Tembo Global’s FY30 Bet: Can Solar, Defence and EPC Drive ₹20,000 Crore Revenue? 

Synopsis: Tembo Global is pursuing an ambitious FY30 target of Rs 20,000 crore in revenue, backed by growth across EPC, engineering, solar and defence businesses. With a Rs 1,548 crore order book, solar projects nearing commissioning and high-margin defence manufacturing set to commence, management believes multiple growth engines could drive its next phase of expansion.

The last financial year, i.e., FY26, was a landmark year for Tembo Global Industries, as the firm demonstrated robust growth across its engineering products and EPC segment while also positioning itself for the establishment of growth verticals of the future. 

In recent years, Tembo has come a long way from being a simple engineering products manufacturer and transformed into a diverse industrial conglomerate engaged in engineering solutions, EPCs, solar power, and defence manufacturing, among others. 

Speaking at Tembo’s FY26 results presentation, the company’s management revealed its plans for the future, which include ambitions such as reaching the milestone of generating revenues worth Rs 20,000 crore by FY30. 

Although the goal is quite challenging in light of the company’s current position, management is optimistic about achieving it through a combination of EPC execution, solar power deployment, and defence manufacturing, among others.

With a market cap of Rs 1,050 crore, the shares of Tembo Global Industries Ltd closed at Rs 563 and are trading at a PE of 11.5 compared to their industry’s PE of 21.8. The shares have given a return of more than 180% in the last 5 years.

FY26 Marks a Year of Strong Financial Performance

The company kicked off FY27 after posting some of its best performances to date. In FY26, Tembo posted a revenue growth of 46.7%, bringing the total revenue to Rs 1,090 crore. This performance was marked with good profitability gains, with EBITDA and PAT growing by 55.4% and 79.7%, respectively. 

Management explained that this was due to good performance of its business lines as well as a focus on high-margin opportunities. The engineering solutions division maintained its position as the main driver of growth through robust demand in infrastructure-related sectors such as oil and gas, marine, water, and EPC works. 

According to management, tailwinds in the form of favorable industry conditions enabled by infrastructure investment and energy consumption contributed towards this performance during the period. The FY26 performance sets the stage for Tembo’s big dreams in the future.

Engineering and EPC Continue to Drive the Core Business 

Despite the rising focus on solar and defence, the management consistently made it clear that engineering and EPC are the cornerstones for Tembo’s operations today. As of now, Tembo has an order book worth about Rs 1,548 crore, while the bidding book surpasses Rs 2,200 crore. 

These figures serve as a good indicator of further revenue growth and point to Tembo’s growing involvement in opportunities connected to infrastructure. The main highlights for the fiscal include winning the status of L1 for an offshore project in Kuwait worth roughly Rs 300 crore. 

According to the management, winning this tender marks a big step forward in establishing Tembo’s international EPC credentials. However, some of the opportunities in the Middle East are progressing at a slower pace than expected due to delayed government project awards, yet the situation should change for the better in the second part of FY27.

Capacity Expansion Aims to Support the Next Leg of Growth

In preparation for future demands, Tembo has been aggressively increasing its manufacturing capacities. In the course of the earnings call, the management informed us that it would take two to three years to build the capacity from the expanded facilities. 

Instead of immediately achieving the full utilisation of the new facilities, the firm is planning to ensure that there is adequate capacity to help grow different businesses. The management stated that the factories are currently working in two shifts and continue to get orders on a consistent basis. 

In addition, the company has automated and acquired more machinery to help increase efficiency in production and facilitate exports. This will not only help enhance the manufacturing capabilities but will also enable the company to undertake projects at higher volumes.

Solar Projects Could Create a New Revenue Stream 

The most important diversification strategy adopted by Tembo includes venturing into solar power generation. As mentioned during the earnings call, the company is working on establishing 28 solar power plants, which are expected to get commissioned either at the end of Q2 or at the beginning of Q3 of FY27. 

Out of these 28 projects, seven to eight projects were already close to getting commissioned during the earnings call period. The cost of execution of the solar project is estimated to be around Rs 600 crore, out of which Rs 300 crore was already incurred. Financing has been done through debt and equity sources. 

Management feels that solar power can be a stable source of income through PPAs for the company, while engineering and EPC businesses are cyclic in nature. Solar power is expected to start adding to the revenues in FY27.

Defence Manufacturing Represents a High-Margin Opportunity

One of the most promising opportunities mentioned in the earnings call is the entry into the defence manufacturing sector by the company. Tembo obtained a licence to manufacture small arms on December 31, 2025, and followed it up with a licence to manufacture ammunition in a variety of calibres on April 19, 2026. 

Management mentioned that obtaining both licenses took just under a year. This allowed the company to start moving fast towards commercialisation of both types of weapons. It entails producing small arms in the initial period and slowly moving into ammunition production in the following three years. 

Significantly, management said that manufacturing would receive full backing through a buyback from a counterpart in Europe. Even though there was no revenue contribution from defence in FY26, management expected that revenue would kick off in the last quarter of FY27.

Management Expects Defence to Deliver Superior Profitability 

Aside from growth in revenues, defence looks to be especially promising based on its profitability prospects. At the earnings presentation, the company’s management noted that defence manufacturing could potentially provide profit after tax margins of around 30%-35%, which is much better compared to most other engineering-related industries. 

Even though defence will account for only about 5%-10% of the estimated FY27 revenues, the company will start manufacturing defence goods only towards the end of the financial year. However, management was not done talking about its optimism and even provided somewhat more optimistic estimates for the upcoming years. 

According to management, in the first full year of its operations, the defence business might provide the company with Rs 300-400 crore worth of revenues as well as a profit after tax of Rs 170-180 crore.

Funding Growth Through Strategic Investments 

Naturally, such an expansion will require considerable capital expenditure. Management revealed that borrowings worth around Rs 300 crore to Rs 350 crore are projected for FY27, mainly to finance solar and defence projects as well as working capital needs. 

While the amount of borrowing has increased, the management has confidence that the company’s earnings will be sufficient enough to fund its investments. The company believes that there are going to be efficiencies within operations, improved management of projects, and enhanced efficiency levels which will add to its EBITDA. 

The management also highlighted that Tembo’s business model is highly diversified. Engineering can provide good margins, EPC brings volume and scale, solar brings in recurring revenues, and defence is a high-margin area.

Can Tembo Realistically Reach Rs 20,000 Crore in Revenue by FY30?

The most debated topic discussed during the earnings call was management’s FY30 ambition of generating Rs 20,000 crore of revenues. When pressed on how realistic the target was, management conceded the difficulty but reiterated its determination to achieve the target. 

Management believes that there are many avenues for growth, namely through infrastructure, engineering manufacturing, EPC execution, solar power and defence. Whereas management has guided to grow revenues by around 30% to 40% in FY27, management thinks that continuing to expand into new business segments could drive growth faster going forward. 

It is too early to tell whether management will reach this target, but what is clear from the discussion in the earnings call is that management does not think about growing incrementally any more. Management tries to build a diversified industrial platform, with multiple revenue streams that can enable Tembo to change scale during the rest of the decade. 

Tembo Global has a strong order book, growing capacity, solar projects under construction and defence manufacturing ramping up. In all probability, FY27 could be the starting point of a journey towards management’s FY30 ambition.

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