Ashish Kacholia Stock with Revenue CAGR Guidance of 20% in the next 5 Yrs to Add to Your Watchlist

Synopsis: Megatherm Induction Limited targets strong growth with revenue reaching ₹450 crore in FY27 and ₹950 crore by FY31, supported by exports, a robust order book of ₹430 crore, and rising EBITDA to ₹152 crore.

This Micro-cap Transformer Stock, engaged in designing, manufacturing and supplying induction‑based metal heating and melting equipment, power‑distribution systems and transformers for industrial customers, is in focus after the company management expects 196 percent revenue growth guidance for the next five years.

With a market capitalization of Rs. 365.51 crore, the shares of Megatherm Induction Limited were currently trading at Rs. 194.65 per equity share, down nearly 0.10 percent from its previous day’s close price of Rs. 194.85. 

Company Overview

Megatherm Induction Limited is an Indian company that mainly works with metal heating and melting systems using induction technology. The firm designs and supplies industrial equipment used for heating, melting, and processing metals in sectors such as steel, foundries, and forging. It also manufactures and supplies transformers used in industrial power systems, especially those linked with induction heating and melting applications.

Revenue Guidance

Megatherm Induction Limited has guided for strong revenue growth, with FY27 revenue expected to reach around Rs. 450 crore, up about 40 percent from Rs. 321 crore in FY25 Growth will be driven mainly by induction products and allied equipment, contributing about Rs. 300 crore, including Rs. 210 crore from domestic/SAARC markets and Rs. 90 crore from North America. The transformer segment is expected to add around Rs. 85 crore (Rs. 77 crore domestic and Rs. 8 crore exports), while after-sales services may contribute Rs. 70 crore.

Looking ahead to FY28-29, revenue is projected to rise to Rs. 605 crore, implying an 88 percent increase over FY25. Domestic/SAARC induction business is expected at Rs. 250 crore, while North America may contribute Rs. 115 crore. Transformers could grow to Rs. 160 crore (Rs. 150 crore domestic and Rs. 10 crore exports), and after-sales revenue is estimated at Rs. 80 crore, indicating steady expansion across segments.

By FY31-32, revenue is expected to scale up to Rs. 950 crore, a 196 percent growth compared to FY25. North America alone could contribute Rs. 225 crore, while domestic/SAARC may reach Rs. 325 crore. Transformers are projected at Rs. 300 crore (Rs. 265 crore domestic, Rs. 35 crore exports), and after-sales at Rs. 100 crore, reflecting a balanced mix of domestic strength and rising global presence. Over the next six years, the stock is projected to achieve a revenue growth Compound Annual Growth Rate (CAGR) of 19.82 percent.

EBITDA Margin Guidance

Megatherm Induction Limited is expected to see strong EBITDA growth in line with its revenue expansion. EBITDA is projected to increase from current levels to around Rs. 59 crore in FY27, Rs. 91 crore in FY28-29, and Rs. 152 crore by FY31-32. This steady rise reflects improving operating leverage, better product mix, and higher contribution from exports and after-sales services, supporting overall margin expansion.

Order Book & Order Book Guidance

Megatherm Induction Limited has a strong current order book of around Rs. 430 crore, reflecting healthy demand across its business segments. The transformer segment contributes about Rs. 40 crore, including Rs. 35 crore from domestic and Rs. 5 crore from exports. Induction products and allied equipment form the largest share at approximately Rs. 380 crore, driven by demand from domestic, SAARC, and global markets (North America), along with Rs. 10 crore from after-sales services.

Looking ahead, the company expects an order carryover of around Rs. 260 crore into FY27, providing strong revenue visibility. This includes about Rs. 25 crore from transformers and nearly Rs. 235 crore from induction and allied equipment across regions like North America and other international markets.

Solar Transformer Growth

Megatherm Induction Limited is focusing on solar transformers as a key growth area, especially through inverter duty transformers (IDT) and multi-winding transformers. These products have a range of 5 MVA to 40 MVA, and the company is targeting a production capacity of 150–160 MVA per month by H2 FY27, reflecting strong demand in the renewable energy sector.

Financially, the company expects revenue potential of around Rs. 150 crore by FY27, including Rs. 110 crore from IDT and Rs. 40 crore from furnace transformers. It is targeting an EBITDA margin of around 15 percent, supported by efficient operations. With Rs. 30 crore capex already invested and an expected asset turnover of 5x, the company aims to reach Rs. 250 crore revenue by FY31.

JV with Cyprium Induction LLC

Megatherm Induction Limited has entered into a joint venture with Cyprium Induction LLC to expand its presence in the North American market. Under the agreement, Cyprium will hold 50.01% stake, while Megatherm will hold 49.99%. The JV will focus on selling and promoting Megatherm’s products, including metal heating equipment, automation, and power distribution solutions. This partnership is expected to boost exports and improve sales opportunities in the US market.

Products Offering

Megatherm Induction Limited manufactures a range of induction-based heating and melting solutions, including induction products and transformers. Its allied offerings include continuous casting machines, fume extraction systems, ladle refining furnaces, and electric arc furnaces, catering primarily to the metal and steel processing industry with integrated and efficient industrial solutions.

Global Presence

Megatherm Induction Limited has a strong global presence with over 3,000 installations across more than 52 countries. Its footprint spans key regions including South America, Africa, Asia (Gulf, SAARC, Southeast Asia), Europe, and the USA, showcasing its widespread reach across five continents. 

The company serves diverse markets such as Argentina, Brazil, Saudi Arabia, the UAE, Bangladesh, Indonesia, and South Africa, reflecting strong international demand and a well-established global distribution and service network.

Manufacturing Facility

Megatherm Induction Limited operates a state-of-the-art production and testing facility at Vidyasagar Industrial Park, Kharagpur, West Bengal, spread across 8 acres. The facility includes an advanced R&D lab and training centre, supporting innovation and skill development. With a transformer manufacturing capacity of 2,000 MVA, scalable to 3,000 MVA, it is among the largest facilities in Eastern India.

Client Base

Megatherm Induction Limited serves a diversified client base across industries such as metals, automotive, engineering, and power. Its key clients include Hindalco (Aditya Birla Group), SR Rungta Group, M M Forgings, Tata Motors, Mahindra, Indian Railways, BHEL, Shyam Metalics, Prakash Industries, Sundram Fasteners, Sarda Energy & Minerals, Talbros Engineering, and CESC, showcasing strong industry relationships and credibility.

Shareholding Pattern

In September 2025, Megatherm Induction Limited had a majority stake held by the promoters at 71.83 percent, foreign institutional investors at 0.27 percent, and the public at 27.90 percent. Ace investor Ashish Kacholia holds a 1.68 percent stake in Megatherm Induction Limited, valued at Rs. 6.1 crores, consisting of 3,16,800 shares. 

Recent Quarter Results

Coming into financial highlights, Megatherm Induction Limited’s revenue has increased from Rs. 148 crore in H1 FY25 to Rs. 159 crore in H1 FY26, which has grown by 7.43 percent. The net profit has also grown by 33.33 percent from Rs. 9 crore in H1 FY25 to Rs. 12 crore in H1 FY26. Megatherm Induction Limited’s revenue and net profit have grown at a CAGR of 19.95 percent and 175.89 percent, respectively, over the last three years.

In terms of return ratios, the company’s ROCE and ROE stand at 21.1 percent and 16.3 percent, respectively. Megatherm Induction Limited has an earnings per share (EPS) of Rs. 12.8, and its debt-to-equity ratio is 0.23x.

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