Powerica Generates Sales, but Margins, ROE Weigh Powerica, a generator set maker with a growing wind power business, reported revenue growth and profit increases in fiscal year 2025 but faced challenges in maintaining profitability compared to industry peers. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin declined to 13% in FY25 from 14% in FY23, lagging behind competitors like Cummins India and Kirloskar Oil Engines, which maintained margins of 19-23%. Despite these financial hurdles, Powerica’s revenue rose 5.3% annually to ₹2,653 crore in FY25, up from ₹2,378 crore in FY23, while net profit increased by 25.8% to ₹175.8 crore from ₹106.5 crore during the same period. The company has expanded its operations into renewable energy since 2008, building a wind power business that includes independent power production (IPP), engineering, procurement, and construction (EPC), and operations and maintenance (O&M) services. By the end of FY25, its total installed operational wind capacity reached 279.6 megawatts (MW). However, its core business remains the diesel generator set (genset) segment, which contributed about 85% of total revenue in FY25. This business relies heavily on Cummins India for engines, which account for over two-thirds of the company’s total revenue. The dependence on a single supplier has raised concerns about operational risks and cost control. Powerica’s return on equity (ROE) also declined, dropping to 17.5% in FY25 from 26.5% in FY24. While the company’s net debt-equity ratio fell to 0.2 in FY25 from 0.3 in FY23, it rose again to 0.4 in the first half of FY26 as the firm accelerated its wind power projects. The company plans to raise ₹700 crore through a fresh equity issue and ₹400 crore via an offer for sale to repay debt.#karnataka #hyundai #powerica #cummins_india #kirloskar_oil_engines
