Siemens, ABB And Hitachi Buy This Company's Products. Now Data Centres Are Calling

Rishabh Instruments is positioning data centres, expansion in the U.S. market and new medium-voltage products as key growth drivers after improving profitability and increasing its focus on its Electrical and Electronic Instruments business.

The Nashik-based company, which manufactures current transformers, metering systems, control and protection devices, has benefited from rising investments in data centres, renewable energy and electric vehicles. Management has also exited loss-making automotive contracts in its European die-casting business to improve margins and strengthen returns.

The shift is already reflected in the company's financial performance. Revenue rose 7.6% year-on-year to Rs 775 crore in FY26. EBITDA increased 161% to Rs 126 crore, while margin expanded by 960 basis points to 16.3%. Net profit climbed 292% to Rs 82 crore.

EEI Drives Growth

Rishabh operates through two segments: Electrical and Electronic Instruments (EEI) and High-Pressure Die Castings (HPDC). The company manufactures 99% of its products in-house.

The EEI business has become the company's main growth engine, contributing 69.3% of revenue in FY26, compared with 63.4% a year earlier. EEI revenue increased 17.5% year-on-year, while HPDC revenue declined 9.6% as the company exited legacy automotive contracts that were generating losses.

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The company is a manufacturer of analog panel meters and low-voltage current transformers. Its products are used across data centres, renewable energy projects and electric vehicle infrastructure. Rishabh produces about 6,000 current transformers a day.

Current transformers measure and monitor electricity flow across power networks. Growing investment in data centres is increasing demand for such monitoring equipment.

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Data Centre Opportunity

Data centres require continuous and reliable power supply, making power monitoring a critical function.

Rishabh's current transformers are installed behind electricity meters to measure current flow across networks. The company complements this hardware business with PROMOTIC SCADA, a software platform developed by its Czech subsidiary, Microsys.

The software enables visualisation, telemetry and control of power networks, allowing operators to monitor electrical systems from a single platform. The combination of hardware and software allows customers to source both monitoring equipment and network management solutions from the company.

This approach has helped Rishabh secure repeat orders from customers, including Sify in India, which contributes 34% of total revenue. The company is also executing similar projects in the UK and Ireland.

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Rishabh's customer base includes industrial and infrastructure companies such as Siemens, ABB, Hitachi and Larsen & Toubro. These relationships span multiple product categories and end markets, including power distribution, industrial automation and electrical infrastructure.

The U.S. market is emerging as another growth opportunity. Rishabh's U.S. subsidiary, Sifram Tinsley, recorded 50% year-on-year growth for two consecutive years, with revenue rising from $1 million to $2 million and then to $3 million in FY26.

Management is targeting another 40%-50% growth in FY27 and aims to scale the U.S. business to about Rs 100 crore in revenue over the next three to four years.

Expanding Product Portfolio

To address the U.S. market, Rishabh is pursuing UL certifications for medium-voltage current transformers, voltage transformers and potential transformers.

These certifications are required because U.S. electrical standards differ from those used in India and Europe. Products must be redesigned and tested before they can be supplied to U.S. data centres and power infrastructure projects.

The company expects design and specification work for medium-voltage voltage transformers and potential transformers to be completed by the end of FY27.

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Capacity Expansion

Rishabh is expanding manufacturing capacity to support future growth after facing constraints across several product categories.

The company has expanded its Nashik facility, adding two new buildings and doubling the plant's built-up area. The facility is currently being commissioned.

The expansion will allow the company to double production across several products, including current transformers, analog panel meters, shunts and cam switches. Current transformer capacity has already increased from 6,000 units to 10,000 units a day.

The new facility also includes dedicated manufacturing space for solar inverters and medium-voltage products.

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Europe Turnaround

Europe accounted for 60% of FY26 revenue and remains a key market for the company.

Its subsidiary, Lumel SA, recently established an electronics assembly line with support from the European Union. The facility will also manufacture medium-voltage controllers.

Another subsidiary, Lumel Alucast, is undergoing a turnaround. The business historically depended on automotive customers for non-ferrous pressure castings but is shifting towards non-automotive applications to improve profitability.

As part of that strategy, the company exited about Rs 100 crore of loss-making automotive contracts. The move reduced Lumel Alucast's annual revenue base to about Rs 180 crore but improved earnings.

The business reported positive adjusted EBITDA of Rs 3.3 crore in FY26, compared with a loss of Rs 15 crore in FY25. Management expects revenue to remain around Rs 180 crore in FY27, break even during the year and achieve double-digit margins by FY28 as new projects ramp up.

Solar Business Gains Momentum

The company is also building its solar inverter business within the EEI segment.

Solar revenue increased 8% in FY26 as management focused on product design and profitability. The company expects solar revenue to double to Rs 24 crore-Rs 25 crore in FY27 and aims to build the business into a Rs 100 crore segment over time.

Management expects new product launches, exports and government programmes such as the PM Surya Ghar Muft Bijli Yojana to support growth.

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Balance Sheet And Outlook

Rishabh remains debt-free and held cash of Rs 127.6 crore at the end of FY26.

Return on equity stood at 11%, while return on capital employed was 13.5% in FY26. Management expects the EEI segment to grow 20%-25% in FY27 while maintaining operating margins of 20%-22%.

The company's growth strategy is centred on data centres, U.S. expansion and medium-voltage products. Successful execution could expand its addressable market over the coming years. The stock has gained 87% over the past year and trades at a price-to-earnings multiple of 26.4 times. The company has no listed peers.

Key risks include geopolitical tensions, tariff-related disruptions, supply-chain challenges, energy shortages, competition from Chinese manufacturers in the solar segment and potential underutilisation of capacity.

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