Prostarm Info Systems , a leading player in power solutions and energy storage equipment, has reported its financial results for the second quarter of fiscal year 2026, showcasing resilience in the face of market challenges.

Q2 FY26 Performance Highlights

Prostarm Info Systems reported a total income of INR 659.00 million for Q2 FY26, marking a significant 20% sequential growth from the previous quarter. However, this figure represents a 33.1% year-on-year decline compared to Q2 FY25, which the company attributes to a high base effect from large one-time orders in the previous year.

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2 FY26 stood at INR 113.00 million, with an EBITDA margin of 17.15%. While this indicates a decline from the 20.81% margin in Q2 FY25, it shows a substantial improvement from the 7.29% margin in Q1 FY26.

Profit After Tax (PAT) for Q2 FY26 was INR 83.00 million, representing a PAT margin of 12.59%. This demonstrates a remarkable sequential growth of about 350% compared to Q1 FY26's PAT of INR 18.00 million.

H1 FY26 Performance

For the first half of FY26, Prostarm Info Systems reported:

While these figures show a decline from H1 FY25, the company has managed to improve its PAT margin from 7.59% in H1 FY25 to 8.36% in H1 FY26, indicating enhanced operational efficiency.

Key Developments

1. Order Book Strength: Prostarm secured multiple notable orders during Q2, including:

   • Maharashtra State Police CCTNS project
   • A major UPS-rental and transformer order from Electronics Payments & Services
   • A large Battery Energy Storage System (BESS) project from Karnataka Power Transmission Corporation Limited (KPTCL)

2. Balance Sheet Improvement: The company significantly reduced its debt position:

   • Long-term debt decreased from INR 34.00 million in March 2025 to INR 10.00 million in H1 FY26
   • Short-term debt sharply declined from INR 638.00 million to INR 152.00 million over the same period

3. Regulatory Closure: Prostarm achieved regulatory closure on a customs matter, with the Commissioner of Customs issuing a favorable order on July 29, 2025, resulting in the complete dropping of a Show Cause Notice.

4. Expansion Plans: The company is on track with its growth initiatives:

   • The 1.2 GWh Jhajjar BESS facility is nearing commissioning
   • Implementation of SAP B1 and Salesforce is underway
   • Launch of lithium-based BESS for the Commercial and Industrial segment
   • Plans to introduce a full range of Home Energy Storage System (ESS) solutions

Market Outlook

The Indian power inverter market, valued at USD 6.00 billion in 2024, is projected to reach USD 22.00 billion by 2034, growing at a CAGR of 15%. This growth is driven by increasing demand for backup power, renewable energy adoption, and supportive government policies.

The Indian Battery Energy Storage System (BESS) market is expected to grow from under 0.2 GW to 66 GW by 2032, with an investment potential of INR 5,000.00 billion. This sector is crucial for managing intermittency in renewable energy sources and ensuring grid stability.

Management Commentary

While specific management quotes were not provided, the company's focus on expanding its BESS capabilities, reducing debt, and improving operational efficiency indicates a strategic approach to navigating market challenges and capitalizing on growth opportunities in the power solutions and energy storage sectors.

Prostarm Info Systems' performance in Q2 FY26 demonstrates its ability to adapt to market conditions and maintain profitability despite revenue pressures. The company's strong order book and strategic initiatives position it well for future growth in India's evolving power and energy storage landscape.

Prostarm Info Systems Limited (PISL), a leading player in the energy storage and power conditioning equipment sector, has received a significant boost to its financial credibility. CARE Ratings Limited has assigned a CARE A- (Stable) rating to the company's bank facilities worth ₹200 crore, reflecting its strong financial position and growth prospects.

Rating Details

The ratings assigned by CARE Ratings are as follows:

Key Strengths

The rating agency has highlighted several key strengths that contributed to PISL's favorable rating:

1. Experienced Promoters: The company benefits from promoters with extensive experience in the power solutions industry.
2. Established Track Record: PISL has built a strong reputation with a diverse clientele across various sectors.
3. Healthy Profitability: The company has maintained stable profitability with PBILDT margins ranging from 11.75% to 13.75% over the past three years.
4. Strong Order Book: As of September 2025, PISL has an order book of approximately ₹1,100 crore, providing medium-term revenue visibility.
5. Comfortable Financial Risk Profile: The company's overall gearing stood at 0.66x as of March 31, 2025, with comfortable debt coverage indicators.

Recent Developments

PISL successfully completed its Initial Public Offering (IPO) in June 2025, raising net proceeds of ₹144 crore. This has significantly strengthened the company's net worth and is expected to improve its overall gearing to below 0.25x by March 31, 2026.

Financial Performance

The company's consolidated financial performance has shown steady growth:

Industry Outlook

PISL operates in the capital goods sector, specifically in the electrical equipment industry. The company's focus on energy storage and power conditioning equipment positions it well in a growing market driven by increasing demand for reliable power solutions across various sectors.

Challenges

Despite its strong position, PISL faces some challenges:

1. Working Capital Intensity: The company's operations are inherently working capital-intensive, with gross current asset days of 217 in FY2025.
2. Competitive Industry: PISL operates in a highly competitive and fragmented industry, which may pressure margins.
3. Negative Cash Flow from Operations: The company reported negative cash flow from operations of ₹3.79 crore in FY2025, primarily due to the working capital-intensive nature of its business.

The CARE A- rating reflects Prostarm Info Systems' established market presence, strong order book, and improved financial profile post-IPO. However, the company will need to manage its working capital requirements effectively and navigate the competitive landscape to maintain its growth trajectory.