📌 At a Glance
Salzer Electronics Ltd (CMP: ₹955, down 11.90%) reported strong FY25 standalone revenue of ₹1,382.9 Cr, up 22% YoY, with PAT jumping 44.2% YoY to ₹62.26 Cr. They also bagged a ₹192 Cr Smart Street Lighting order from BBMP. But despite this bright news, the market switched off the lights on the stock.
📊 Full-Year FY25 Financials
| Metric | FY25 | FY24 | YoY Change |
|---|---|---|---|
| 🧾 Revenue | ₹1,382.93 Cr | ₹1,135.58 Cr | 🔼 21.78% |
| 💼 EBITDA | ₹124.93 Cr | ₹110.20 Cr | 🔼 13.37% |
| 🧮 EBITDA Margin | 9.03% | 9.70% | 🔽 67 bps |
| 💰 PAT | ₹62.26 Cr | ₹43.19 Cr | 🔼 44.16% |
| 📈 PAT Margin | 4.50% | 3.80% | 🔼 70 bps |
| 🧾 EPS | ₹35.30 | ₹25.77 | 🔼 36.96% |
✅ Exports contributed 27.4%, with strong demand from Middle East, Africa, and Asia.
❌ Smart meter ramp-up costs hit Q4 margins, which spooked investors.
🧮 Q4 FY25 Snapshot
| Metric | Q4 FY25 | Q4 FY24 | YoY Change |
|---|---|---|---|
| 🧾 Revenue | ₹365.59 Cr | ₹317.57 Cr | 🔼 15.12% |
| 💼 EBITDA | ₹26.18 Cr | ₹30.92 Cr | 🔽 15.34% |
| 💰 PAT | ₹8.23 Cr | ₹12.08 Cr | 🔽 31.84% |
| 🧮 EBITDA Margin | 7.16% | 9.74% | 🔽 258 bps |
| 🧾 PAT Margin | 2.25% | 3.80% | 🔽 155 bps |
“Margins were short-circuited this quarter due to high smart meter startup expenses — but current orders suggest this is a temporary flicker.”
🔌 Segment Performance
🔧 Industrial Switchgear
- 📦 Contribution: 56.39% of Q4 revenue, 57.58% of FY25 revenue
- 🔼 FY25 growth: 28.65% YoY
- 💰 EBITDA Margin: 11.84% in FY25
🧵 Wires & Cables
- 📦 Contribution: 36.92% of FY25 revenue
- 🔼 FY25 growth: 14.19% YoY
- 💰 EBITDA Margin: 6.11% in FY25
🏠 Building Products
- 📦 Contribution: ~5.5% of revenue
- 🔼 Gained momentum with switches, MCBs, changeovers
💡 Recent Developments
🚨 Major Smart Infra Orders Bagged:
- ₹192 Cr order from BBMP for Smart Street Lighting
- ₹50 Cr + ₹5 Cr orders for Smart Energy Meters
- Expecting smart meter segment to scale rapidly, restoring margins back to ~10.5%
🚀 New Overseas Subsidiary:
- Salzer Electronics Arabia Ltd — push into Gulf countries
🧯 Write-offs & Cleanup:
- Wrote off failed EV subsidiaries:
- ₹83 lakh in Salzer Kostad EV Chargers Pvt Ltd
- ₹34.75 lakh in Salzer Emarch Electromobility Pvt Ltd
“EV dreams discharged. Smart infra plug-in begins.”
💰 Dividend Update
- 💸 Recommended ₹2.50/share (25%) on FV ₹10
- Conservative but consistent — dividend yield ~0.26%
🧠 EduInvesting Take
“Q4 looks dim, but the FY25 report shines brighter than a smart LED streetlight.”
Here’s why the stock crashed 12% despite record PAT and large orders:
- ❌ Q4 margins tanked (EBITDA down 15%, PAT down 31%)
- ❌ Market hates when growth comes at the cost of short-term profit
- ❌ Confusion over write-offs of EV ventures spooked some investors
- ❌ Smart meter growth hasn’t yet translated into fat margins
But long-term? Salzer is clearly:
- ✅ Scaling up infrastructure-led segments (smart meters, lighting)
- ✅ Deepening export play — now at 27.4% of revenue
- ✅ Becoming an OEM-to-smart city hybrid
If management executes the ₹192 Cr BBMP order efficiently and margins stabilize, this could be a serious FY26 re-rating candidate.
🏁 Final Verdict
“Smart Meters May Hurt Margins Today — But May Light Up the Balance Sheet Tomorrow.”
Salzer’s FY25 shows what happens when a company invests into the future — results look choppy, but order books start glowing.
The next 2 quarters are crucial to watch:
- Can smart meter orders scale?
- Will margins recover above 10%?
- Is export momentum sustainable?
If the answer to all is yes, this dip may just be a fuse that needs flipping.
🗓️ Published: May 26, 2025
✍️ By: Prashant Marathe
Tags: Salzer Electronics, Smart Meters India, BBMP Lighting Order, Smart Infra, Switchgear growth, Make in India Energy, Q4FY25 Results
