key Business Metrics: Signs of Operational Efficiency Amidst Investments
Beyond just sales, a look at key operational metrics gives us a better picture of Exicom’s underlying health.
- Gross Margin Improvement: A notable positive is the improvement in gross margins. Standalone gross margin jumped from 21.3% in Q4 FY25 to 32.7% in Q1 FY26. Consolidated gross margin also increased from 34.2% to 39.4%. This indicates better cost management or a more favorable product mix, which is crucial for future profitability.
- New Tower Installations (Critical Power): While the total cumulative towers grew by 3.5% YoY, the quarterly new tower installations declined by 26.1% QoQ, reinforcing the slowdown narrative in this segment.
- EVSE Monthly Sales: The consistent monthly sales exceeding 13,000 units for four consecutive months for EVSE products underscores the strong and sustained demand in this sector.
- Tritium Commercial Traction: The acquisition of new customers and USD 8M in bookings for Tritium, including repeat orders from major US fleet operators, show signs of progress in integrating this strategic investment, though the CEO noted its turnaround was “slower.”
- Strategic Expansion: Entry into the electric trucking segment (240 kW DC charging), a Global Framework Agreement for EV chargers across Southeast Asia, and onboarding a leading global luxury carmaker for home chargers highlight Exicom’s proactive approach to market expansion and diversification within EVSE.
- Hyderabad Plant Progress: The new integrated manufacturing plant in Hyderabad is on track, with a Start of Production (SOP) targeted for October 2025. This critical expansion will significantly boost future capacity and operational efficiency, especially for the high-growth EVSE segment.
Earnings Analysis: The Impact of Strategic Moves
Exicom’s Q1 FY26 profitability figures, particularly on a consolidated basis, were significantly impacted by strategic and one-off items.
| Metric | Q1 FY25 (Cr) | Q4 FY25 (Cr) | Q1 FY26 (Cr) | QoQ Change (%) | YoY Change (%) |
|---|---|---|---|---|---|
| Standalone Adjusted EBITDA* | 29.2 (12.0%) | 10.9 (5.1%) | 12.6 (8.4%) | +16.4% | -56.8% |
| Standalone Adjusted PAT* | 8.9 (3.7%) | 4.6 (2.1%) | 1.1 (0.7%) | -76.0% | -87.6% |
| Consolidated Adjusted EBITDA* | 26.0 (10.3%) | -17.3 (-6.5%) | -38.6 (-18.8%) | -123.0% | -248.5% |
| Consolidated Adjusted PAT* | 18.2 (7.2%) | -62.3 (-23.5%) | -71.1 (-34.6%) | -14.1% | -490.7% |
* Adjusted for foreign currency transaction/translation loss for EBITDA and Exceptional Items for PAT.
Exceptional Items: The Elephant in the Room The major story impacting profitability, especially consolidated PAT, revolves around “Exceptional Items.” For Q1 FY26, these include payouts for a Voluntary Retirement Scheme (VRS) in India and redundancy/retention costs paid to Tritium employees. These one-off costs significantly weighed down the reported Profit After Tax (PAT).
- Standalone Profitability: While Adjusted EBITDA improved QoQ, Adjusted PAT plummeted by 76% QoQ. This indicates that while core operational profitability might be stabilising, these exceptional costs hit the bottom line hard.
- Consolidated Profitability: The consolidated figures paint a bleaker picture, with both Adjusted EBITDA and PAT remaining negative and worsening QoQ. This is largely due to the continued integration challenges and associated costs of the Tritium acquisition, coupled with the Q1 exceptional items.
Segment Profitability:
- The Critical Power segment remains profitable at the segment result level, albeit with reduced profits due to lower sales.
- The EV Charger segment continues to incur losses at the segment result level, reflecting the significant investments in R&D, market expansion, and the ongoing integration of Tritium. This is typical for a fast-growing, high-investment phase where the company is building out capacity and market share.
Company Classification: Given the mixed performance and the substantial investments in the high-growth EVSE segment (including the Tritium acquisition and Hyderabad plant), Exicom Tele-Systems can be classified as a “Fast Grower” currently in a crucial “Investment and Turnaround” phase. The company is sacrificing short-term profitability for long-term growth and market dominance in the rapidly expanding EV sector, while navigating cyclical challenges in its traditional segment.
Capital Expenditure & Financing: Fueling Future Growth
Exicom’s strategic initiatives, particularly in expanding its manufacturing footprint and integrating acquisitions, are reflected in its capital expenditure and financing activities.
CapEx for Growth: The ongoing development of the Hyderabad manufacturing plant is a clear indicator of growth-oriented CapEx. With an SOP targeted for October 2025, this plant is set to significantly enhance production capacity, especially for EV chargers, positioning Exicom to capitalize on the surging EV demand. The majority of the IPO funds allocated for this plant (₹151.47 Cr) are expected to be utilized by the end of September 2025, suggesting a rapid ramp-up.
IPO and Rights Issue: Strategic Funding Exicom has actively managed its capital structure to fund these ambitious plans:
- IPO Funds: Of the ₹400 Cr raised, ₹291.82 Cr has been utilized as of June 30, 2025. Funds have been deployed towards the Hyderabad plant, repayment of working capital, incremental working capital, and R&D – all crucial for operational stability and future innovation. The remaining ₹108.18 Cr provides flexibility.
- Rights Issue: A recent Rights Issue of ₹260 Cr aimed at:
- Repaying debts (₹55 Cr), improving the balance sheet.
- Converting promoter loan into equity (₹106.8 Cr), simplifying the capital structure.
- Investing in Tritium (₹85 Cr), further integrating and supporting this strategic acquisition.
These financing activities demonstrate a clear intent to strengthen the balance sheet, reduce debt, and provide the necessary capital for the ambitious growth plans, particularly around the EVSE segment and the Tritium turnaround. The slight dilution of promoter shares (from ~69.5% to ~66.5% post-Rights Issue) is a minor consequence of broad-based funding.
Key Takeaways for Investors
Exicom Tele-Systems’ Q1 FY26 results present a nuanced picture for investors:
- Mixed Segment Performance: While the Critical Power segment faced expected cyclical challenges and project deferrals, its substantial order backlog provides strong revenue visibility for FY26. This segment will likely improve as projects pick up post-monsoon and approvals clear.
- EVSE as the Growth Engine: The EVSE segment is a standout performer, aligning perfectly with India’s domestic growth themes and government support for EVs. Its consistent growth, strategic new customer wins, and global expansion indicate significant future potential.
- Profitability Impacted by Strategic Investments: The reported losses, especially consolidated, are heavily influenced by “Exceptional Items” related to restructuring and the ongoing integration of Tritium. Investors should differentiate these one-off costs from core operational performance. As these costs subside and Tritium’s turnaround gains pace, consolidated profitability should improve.
- Forward-Looking Investments: The substantial CapEx on the Hyderabad plant and the strategic utilization of IPO and Rights Issue funds underscore Exicom’s commitment to building long-term capacity and market leadership in the EV ecosystem. This positions the company as a fast-grower actively investing in its future.
- Watch for Q2: The CEO’s remarks about Bharat Net deliveries and battery project deferrals from Q1 to Q2 suggest that the next quarter could see a rebound in the Critical Power segment’s revenue, adding to the EVSE momentum.
In summary, Exicom Tele-Systems is currently navigating a period of significant strategic investment and restructuring, reflected in its Q1 FY26 profitability. However, the strong order backlog, the explosive growth in its EVSE segment, and its clear path for capacity expansion suggest that the company is well-positioned to capitalize on India’s burgeoning EV market and a potential recovery in telecom infrastructure spending. For long-term investors, the focus should be on the company’s ability to convert its strong order book into sales, improve profitability as investments mature, and fully integrate its strategic acquisitions.
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