Servotech Renewable Power System Limited — Earnings Release 2024

Oct 30, 2023

30[th] October, 2023

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To, National Stock Exchange of India Limited

Exchange Plaza, NSE Building, Bandra Kurla Complex, Bandra East, Mumbai-400 051

Trading Symbol: SERVOTECH

Sub: Earnings release and Shareholders’ letter for results of Q2 FY 23‐24.

Dear Sir/Madam,

With reference to the captioned subject, please find attached Earnings release and Shareholders’ letter for results of Q2 FY 23-24.

The same is published on website of the Company at www.servotech.in.

Kindly take the above information on record and oblige.

Thanking You,

FOR SERVOTECH POWER SYSTEMS LIMITED

RAMAN Digitally signed by RAMAN BHATIA BHATIA Date: 2023.10.30 21:05:50 +05'30'

RAMAN BHATIA MANAGING DIRECTOR DIN: 00153827

Servotech Power Systems Limited

CIN : L31200DL2004PLC129379

REGISTERED OFFICE: 806, 8[th] Floor, Crown Heights, Hotel Crown Plaza, Sector-10, Rohini, New Delhi -110085 PLANT AND R&D :76A,Sector-57, Kundli Industrial Area, Sonepat, Haryana-131028 Tel No : 011-41183117,• Sales: +91 9717691800,• Email : servotech@servotechindia.com , •Website: www.servotech.in

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Q2 & H1 FY24 October 30[th] , 2023

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About Servotech Power Systems Ltd. (“SPSL” or the “Company”):

• ⮚ Servotech Power Systems Ltd. (SPSL) has emerged as a pioneer in manufacturing out-of-the-box solutions for the EV and solar space by integrating technology and innovation

• The company manufactures range of EV chargers and as of 30[th] September 2023, it holds a significant market share in electric vehicle charging solutions space and aims to contribute increasingly to the country's transition towards the widespread adoption of electric vehicles

• Additionally, it is also engaged in end-to-end manufacturing, procurement and distribution of a range of high-end advanced solar products

• SPSL is also engaged in the manufacturing & selling of LED, UVC, and medical-grade products in India

• ⮚ SPSL has a state-of-the-art manufacturing facility spanning over 55,000 sq. ft. in Haryana, backed by an R&D centre that features cutting-edge technology solutions

• ⮚ It has strong supply chain network with presence in over 600+ cities and presence across 21+ Indian States

• ⮚ SPSL has earned a reputation for providing high-quality and reliable sustainable power solutions to a variety of industries and caters to marquee clients like IOCL, BPCL, GAIL, Indian Railways, Ministry of electronics & information technology, Government of India and others

• ⮚ The company has successfully implemented over 15 MW of solar power plants in various locations throughout India

• Solarized more than 1,00,000 homes in different states by installing Solar Home lighting Systems

• ⮚ The company has two subsidiaries:

• Rebreathe Medical Devices India Pvt. Ltd. (95.0% Holding) is engaged in manufacturing of critical medical equipment like oxygen concentrator devices and its spare parts

• Techbec Green Energy Pvt. Ltd. (100.0% Holding) is engaged in manufacturing, trading, & distribution of essential components for Electric Vehicle (EV) Chargers

Developments in the current financial year thus far:

• ➢ Achieved implementation of SAP S/4 HANA in record breaking time, acknowledged by KPMG experts

• SAP S4 HANA Grow is a cutting-edge enterprise resource planning (ERP) solution that will empower SPSL to transform its operations and gain realtime insights for decision-making and enhancing customer experiences

• ➢ Signed a MoU with the Government of Uttar Pradesh to establish an EV Charger manufacturing facility in the state, incorporating backward integration, in alignment with the Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2022

• SPSL plans to invests ~₹ 300 Crs in the project, with an aim to generate ~10,000 DC EV fast-chargers annually. Further, the operations are expected to commence from Q1 FY25

• ➢ Signed a pact with National Solar Energy Federation of India (NSEFI) to establish a Solar powered EV Charger-enabled carport as a pilot project and has finalized Hauz Khas, Delhi as their location

• As per the terms, SPSL will cover all the phases of the upcoming carport from design to fabrication to implementation. Further, the project will comprise of two DC chargers with a capacity of 15kW and 30kW each, 12 solar panels for 540wp, a 7kW AC charger, a 3.3kW AC charger, and a 10kW on-grid inverter

• ➢ In order to streamline its corporate structure, SPSL divested its subsidiary, in which it held 63.5% equity stake, Techbec Global Solutions Pvt. Ltd. and incorporated a new subsidiary “Techbec Green Energy Pvt. Ltd.” on 27[th] July, 2023.

• Techbec Green Energy is engaged in the operations of manufacturing, trading, distribution, indenting, and acting as selling and purchasing agents of essential components for Electric Vehicle (EV) Chargers like Power modules, CCS 2 guns, Type 2 guns, Connectors, Control Cards, and PLC Modules along with Lithium-ion Batteries

• ➢ Signed two MOUs with IIT Roorkee to develop state-of-the-art rectifier units for CCS2 chargers and Onboard EV chargers for 2, 3 and 4 Wheelers

• This strategic partnership aims produce high-quality onboard chargers which are compact and lightweight charging solution designed to be integrated directly into two, three, and four-wheelers, eliminating the need for a separate charging device

• ➢ Entered into a Strategic Partnership with EMCOR Power Solutions to Revolutionize EV Charging Infrastructure in India ▪ Under the terms of this MOU, EMCOR Power Solutions has committed to provide SPSL with 1,000 CPO (Charge Point Operator) sites in India. SPSL will manufacture and install 30kW and 60kW and even higher capacity DC fast EV chargers

• ➢ SPSL filed two patents for Energy Management Technologies with an to enhance grid service optimization through a battery energy storage system and will effectively channel renewable energy into BESS for maximum value, enabling the transition to sustainable energy

• ➢ Developing and fostering a culture of employee ownership the Company has granted approval for the distribution of 33,308 options to eligible employees as part of the ESOP Scheme for the year 2022

• ➢ The Company approved stock spilt in the ratio 1:2 with the record date as 28[th] July, 2023

Key Financial Metrics:

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Total Revenue (₹ in Lakhs) EBITDA & Margins
10,000.0 800.0 8.9% 10.0%
8,000.0 600.0 6.9% 8.0%
6.0% 6.0%
6,000.0 400.0
4.0%
4,000.0 200.0 2.0%
2,000.0 0.0 0.0%
Q2 FY23 Q1 FY24 Q2 FY24
0.0
Q2 FY23 Q1 FY24 Q2 FY24 EBITDA EBITDA Margin %
PAT and Margins ROE & ROCE
500.0 6.0% 25.0% 21.8%
400.0 5.1% 5.0% 20.0% 18.3%
4.0%
300.0 3.6% 15.0%
3.0% 16.2%
200.0 1.9% 10.0% 13.5%
2.0%
100.0 1.0% 5.0%
0.0 0.0% 0.0%
Q2 FY23 Q1 FY24 Q2 FY24 As of 31st Mar'23 As of 30th Sep'23
PAT PAT Margin % ROE% ROCE
₹ 240.5 ₹ 712.9 ₹ 597.01
₹ 4,024.0 ₹ 7,981.4 ₹ 8,659.09
₹ 78.0 ₹ 411.0 ₹ 312.4
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Financial Performance

Particulars (₹ in Lakhs) Q2 FY24 Q2 FY23 YoY% Q1 FY24 H1 FY24 H1 FY23 YoY% Revenue from operations 8,592.94 4,016.07 113.9% 7,956.62 16,549.57 7,219.94 129.2% Other income 66.15 7.89 24.73 90.88 10.54 Total revenue 8,659.09 4,023.96 115.2% 7,981.35 16,640.44 7,230.48 130.1% Total Expenses excluding Depreciation, Amortization&Finance Cost 8,062.08 3,783.46 7,268.46 15,330.52 6,851.62 EBITDA 597.01 240.50 148.2% 712.89 1,309.92 378.86 245.8% EBITDA Margin % 6.89% 5.98% 8.93% 7.87% 5.24% Depreciation & Amortization 72.55 73.41 70.86 143.41 116.01 Finance Cost 107.49 62.78 92.88 200.37 111.01 PBT before exceptional items 416.99 104.30 549.14 966.14 151.83 Exceptional Items 0.00 0.00 0.00 0.00 0.00 PBT 416.99 104.30 549.14 966.14 151.83 Tax Expense 104.59 26.26 138.18 242.77 38.23 PAT 312.41 78.04 300.3% 410.96 723.37 113.60 536.8% PAT Margin % 3.60% 1.94% 5.15% 4.35% 1.57% Other comprehensive income 0.85 0.54 0.00 0.85 0.54 Net PAT 313.26 78.58 410.96 724.22 114.14 Diluted EPS ₹0.15 ₹0.04 ₹0.19 ₹0.34 ₹0.06 Particulars (₹ in lakhs) 30th Sep’23 31th Mar’23 PP&E 1,827.04 1,979.53 Other Intangible Assets 58.15 15.63 Capital Work In Progress 0.00 2.03 Assets under Development 13.99 49.00 Investment Property 326.93 218.93 Investments 0.00 0.00 Other Financial Assets 0.00 0.05 Deferred Tax Assets (net) 22.55 20.96 Other-Non Current Assets 899.82 1,140.05 Trade Receivables 589.20 440.92 Non-Current Assets 3,737.68 3,867.11 Inventories 1,587.43 2,085.66 Trade Receivables 8,901.97 8,556.07 Cash & Cash Equivalents 32.59 1,194.93 Other bank balances 1,006.75 430.31 Other Financial Assets 0.00 92.02 Other Current Assets 1,905.14 448.16 Current Assets 13,433.89 12,807.15 Total Assets 17,171.57 16,674.26 Assets Particulars (₹ in lakhs) 30th Sep’23 31th Mar’23 Equity Share Capital 2,126.54 2,126.54 Other Equity 6,805.57 6,090.68 Shareholders Fund 8,932.11 8,217.22 Borrowings 1,315.07 751.88 Other Non-Current Liabilities 79.12 126.90 Provisions 378.74 69.04 Trade Payables 13.60 7.38 Non-Current Liabilities 1,786.53 955.19 Borrowings 3,419.49 3,478.50 Trade Payables 2,275.14 2,350.31 Other Financial Liabilities 0.00 447.98 Other Current liabilities 497.78 821.05 Provisions 260.52 404.02 Current Liabilities 6,452.93 7,501.86 Total Equity and Liabilities 17,171.57 16,674.26 Equity & Liabilities	Particulars (₹ in Lakhs) Q2 FY24 Q2 FY23 YoY% Q1 FY24 H1 FY24 H1 FY23 YoY% Revenue from operations 8,592.94 4,016.07 113.9% 7,956.62 16,549.57 7,219.94 129.2% Other income 66.15 7.89 24.73 90.88 10.54 Total revenue 8,659.09 4,023.96 115.2% 7,981.35 16,640.44 7,230.48 130.1% Total Expenses excluding Depreciation, Amortization&Finance Cost 8,062.08 3,783.46 7,268.46 15,330.52 6,851.62 EBITDA 597.01 240.50 148.2% 712.89 1,309.92 378.86 245.8% EBITDA Margin % 6.89% 5.98% 8.93% 7.87% 5.24% Depreciation & Amortization 72.55 73.41 70.86 143.41 116.01 Finance Cost 107.49 62.78 92.88 200.37 111.01 PBT before exceptional items 416.99 104.30 549.14 966.14 151.83 Exceptional Items 0.00 0.00 0.00 0.00 0.00 PBT 416.99 104.30 549.14 966.14 151.83 Tax Expense 104.59 26.26 138.18 242.77 38.23 PAT 312.41 78.04 300.3% 410.96 723.37 113.60 536.8% PAT Margin % 3.60% 1.94% 5.15% 4.35% 1.57% Other comprehensive income 0.85 0.54 0.00 0.85 0.54 Net PAT 313.26 78.58 410.96 724.22 114.14 Diluted EPS ₹0.15 ₹0.04 ₹0.19 ₹0.34 ₹0.06 Particulars (₹ in lakhs) 30th Sep’23 31th Mar’23 PP&E 1,827.04 1,979.53 Other Intangible Assets 58.15 15.63 Capital Work In Progress 0.00 2.03 Assets under Development 13.99 49.00 Investment Property 326.93 218.93 Investments 0.00 0.00 Other Financial Assets 0.00 0.05 Deferred Tax Assets (net) 22.55 20.96 Other-Non Current Assets 899.82 1,140.05 Trade Receivables 589.20 440.92 Non-Current Assets 3,737.68 3,867.11 Inventories 1,587.43 2,085.66 Trade Receivables 8,901.97 8,556.07 Cash & Cash Equivalents 32.59 1,194.93 Other bank balances 1,006.75 430.31 Other Financial Assets 0.00 92.02 Other Current Assets 1,905.14 448.16 Current Assets 13,433.89 12,807.15 Total Assets 17,171.57 16,674.26 Assets Particulars (₹ in lakhs) 30th Sep’23 31th Mar’23 Equity Share Capital 2,126.54 2,126.54 Other Equity 6,805.57 6,090.68 Shareholders Fund 8,932.11 8,217.22 Borrowings 1,315.07 751.88 Other Non-Current Liabilities 79.12 126.90 Provisions 378.74 69.04 Trade Payables 13.60 7.38 Non-Current Liabilities 1,786.53 955.19 Borrowings 3,419.49 3,478.50 Trade Payables 2,275.14 2,350.31 Other Financial Liabilities 0.00 447.98 Other Current liabilities 497.78 821.05 Provisions 260.52 404.02 Current Liabilities 6,452.93 7,501.86 Total Equity and Liabilities 17,171.57 16,674.26 Equity & Liabilities	Q2 FY24	Q2 FY24	Q2 FY23	Q2 FY23	YoY%	Q1 FY24		**H1 FY24 **	**H1 FY24 **	H1 FY23	H1 FY23	YoY%
		8,592.94		4,016.07		113.9%	7,956.62		16,549.57		7,219.94		129.2%
		66.15		7.89			24.73		90.88		10.54
		8,659.09		4,023.96		115.2%	7,981.35		16,640.44		7,230.48		130.1%
		8,062.08		3,783.46			7,268.46		15,330.52		6,851.62
		597.01			240.50	148.2%	712.89		1,309.92		378.86		245.8%
		6.89%			5.98%		8.93%		7.87%		5.24%
		72.55			73.41		70.86		143.41		116.01
		107.49			62.78		92.88		200.37		111.01
		416.99			104.30		549.14		966.14		151.83
		0.00			0.00		0.00		0.00		0.00
		416.99			104.30		549.14		966.14		151.83
		104.59			26.26		138.18		242.77		38.23
		312.41			78.04	300.3%	410.96		723.37		113.60		536.8%
		3.60%			1.94%		5.15%		4.35%		1.57%
		0.85			0.54		0.00		0.85		0.54
		313.26			78.58		410.96		724.22		114.14
		₹0.15			₹0.04		₹0.19		₹0.34		₹0.06
Particulars (₹ in lakhs)	30th Sep’23		31th Mar’23		Particulars (₹ in lakhs)					30th Sep’23		31th Mar’23
Assets					Equity & Liabilities
PP&E	1,827.04		1,979.53		Equity Share Capital					2,126.54		2,126.54
Other Intangible Assets	58.15		15.63		Other Equity					6,805.57		6,090.68
Capital Work In Progress	0.00		2.03
					Shareholders Fund					8,932.11		8,217.22
Assets under Development	13.99		49.00
Investment Property	326.93		218.93
					Borrowings					1,315.07		751.88
Investments	0.00		0.00
					Other Non-Current Liabilities					79.12		126.90
Other Financial Assets	0.00		0.05
					Provisions					378.74		69.04
Deferred Tax Assets (net)	22.55		20.96
					Trade Payables					13.60		7.38
Other-Non Current Assets	899.82		1,140.05
					Non-Current Liabilities					1,786.53		955.19
Trade Receivables	589.20		440.92
Non-Current Assets	3,737.68		3,867.11
Inventories	1,587.43		2,085.66
Trade Receivables	8,901.97		8,556.07		Borrowings					3,419.49		3,478.50
Cash & Cash Equivalents	32.59		1,194.93		Trade Payables					2,275.14		2,350.31
Other bank balances	1,006.75		430.31		Other Financial Liabilities					0.00		447.98
Other Financial Assets	0.00		92.02		Other Current liabilities					497.78		821.05
Other Current Assets	1,905.14		448.16		Provisions					260.52		404.02
Current Assets	**13,433.89 **		12,807.15		Current Liabilities					6,452.93		7,501.86
Total Assets	**17,171.57 **		16,674.26		Total Equity and Liabilities					17,171.57		16,674.26

Management Commentary

Commenting on the performance of Q2 FY24, Mr. Raman Bhatia, the Managing Director of Servotech Power Systems Ltd. stated:

“We are happy to present our financial and operational performance for the Q2 and H1 FY24. During this period, our revenue increased by 115.2% to ₹8,659.09 lakhs in Q2 FY24, compared to ₹4,023.96 lakhs in Q2 FY23. This growth was primarily on account of the following :

• In the EV division, we witnessed strong demand for our EV chargers due to the rapid uptake and increased demand of electric vehicles and the increasing need for improved EV infrastructure

• In the Solar division, we continued to gain traction for our products driven by increasing focus on adopting sustainable energy for energy needs

Further, EBITDA exhibited tremendous growth of 148.2% to ₹597.01 lakhs in Q2 FY24 from ₹240.50 lakhs in Q2 FY23, with margin expansion of 91 basis points, led by higher share of products having superior margins. Additionally, PAT for Q2 FY24 stood at ₹312.41 lakhs, up from ₹78.04 lakhs in Q2 FY23, with margins increasing to 3.60% from 1.94% in the corresponding period.

In terms of H1 performance, revenue increased by 130.1% and stood at ₹16,640.44 lakhs in H1 FY24 compared to ₹7,230.48 lakhs in H1 FY23. EBITDA increased by 245.8% from ₹378.86 lakhs in H1 FY23 to ₹1,309.92 lakhs in H1 FY24, and margins stood at 7.87% from 5.24% during the same period due to increase in scale of operations. PAT increased by 536.8% and stood at ₹723.37 lakhs in H1 FY24 compared to ₹113.60 lakhs in H1 FY23, margins improved to 4.35% from 1.57% during the same period.

We are elated to share our substantial contribution in promoting a more ecofriendly and sustainable future. Presently, we hold a significant market share in the EV charging sector, with ~3,600 chargers supplied across India in H1 FY24. Additionally, our recently signed MoU with the Uttar Pradesh government, entailing an initial investment of ~₹300 Crs, will enable us to establish an indigenous manufacturing facility capable of producing 10,000 EV DC chargers for the domestic and export market. This endeavor will foster a remarkable ecosystem for EV charging across the country.

Beyond our EV offerings, our solar products have garnered attention in the market. Centered on sustainable and renewable energy, we have effectively established more than 15 MW of solar power plants throughout India, distinguished by qualities such as easy installation, cost-efficiency, and dependability.

We are also happy to share that our recent strategic partnership with EMCOR Power Solutions to manufacture and install 30kW, 60kW, and even more powerful DC fast EV chargers across India will aid in accelerating nationwide adoption of EV.

Additionally, our objective extends beyond merely advancing EV charging infrastructure development; we are dedicated to establishing a prominent market presence and asserting leadership within the industry. To realize this ambition, we are prioritizing the expansion of our production capacity and the broadening of our product portfolio, which will position SPSL as the premier provider of EV chargers to OEMs. This strategic endeavor will enable us to effectively address the burgeoning demand in the EV market by delivering state-of-the-art charging solutions, ultimately cementing our position as the industry frontrunner in OEM service.

Our commitment to providing customer-centric solutions in the sustainable energy space remains steadfast. As we look ahead, we recognize substantial growth potential in the markets we serve, as evidenced by our robust order pipeline.”

Disclaimer

Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Servotech Power Systems Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstance

Contact Details

Ms. Rupinder Kaur Servotech Power Systems Limited Contact: 011-41183116 Email: investor.relations@servotechindia.com

Krunal Shah/Naman Maheshwari Captive IR Strategic Advisors Pvt. Ltd. Contact: +919372467194 Email: Krunal@cap-ir.com/naman@cap-ir.com