en.Wedoany.com Reported - Servotech Renewable Power System Ltd. plans to expand its battery energy storage system (BESS) capacity to ten times its current level within the next two years, while simultaneously enhancing manufacturing capabilities to meet rapidly growing market demand.
During the Q1 FY2027 earnings call, Managing Director Raman Bhatia stated that the battery energy storage business is currently experiencing strong demand, with installed capacity operating at full utilization and unable to meet order requirements. The company is entering its next phase to ramp up capacity.
To support subsequent growth, Servotech has signed a memorandum of understanding (MoU) with the Haryana government and, according to Bhatia, is building a new manufacturing facility in the state. Meanwhile, the company is also expanding its distribution network by adding channel partners in northern, southern, and northeastern India to cover rising demand across the country.
Regarding the pace of expansion, Bhatia outlined a clear roadmap: BESS capacity will double from current levels within the next six months, triple by March 21, 2027, and expand tenfold over the next two years. He specifically clarified that the tenfold target pertains to capacity rather than capital expenditure, and capital investment will not scale up proportionally.
On profitability, management expects the battery energy storage business to deliver improvements. Bhatia noted that BESS projects are making positive contributions to EBITDA, and the incremental investment required is relatively limited, with announced investment levels expected to remain within that scope.
Although investors sought revenue and margin guidance for FY2027, management did not provide specific financial targets, emphasizing that the primary priority is maintaining the growth trajectory through execution and customer delivery. Bhatia stated that the company does not deliberately chase profit percentages, and as long as it focuses on delivering what customers need, margins will naturally follow.
The company also expects that the second half of the fiscal year typically performs better than the first half, a historical trend that is likely to continue. Bhatia noted that records from the past five to ten years support this assessment.
Regarding financing arrangements, Servotech indicated that capacity expansion may rely more on debt financing than equity financing. Bhatia pointed out that debt levels will remain manageable, the company will strive to maintain a reasonable debt-to-equity ratio, and believes the current market environment is not favorable for equity financing.
