At a Glance
Servotech Renewable Power System Ltd has decided to play Elon Musk’s game in desi style. Q1 FY26 saw revenue up 28% YoY to ₹137 Cr and PAT up 59% YoY to ₹4.55 Cr. EBITDA climbed 64% because apparently, margins like to flex sometimes. Yet, with a P/E of 98, this smallcap is priced like it’s already building Mars colonies. Promoter stake? Sliding. FIIs? Barely interested. Public shareholders? Increasing – because FOMO is real.
Introduction
Servotech is that company which started with backup power products and ended up selling the dream of green energy, EV chargers, and solar panels. Founded in 2004, it’s surfing India’s renewable wave while sprinkling “sustainability” in every investor deck.
In FY25, the company’s stock gave a decent 20% return, but its financial growth looks like it’s training for an Olympic sprint – TTM profit growth 169%, sales growth 81%. However, cash flows tell a different story (spoiler: they are crying).
Business Model (WTF Do They Even Do?)
Servotech is an energy solutions company with three key business lines:
- EV Chargers – manufacturing fast chargers for India’s upcoming EV ecosystem.
- Solar Products – from panels to inverters, targeting rooftop and commercial setups.
- LED & Backup Solutions – legacy products still generating revenue.
Lately, it’s expanding into international markets (hello UAE subsidiary) while positioning itself as a green tech enabler. Reality check: it’s still small compared to Waaree or Premier Energies, but its growth ambitions are louder than its actual size.
Financials Overview
Servotech’s numbers scream “growth stock”, but also whisper “handle with care”.
- Q1 FY26 Revenue: ₹137 Cr (↑28% YoY)
- Q1 PAT: ₹4.55 Cr (↑59% YoY)
- FY25 Revenue: ₹674 Cr (↑91% YoY)
- FY25 PAT: ₹33 Cr (↑175% YoY)
- OPM: 8% (meh)
- ROE: 17% (good but not enough to justify P/E 98)
Verdict: Growing fast, but still tiny in absolute numbers. Margins need steroids.
Valuation – Almost at Cloud Nine
- P/E Multiple Approach
- Sector P/E ~45
- EPS (TTM) ₹1.5
- Fair Value ≈ 45 × 1.5 = ₹68
- EV/EBITDA
- EBITDA FY25: ₹56 Cr
- Assume EV/EBITDA: 20× (generous for smallcap)
- EV ≈ ₹1,120 Cr → per share ≈ ₹80
- DCF (Rough Estimate)
- Growth 40% for 5 years, discount rate 12%
- Intrinsic Value ≈ ₹90 – ₹110
🎯 Fair Value Range: ₹70 – ₹110 vs CMP ₹143. Clearly, the market is pricing in a solar-fueled miracle.
What’s Cooking – News, Triggers, Drama
- UAE Subsidiary: Expansion into Middle East EV charging & solar markets.
- Strong Q1: Revenue +28%, PAT +59% – operational efficiency improving.
- EV & Solar Tailwinds: Government policies + infra push boosting orders.
- Risks: Valuation bubble, promoter stake decline, cash flow issues.
Balance Sheet – Auditor’s Roast
| (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 167 | 277 | 410 |
| Liabilities | 84 | 135 | 173 |
| Net Worth | 83 | 142 | 236 |
| Borrowings | 42 | 73 | 75 |
Commentary: Assets doubled, debt creeping up but manageable. The balance sheet isn’t scary yet, but cash reserves are thin.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | -24 | 1 | -55 |
| Investing | -13 | -26 | -16 |
| Financing | 45 | 75 | 48 |
Commentary: Profits exist, but cash flow doesn’t. Heavy working capital requirements eat up liquidity like termites.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 17% |
| ROCE | 20% |
| P/E | 98 |
| PAT Margin | 5% |
| D/E | 0.32 |
Commentary: Healthy ROE/ROCE, moderate debt. But P/E 98? That’s a joke only momentum traders laugh at.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 278 | 353 | 674 |
| EBITDA | 19 | 21 | 56 |
| PAT | 11 | 12 | 33 |
Commentary: Revenue tripled in 2 years. PAT growing fast, but absolute scale is still small.
Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Servotech | 699 | 33 | 98 |
| Waaree Ener. | 15,461 | 2,221 | 41 |
| Premier Ener. | 6,682 | 1,047 | 46 |
| Genus Power | 2,442 | 293 | 37 |
Commentary: Servotech is a toddler in a room full of bodybuilders, yet trades at a valuation richer than the veterans.
Miscellaneous – Shareholding, Promoters
Promoter holding has dropped from 69% → 58.6% over 3 years. FIIs barely at 3%, while retail owns 38% (high – retail loves dreams). UAE expansion may attract institutional attention if executed well.
EduInvesting Verdict™
Servotech is in the right sectors (solar + EV charging), which gives it a strong narrative. Revenue growth is spectacular, profit growth even better. But cash flows and declining promoter stake are red flags. At P/E 98, the stock is priced for perfection – any slip, and it could crash harder than an overcharged battery.
Strengths
- Explosive revenue & profit growth
- Strong positioning in EV and solar space
- Expanding internationally (UAE play)
Weaknesses
- Cash flows negative despite profits
- Small scale vs peers
- Declining promoter stake
Opportunities
- EV infra boom
- Solar adoption rising globally
- Government incentives
Threats
- Execution risk in international markets
- Margin pressure in competitive solar space
- Overvaluation risk
Final Take:
Servotech is the smallcap underdog riding the green wave, but priced like it’s already Tesla. Great growth story, risky valuation. Ideal for those who like rollercoasters with no seatbelts.
Written by EduInvesting Team | 30 July 2025SEO Tags: Servotech Renewable, Solar, EV Charging, Green Energy, Q1 FY26 Results
