Harsha Engineers Delivers ₹1,444 Cr Revenue in FY26, Eyes Double-Digit Growth

Harsha Engineers International has reported a consolidated engineering revenue of ₹1,444 crore for the fiscal year 2026, an increase from ₹1,269 crore in FY25. The company has projected double-digit top-line growth for FY27 and anticipates expanding its EBITDA margins over the next two to three years. This positive outlook is fueled by strong domestic momentum and diversification across its business segments.

FY26 Performance and Segment Highlights

The company concluded FY26 with a robust revenue of ₹1,444 crore. Key segments contributed significantly to this performance. The Bushing segment saw revenue reach ₹127 crore, marking a 25% growth. Sales to Japanese customers generated ₹73 crore, up 12%. The solar business also showed promise, contributing ₹183 crore in revenue and achieving a Profit After Tax (PAT) of ₹10.2 crore for the fiscal year.

Growth Drivers and Future Outlook

Harsha Engineers is projecting continued double-digit growth for FY27, with a specific target of mid-teens growth for its India engineering segment. Management expects EBITDA margins to expand by 100-200 basis points over the next two to three years, driven by an improved product mix and cost control measures. A significant new market opportunity is emerging from a design shift in wind gearboxes, moving from bearings to bushings.

Business Operations and Strategy

Harsha Engineers is a prominent manufacturer of precision bearing cages and complex metal stampings for sectors like automotive and solar. The company has strategically expanded its production capacity with a third facility in Bhayla, India. Growth initiatives also include a brownfield expansion of its steel cage production in China, set for completion in H2 FY28, and the ramp-up of its Advantek unit, which focuses on stampings and represents a key diversification strategy beyond its core bearing cage business.

Challenges and Risks

Despite the positive performance, challenges remain. The company's Romanian facility continues to operate at a loss with negative EBITDA, though management aims to improve this by increasing the steel cage mix. Persistent high inflation in Europe is impacting input costs for materials such as lubricants and plastics. The new Advantek unit, while showing positive EBITDA, recorded an INR 11.4 crore net loss in FY26 due to high depreciation and interest expenses from recent loans.

Competitive Landscape

Harsha Engineers operates in a competitive market. Rivals like Rolex Rings Ltd and NRB Bearings Ltd focus on rings and bearings, respectively. Triveni Bearings Ltd is another player in the bearing segment. Harsha Engineers' diversification into solar and its strong presence in bearing cages provide unique strategic advantages.

Looking Ahead: Key Milestones

Shareholders will be watching the successful commissioning and operational ramp-up of the brownfield expansion in China for steel cages. The turnaround plan for the Romanian facility, focusing on increasing the steel cage mix to 30-35%, is also a key focus. The company's ability to improve the profitability of the Advantek unit as capacity utilization rises and depreciation/interest burdens potentially normalize will be closely monitored. Achieving the projected mid-teens growth in the India engineering segment for FY27 and the 100-200 basis point EBITDA margin expansion targets over the next 2-3 years are critical milestones, alongside the growth trajectory of the solar business.