Rishabh Instruments EEI growth and Alucast turnaround support margin-led earnings upside

Investment View and Recommendation

ICICI Direct Research’s August 18, 2026 result update views Electrical and Electronic Instruments (EEI) as the principal engine of sustainable, higher-margin growth at Rishabh Instruments Limited. The broker maintains a BUY recommendation with a target price of Rs 860, compared with a CMP of Rs 660. The target is based on 25 times FY28E EPS.

Business Overview

Rishabh Instruments is a global engineering and energy-efficiency solutions provider serving electrical automation, energy measurement, industrial instrumentation and precision die-casting. In FY26, EEI represented about 70 per cent of revenue, while High Pressure Die Castings contributed about 30 per cent.

Q1FY27 Financial Performance

Reported Q1FY27 revenue increased 4.2 per cent year-on-year to Rs 198.3 crore. EBITDA rose 17.3 per cent year-on-year to Rs 33.3 crore, with the EBITDA margin improving to 16.8 per cent from 14.9 per cent. PAT was broadly flat at Rs 19.4 crore, declining 1.3 per cent year-on-year.

Geographic growth was led by Asia, where revenue increased 21.1 per cent year-on-year, and other markets, which grew 92.3 per cent. Europe declined 7.9 per cent year-on-year.

EEI: Principal Growth and Margin Driver

EEI delivered the strongest operating performance in Q1FY27. Revenue increased 34 per cent year-on-year to Rs 154 crore, while adjusted EBITDA rose 69.1 per cent to Rs 38.2 crore. Adjusted EBITDA margin expanded by 515 basis points to 24.8 per cent.

According to management, growth was broad-based across current transformers, energy measurement, data centres, energy management systems, solar and new products, with India, Lumel SA and the US contributing. Domestic order bookings increased about 20 per cent year-on-year. Billing lagged bookings, creating a backlog that management expects to convert into revenue. Management retained its FY27 EEI guidance of 20-25 per cent revenue growth and a 20-22 per cent EBITDA margin.

Product Expansion, Capacity and New Opportunities

Management has launched about 50 products over the past two years and plans more than 15 launches in FY27, focused on high-value, application-led products. The Nashik manufacturing facility has been partly commissioned to support capacity, product launches, export opportunities and changing customer requirements.

Current-transformer capacity is being increased from 5,000-6,000 units per day to 8,000-10,000 units per day. Rishabh Instruments has won 4-5 Indian data-centre projects and is quoting for about 10 more.

Solar inverters remain at an early stage and contribute below 5 per cent of business. Management expects FY27 solar revenue of Rs 24-25 crore, compared with Rs 8-9 crore in the prior year. The three-phase inverter portfolio has been expanded to 12kW, while products up to 50kW and hybrid inverter solutions are under development.

International Business and Lumel SA

Lumel SA revenue grew 39 per cent year-on-year to Rs 64 crore in Q1FY27, while its EBITDA margin expanded to 24 per cent. The improvement was aided by high-value electronics manufacturing, product diversification and customer wins.

The US business has delivered 30-50 per cent growth over the past 2-3 years. Management expects FY27 US revenue to increase from about Rs 3 crore to about Rs 45 crore. Organic and inorganic expansion remain part of the strategy.

Lumel Alucast Turnaround

Lumel Alucast remains the key turnaround lever. Its Q1FY27 revenue declined 41.2 per cent year-on-year to Rs 44 crore following the planned exit from low-margin contracts. Adjusted EBITDA was negative Rs 2.8 crore.

Management expects adjusted EBITDA break-even by the end of FY27, supported by conversion of its existing request-for-quotation pipeline and higher utilisation of vacant capacity. Management sees a medium-term route to double-digit EBITDA margins as higher-value orders replace the exited business.

Financial Outlook and Valuation

ICICI Direct expects revenue and PAT to compound at 15 per cent and 27 per cent, respectively, over FY26-FY28E. Its estimates are as follows:

The BUY recommendation and Rs 860 target price are based on 25 times FY28E EPS.

Key Risks

• Weakness in the European automotive supply chain.
• Execution risk in international operations.
• Geographic concentration in Europe.