01 — At a Glance
The Company That Builds Things. Serious Things. Without Drama.
- 52-Week High / Low₹232 / ₹153
- Q3 FY26 Revenue₹644 Cr
- Q3 FY26 PAT₹78.8 Cr
- Q3 FY26 EPS₹3.51
- Annualised EPS (Q3×4)₹14.04
- Book Value₹59.7
- Price to Book2.85x
- Debt / Equity0.12x
- Return over 6M—%
- Return over 3M-11.5%
The Reality Check: Pace Digitek is a ₹3,668 crore company that IPO’d just 5 months ago (Oct 2025) and is already sitting on a ₹9,100+ crore order book. The stock is down 11.5% in three months because India loves to punish small-caps when they go up. Meanwhile, P/E at 14.6x is 0.9x the industry average of 16.3x. This is not a fair fight. This is a free sample at a restaurant you’ve never visited.
02 — Introduction
The Company That Builds Your Grid & Your Battery Hope
Pace Digitek was incorporated in 2007. That’s the year the first iPhone launched, which is why we’re all paying ₹80,000 for phones we don’t need. Pace, on the other hand, has been quietly building telecom infrastructure, power systems, and lithium-ion batteries while most Indian companies were still figuring out what a website was.
The business is split three ways: Telecom (94% of revenue) — manufacturing and installing tower infrastructure, optical fibre networks, power systems. Energy (5.5% of revenue) — solar, battery energy storage systems (BESS), lithium-ion batteries. ICT (0.5%) — smart surveillance, kiosks, smart classrooms. That last one sounds like what Maruti calls a “feature,” so let’s skip it.
Pace just raised ₹819 crores via IPO in October 2025. The stock is trading at ₹170, down from IPO price of ₹205. Your friendly neighbourhood IPO investor is currently experiencing what we call “buyers’ remorse spiked with redemption hopium.”
But here’s the thing: Q3 FY26 results just dropped, and the company delivered ₹644 crore revenue (+13.5% YoY), ₹78.8 crore PAT (+11.3% YoY), and a ROCE of 41.3%. This is a company executing while everyone else is explaining why they missed guidance. Management is building a ₹10,000 crore order book target by March 2026. Let’s break down whether that’s bluster or blueprint.
Concall Insight (Feb 2026): “Improved project execution across both telecom and energy sectors” + “expected to get stabilized at this level [18.3% EBITDA margin].” Translation: We’re not growing margins anymore. We’re growing order book. That’s a different game.
03 — Business Model: WTF Do They Even Do?
Building Towers. Manufacturing Batteries. Controlling Your Phone Signal.
Pace operates as a vertically integrated infrastructure play. They design, manufacture, install, commission, and maintain telecom towers and optical fibre networks. Think of them as the unsexy plumber of telecom — you never think about them until your 5G drops during an Instagram reel upload.
Telecom segment (94% revenue): The bread and butter. Pace manufactures power systems (SMPS, IPMU, inverters, power supplies) and passive infrastructure, then installs and maintains them at telecom towers across India. Customer concentration is brutal — Top 3 customers = 89% of revenue. Top 5 customers = 95%. That’s the equivalent of an Indian share market portfolio with only HDFC, Reliance, TCS, Wipro, and a samosa vendor. A small operator hiccup, and you’re wiped out. Except Pace’s customers are BSNL, Reliance, Telecom companies. These don’t go bankrupt. They go bankrupt on someone else’s balance sheet.
Energy segment (5.5% revenue, the future): Pace is building a BESS manufacturing beast through its subsidiary Lineage Power. They manufacture lithium-ion batteries, containerized energy storage systems, and solar equipment. They have a 5 GWh annual manufacturing capacity (expanding to 10 GWh by September 2026). In Q3, they delivered ~400 MWh in the last three months and commissioned ~200 MWh. These are real projects. Real capacity. Real revenue conversion. Management is explicitly building a “BOO model” (Built-Own-Operate) through a subsidiary called TransGreenX Energy to become an annuity asset owner, not just an EPC vendor.
Order book story: Pace has ₹9,135 crore as of November 2025 — 97.8% from public sector. Telecom: ₹2,400–2,460 crore. Energy: ₹6,000+ crore (target: ₹10,000 crore by March 2026). This is not marketing speak. This is BSNL order book, Ministry of Power tenders, and MSEDCL projects. Real POs. Real delivery timelines.
Order Book₹9,135 Cr97.8% Public Sector
BESS Capac.5–10 GWhFY26–27 ramp
Top 5 Cust.95%Concentration Risk
Concall Deep Dive: Management stated ~40% of the ~₹10,000 cr energy order book to execute in FY27 (EPC + BOO). For non-BOO, CFO guided ~₹6,300 cr would add to topline between Q4 FY27 and H1 FY28. BOO projects execute over ~2 years capex, but revenue accrues as annuity over 12 years. This is a lumpy execution story that becomes smooth once it scales.
💬 Would you rather have a company with 95% customer concentration that gets paid by BSNL on schedule, or 1,000 customers who might go bust? Drop your masala take!
04 — Financials Overview
Q3 FY26: The Numbers
Result type: Quarterly Results (Consolidated) | Q3 FY26 EPS: ₹3.51 | Annualised EPS (Q3×4): ₹14.04
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 644 | 567 | 533 | +13.5% | +20.7% |
| EBITDA | 118 | 121 | 94 | -2.5% | +25.5% |
| EBITDA Margin % | 18.3% | 21.4% | 17.6% | -310 bps | +170 bps |
| PAT | 78.8 | 70.8 | 68 | +11.3% | +15.9% |
| EPS (₹) | 3.51 | 3.21 | 3.59 | +9.3% | -2.2% |
Margin Compression Story: Gross margin fell from 32.9% (Q3 FY25) to 26.3% (Q3 FY26). EBITDA margin dropped 310 bps to 18.3%. Management attributed this to “project mix” — basically, they’re executing more telecom work (lower margin) and ramping BESS manufacturing (still-establishing margins). They explicitly guided that margins should “stabilize at this level” moving forward. Translation: Don’t expect a margin bounce unless they execute more high-margin BESS BOO contracts. This is not a high-growth, expanding-margin story. This is an order-book-conversion story.
✅ Revenue Growing
+13.5% YoY, +20.7% QoQ. Execution is real. Order book is converting. Telecom + Energy mix is normalizing.
⚠ Margin Pressure
Gross margin down 660 bps. EBITDA margin down 310 bps. Management expects stability, not expansion. Watch the energy segment contribution.
05 — Valuation Discussion
What’s This Battery King Actually Worth?
Method 1: P/E Based
Annualised Q3 FY26 EPS = ₹14.04. Telecom infrastructure median P/E = 15.91x. Pace’s justified premium for ROCE (41.3% vs sector 21%) and growth profile: 1.15x–1.35x sector. Fair P/E band: 18x–21x.
Range: ₹252 – ₹295
Method 2: EV/EBITDA Based
Annualised Q3 FY26 EBITDA = ₹472 Cr (118 × 4). Current EV = ₹3,679 Cr (from screener). EV/EBITDA = 7.79x. Telecom infrastructure comps trade at 9–11x. With low debt (D/E 0.12x) and 41% ROCE, justified range: 10x–12x.
EV range (10x–12x): ₹4,720 Cr – ₹5,664 Cr → Per share (22.45 Cr shares):
Range: ₹210 – ₹252
Method 3: DCF Based
Operating CF FY25: -₹176 Cr (working capital heavy due to receivables spike at year-end). TTM basis normalized at ~₹200 Cr. Growth: 12–15% for 5 years (order book-driven). Terminal growth: 4%. WACC: 10% (low cost of capital post-IPO).
→ PV of 5-year OCF at 10%: ~₹1,150 Cr
→ Terminal Value (4% growth / 6% cap rate): ~₹3,600 Cr
→ Total EV: ~₹4,750 Cr (net cash ~₹96 Cr FDs)
Range: ₹198 – ₹244
Fair Min: ₹210
CMP: ₹170 | IPO: ₹205
Fair Max: ₹295
CMP ₹170
IPO ₹205
⚠️ EduInvesting Fair Value Range: ₹210 – ₹295. CMP ₹170 sits below fair value across all three methods, implying 24–73% upside if execution sustains. This fair value range is for educational purposes only and is not investment advice. Please consult a SEBI-registered investment advisor before making any financial decision.
06 — What’s Cooking: News, Triggers & Drama
The IPO Hangover & The Battery Bet
