Megatherm Induction Ltd. (MEGATHERM)
SME CapIndustrials stocks · SME cap · NSE
Megatherm Induction Ltd. manufactures induction heating & melting products, transformers, and allied steel plant equipment like LRF, CCM, FES, and EAF. It provides turnkey solutions and after-sales services, serving steel, auto ancillaries, railways, and DI pipe producers globally with 3000+ installations in 52+ countries.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Investable fundamentals, management trust is acceptable, price trend is neutral, and recent execution is mixed.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Bad · 2/100PAT -8% YoY · margin compression · Rev +18% YoY · +18% QoQ
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹187 Cr | +17.6% | +17.6% |
| EBITDA | ₹18 Cr | -14.3% | +12.5% |
| Operating margin | 9.0% | -300 bps | -100 bps |
| PAT | ₹12 Cr | -7.7% | +0.0% |
| PAT margin | 6.4% | -52 bps | -113 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
Megatherm Induction reported modest FY26 revenue growth of 9% YoY to Rs. 3,528.3 Mn, with PAT up 11.15% YoY to Rs. 236.8 Mn. H2FY26 saw EBITDA decline 10.56% YoY to Rs. 196.8 Mn due to increased HR and marketing costs, impacting sequential profitability.
The company delivered modest FY26 growth, but H2 profitability was impacted by strategic investments in talent and marketing. Strong order book and new transformer capacity provide future revenue visibility, though margin expansion from efficiencies in FY27 needs close monitoring. Global expansion efforts are a positive.
Solar Transformers (IDT)
Successful CPRI testing of 13.2 MVA IDT, targeting Rs. 110 Cr revenue by FY27, aligned with India's 500 GW renewable target.
Global Expansion (Induction)
US business transitioned to incorporated structure, on-ground presence in Latin America, expanding to UK, Europe, Middle East, Africa & Southeast Asia.
Product Diversification
Entered Pipe & Tube sector via JV, validated Dual-Track / Tri-Track power supplies for foundries. Commissioned CCM, LRF, FES.
Green Furnace Technology
Gained market share due to energy efficiency; plans to expand in West & South India.
New Transformer Facility
Largest in Eastern India, 2,000 MVA capacity, expandable to 3,000 MVA with minimal investment. Commissioned in Q1 FY26.
Solar Transformer Capacity
Targeting 150-160 MVA/month by H2 FY27.
4th Manufacturing Facility
Construction initiated to support growing transformer demand.
Indian Renewable Market Growth
Expected to grow from 237.17 GW in 2025 to 500.23 GW by 2030 (CAGR 16.10%).
Indian Transformer Market Growth
Expected to grow from USD 3.97 billion in 2023 to USD 8.41 billion by 2030 (CAGR 10.84%).
Indian Foundry Market Growth
Expected to grow from USD 25.57 billion in 2025 to USD 42.61 billion by 2030 (CAGR 11.13%).
Government Initiatives for Steel
Policy initiatives like Make In India, Atma Nirbhar Bharat, PLI scheme, and $1.4 trillion infrastructure spending by 2025.
Increased Operating Costs
Employee benefits expense up 23% YoY and other expenses (incl. marketing) up 17% YoY in FY26, impacting H2 EBITDA.
Working Capital Management
Inventories increased significantly from Rs. 970.18 Mn in FY25 to Rs. 1,266.98 Mn in FY26.
Execution Risk for New Capacities
Successful ramp-up and execution of the new transformer capacity and 4th manufacturing facility are crucial for revenue realization.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
Annual YoY comparison provides a holistic view of the company's growth trajectory. However, sequential (HoH) comparison for H2FY26 is critical to assess the impact of recent investments in HR and marketing on operational efficiency and profitability, especially with new capacities coming online.
Induction Business Order Book
~Rs. 250 Cr providing strong carry-forward into FY27.
Transformer Order Inflow
Secured 400+ MVA orders, with deliveries commencing March onwards. Secured Rs. 37.9 Cr transformer orders (5 domestic orders).
FY26 EBITDA Margin
FY26 EBITDA Margin stood at 11.3%. H2FY26 EBITDA Margin was 10.40%.
Employee Benefit Expense Growth
Employee Benefit Expense increased by 23.22% YoY in FY26.
FY27 Revenue Visibility
Strong execution momentum in H2 supports FY27 revenue visibility of Rs. 400+ Cr for Induction business.
FY27 Margin Expansion
FY27 is expected to leverage efficiencies for margin expansion, despite increased HR and marketing costs in FY26.
Near Term Growth Target (up to FY28)
Targeted Revenue Growth: ~20-25% CAGR. Targeted EBITDA Growth: ~25% CAGR.
Medium Term Growth Target (up to FY32)
Targeted Revenue Growth: ~20% CAGR (nearly 3x by FY32). Targeted EBITDA Growth: ~25% CAGR (nearly 4x by FY32).
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| EBITDA Margin | 10.40% (H2FY26) | Improvement in FY27 as efficiencies from investments are leveraged. |
| Transformer Order Conversion/Execution | Rs. 37.9 Cr orders, 400+ MVA orders | Timely delivery and revenue recognition from new transformer orders and ramp-up of new capacity. |
| Working Capital (Inventories) | Rs. 1,266.98 Mn (FY26) | Stabilization or reduction in inventory levels relative to revenue growth. |
| Global Expansion Traction | JV in North America, representatives in LatAm, office in UK | Concrete order inflows and revenue contribution from international markets. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
52NeutralSMA20 -3.0% / mo · MACD +
Technical chart
MEGATHERMdaily · 1Y · AUTO+7.5%Daily technical trend read
Mixed signalsSignals are conflicting — long-term uptrend intact. RSI 61. Wait for confirmation.
- Price above SMA200 (long-term uptrend) but mid-term MAs not aligned.
- SMA20 falling (~3.1% over last month) — short-term momentum negative.
- RSI(14) at 61 — rising, no extreme reading.
- MACD above signal but histogram contracting — bullish momentum cooling.
- 27% off 52W high · 35% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation & score drivers
U-Score 69 · UNDERVALUED · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 69 · UNDERVALUED · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
UNDERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- FCF yield is supportive at 4.7%.
- Piotroski is strong at 8/9.
- Fair-value margin of safety is positive at 54.0%.
Main drags
- Penalty bucket subtracts 2 points.
- Valuation is weaker at 16/30; verify the latest quarterly trend.
- Quality is weaker at 11/20; verify the latest quarterly trend.
Blended valuation: PE, EV/EBITDA, FCF yield, and balance-sheet checks
For this sector, IndiaPulse uses a blended lens rather than relying on a single valuation ratio.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Healthy Trust: Claim history is still being built. It ranks around the 75th percentile of the scored universe and 73rd percentile within Industrials. Main check: financial discipline is weak at 50/100.
Healthy Trust Lite: Promoter holding is 71.9%. Key concern: ROCE trend is -3.9%.
Generally investable credibility. Look for weak sub-scores before increasing position size.
overall median 67 · Industrials: 73rd pctile, median 68 · SME: 93rd pctile, median 64
10 documents have extracted text, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Healthy Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter holding is 71.9%.
- ▸Promoter pledge is zero.
- ▸FCF yield is positive at 4.7%.
- ▸5 years of positive FCF.
Trust risks
- ▸ROCE trend is -3.9%.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 14.80
- P/B
- 2.16
- EV/EBITDA
- 10.74
- Market Cap
- 359.00Cr
Profitability
- ROE
- 15.80%
- ROCE
- 18.10%
- ROA
- 6.98%
- Dividend Y
- —
Growth (CAGR)
- Revenue 5Y
- 26.00%
- EPS 5Y
- 51.00%
- Revenue 3Y
- 9.00%
- EPS 3Y
- 20.00%
Balance Sheet
- Debt/Equity
- 0.30
- Interest Coverage
- 8.25×
- Altman Z
- 3.29
- Book Value
- 87.80
Cash Flow
- FCF Yield
- 4.74%
- FCF Positive Y
- 5/5
- OCF
- 5.00 Cr
- EPS TTM
- 12.57
Shareholding
- Promoter Hold
- 71.85%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 13%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
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Peers
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Peers
Business-comparable peers in Industrials — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.