Isgec Heavy Engineering Limited has successfully completed the sale of a 25% stake in its joint venture, Isgec SFW Boilers Private Limited, to Sumitomo SHI FW Energia Oy for ₹4 crore. The transaction, finalized on June 25, 2026, reduces the company's shareholding in the joint venture from 51% to 26%. Consequently, Isgec SFW Boilers has ceased to be a subsidiary of Isgec Heavy Engineering Limited and has been reclassified as an associate company. The joint venture will continue to operate as a partnership between Isgec Heavy Engineering Limited and Sumitomo SHI FW Energia Oy.

The agreement for the sale of 5,00,000 equity shares was initially signed on May 08, 2026. The completion of this transfer marks a strategic shift in the company's investment structure while maintaining the joint venture relationship with the Finnish partner. The consideration of ₹4 crore was received for the transfer of the shares, representing 25% of the paid-up share capital of the target company.

Financial Impact of the Joint Venture

For the financial year ended March 31, 2025, Isgec SFW Boilers Private Limited contributed marginally to the consolidated financials of Isgec Heavy Engineering Limited. The joint venture's turnover and net worth represented a small percentage of the consolidated totals.

Transaction Details

The sale was executed pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The buyer, Sumitomo SHI FW Energia Oy, is an existing joint venture partner and does not belong to the promoter or promoter group of Isgec Heavy Engineering Limited. The transaction was not classified as a related party transaction and was conducted at arm's length.

The expected date of completion for the sale was initially set for June 30, 2026, but the transfer was concluded ahead of schedule on June 25, 2026. The requisite details regarding the transaction were disclosed in accordance with SEBI Circular No. H0/49/14/14(7)2025-CFDPD2/1/3762/2026 dated January 30, 2026.

Isgec Heavy Engineering Limited reported a standalone net profit of ₹3,467.5 crore for the financial year ended March 31, 2026, compared to ₹2,937.4 crore in the previous year. Revenue from operations for FY26 stood at ₹52,286.3 crore, up from ₹50,182.6 crore in FY25. The Board of Directors has recommended a dividend of ₹6 per equity share of ₹1 each for the financial year 2025-26, subject to shareholder approval. The company disclosed an investor presentation for Q4 and FY26 on May 29, 2026, highlighting a robust order book of ₹79,840 crore as on March 31, 2026.

Financial Performance

The company's profit before tax for the year increased to ₹4,549.1 crore from ₹3,883 crore in the prior year. For the quarter ended March 31, 2026, revenue from operations was ₹16,748 crore, with a net profit of ₹1,006.2 crore. Statutory auditors M/s. SCV & Co. LLP submitted an audit report with an unmodified opinion on the standalone and consolidated financial results.

Strategic Decisions

The Board approved a capital expenditure of ₹25 crore towards capacity addition for the Steel Castings division at its Muzaffarnagar factory. This investment aims to add an additional 1,100 metric tons of steel castings per annum by June 2027, funded through internal accruals. Additionally, the Board sanctioned the issuance of corporate guarantees not exceeding ₹6,550 crore in favour of banks for its joint venture and subsidiary, Isgec Titan Metal Fabricators Private Limited, to facilitate additional working capital limits.

Segment Performance

The Industrial Projects segment led revenue generation, reporting ₹36,643 crore for the year, while the Manufacturing of Machinery and Equipment segment contributed ₹19,268 crore. The company also revised the composition of its Committee of Directors, inducting Mr. Rajiv Roy Chaudhury to evaluate options for future organic and inorganic growth.

Outlook and Commentary

Management provided guidance for FY27, expecting standalone revenue to increase by 10% to 12%. The opening order book for the year is approximately ₹7,000 crore, excluding cancelled orders worth ₹550 crore. In the first two months of the current quarter, the company booked new orders totaling ₹1,400 crore. Export revenue for FY26 increased to ₹1,169 crore, representing 22% of total revenue, up from ₹532 crore in the previous year. Management expects this increased level of exports to continue, supported by a weaker Indian rupee and strong inquiry pipelines in domestic and export markets.