Valiant Communications Ltd, FY26: The Operating Margin Finally Showed Up

General information and entertainment, not investment advice. The author is not a SEBI-registered adviser or research analyst. No recommendation, no promised returns. Markets carry risk including loss of capital. Figures may not be current. Consult a registered adviser before acting.

1. At a Glance

Valiant’s FY26 delivered what looked impossible two years ago: consolidated revenue of ₹84.9 Cr on earnings of ₹24.2 Cr—a 67% jump in sales and 152% jump in profit. The OPM expanded from 30.7% to 41.5%.

But here’s the tension: after a ₹1.44 Cr market cap 18 months ago, the market now prices this at ₹1,460 Cr. The gross order book sits at ₹68.9 Cr against annual run-rate revenue of ₹85 Cr—meaning the pipeline covers less than 10 months.

The working capital cycle compressed to 172 days from 222 days (FY25). Cash balances hit ₹56.7 Cr from ₹17.3 Cr.

Can a company with 40% ROCE and 30% ROE sustain this without bumping into geometry?

2. Introduction

Valiant Communications manufactures communication, protection, and synchronization equipment for power utilities and critical infrastructure. Founded in 1993, the company holds ISO certifications across quality, environmental, and security standards and operates in 110+ countries.

The company pivoted hard post-FY22: losses gave way to breakeven, then explosive growth. FY24 set the tone—46 Cr revenue, 6.2 Cr net profit. FY25 extended the trajectory at 50.9 Cr and 9.6 Cr.

FY26 wasn’t incremental. It was a compression of what should have taken three years into one—doubling down on domestic power utility orders, export momentum into Europe and South America, and a crude but effective capital raise via 6 lakh warrants at ₹768 each.

3. Business Model: WTF Do They Even Do?

Valiant sells to India’s power sector—State Electricity Boards, transmission operators, renewable integration—and to global utilities. Its portfolio spans synchronization (GPS/GNSS/NavIC timing), grid protection (distance relays, phasor measurement units), IP/MPLS routers, and cybersecurity hardware.

The trick is this: every Indian SEB is upgrading digital substations. Renewables demand fast grid response. Defence wants secure, isolated networks. These are not niche needs.

Revenue in FY26 broke as: India ₹72.2 Cr (85%), USA ₹3.6 Cr, Europe ₹5.9 Cr, Rest ₹4.2 Cr. Exports were 15% of total—historically higher, now compressed by domestic growth urgency.

The model is thin: raw materials ate 32% of revenue. Staff cost 13%. Net margin after all else was 28.5%—not a software co, but not commodity either. Orders flow in lumpy: nine months of inventory churn and then nothing.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Q4 FY26 to Q4 FY25:

EBITDA margin in Q4 FY26 was 47.6% vs 38.9% in Q4 FY25. The concall attributed the margin expansion to scale, product mix (higher-margin items shipping), and inventory normalization.

On the year: revenue grew 67%, EBITDA 126%, PAT 152%. This wasn’t a linear ramp—Q2 and Q4 punched above Q1 and Q3. The company flagged that December and January demand surges hit PAT; inventory had been abnormal (₹18.1 Cr in FY25 to ₹12.6 Cr in FY26). In one sentence from the concall: “Inventory has returned to normal levels.”

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 60x earnings here, matching the peer median of 60.3x. Historically, Valiant traded at a 28x average—meaning the stock has