Servotech Renewable Power System reported robust financial growth for the first quarter ended June 30, 2026, with consolidated revenue rising 57.69% to ₹21,629.41 lakh. The company’s net profit surged 74.51% to ₹794.10 lakh, reflecting strong demand in renewable energy solutions and efficient cost management. Managing Director Raman Bhatia highlighted that the results stem from disciplined execution and expanding channel partnerships across India, particularly in South, North, and North-East regions.

Consolidated Financial Performance

The company delivered broad-based growth across key operational metrics. EBITDA grew by 93.35% to ₹2,094.33 lakh from ₹1,083.18 lakh in the corresponding period of the previous year, with EBITDA margin expanding to 9.44% from 7.59%. Profit before tax increased by 61.58% to ₹1,061.61 lakh, while gross profit rose by 86.75% to ₹4,856.09 lakh.

Standalone Results

On a standalone basis, total revenue grew 66.31% to ₹20,811.19 lakh from ₹12,513.59 lakh in the same quarter last year. Standalone profit after tax increased 47.01% to ₹1,110.06 lakh, while EBITDA rose 62.85% to ₹2,317.67 lakh.

Strategic Developments and Capacity Expansion

During the quarter, Servotech secured a major rooftop solar order from South Central Railway and signed a memorandum of understanding with the Government of Haryana to expand manufacturing capacity. The company also received a 900 kilowatt battery energy storage system (BESS) order from Uttar Pradesh. Bhatia disclosed that current BESS production capacity is fully utilized, prompting plans to double capacity within six months, triple it by March 21, 2027, and achieve a tenfold increase in production capacity over the next two years. He clarified that this refers to production volume, not capital expenditure.

Board Appointments and Subsidiary Update

The Board approved the resignation of Mr. Digvijay Kapoor as Executive Director (Human Resources) effective July 23, 2026, due to personal reasons. Mr. Mrityunjay Jha was appointed as Additional Director (Executive Director – Administration) effective July 24, 2026, subject to shareholder approval. Regarding its subsidiary, Servotech Sports & Entertainment, Bhatia confirmed it was not profitable in the quarter, noting it operates as an event management company and owns cricket team franchises and Dream League of India.

What the Numbers Show

The significant divergence between gross profit growth (86.75%) and revenue growth (57.69%) indicates improving operational leverage and product mix optimization. The aggressive BESS capacity expansion plan, coupled with fully utilized current facilities, suggests the company is positioning itself to capture anticipated tailwinds from government initiatives like PM Surya Ghar Yojana and EV infrastructure rollout. Management’s focus on debt financing for expansion, while maintaining a stable debt-equity ratio, signals confidence in future cash flows to service obligations.

Servotech Renewable Power System has uncovered a fraud involving two of its employees and an external party. The fraudulent activity pertains to the unauthorized removal of inventory and the creation of fake tax invoices, raising serious concerns about internal controls and financial integrity within the organization.

Nature of the Fraud

The fraud detected at Servotech Renewable Power System involves two key elements that point to a coordinated scheme between internal and external actors. The key details of the fraud are outlined below:

The involvement of both internal employees and an external party suggests a deliberate and coordinated effort to circumvent the company's inventory and financial controls. The use of fake tax invoices further indicates an attempt to misrepresent financial transactions.

Key Highlights

• Unauthorized Inventory Removal: Company inventory was removed without proper authorization, pointing to a breach in inventory management and oversight processes.
• Fake Tax Invoices: Fraudulent tax invoices were generated, indicating potential financial misreporting and tax-related irregularities.
• Internal-External Collusion: The scheme involved two employees working in conjunction with an external party, suggesting a coordinated effort to exploit internal processes.

Implications for the Company

The discovery of this fraud underscores the importance of robust internal audit mechanisms and vigilant compliance frameworks. The involvement of both employees and an external party highlights vulnerabilities in Servotech Renewable Power System's inventory management and invoicing processes. The company's disclosure of this matter reflects its commitment to transparency with stakeholders regarding material developments that may impact its operations and financial standing.