1. Executive Overview

MV Electrosystems Limited is a technology-driven manufacturer of electrical and power electronics equipment for the Indian railway rolling stock industry, incorporated in 2009 and headquartered in Faridabad, Haryana. The Company designs, develops, assembles and manufactures a portfolio spanning IGBT-based 3-Phase Drive Propulsion Equipment for electric locomotives, switchgear panels for railway coaches and EMUs, cable protection and management products and electrical components, systems and sub-systems. It operates within India's rail infrastructure modernisation cycle driven by mandated broad-gauge electrification, Make-in-India procurement policy and network expansion including upcoming high-speed corridors.

The Company's defining commercial milestone came on September 15, 2025, when it received final approval from Chittaranjan Locomotive Works ("CLW") and RDSO, Indian Railways for its indigenously designed 3-Phase Propulsion Equipment. Commercial supplies to Indian Railways commenced in March 2026. With this approval, MV Electrosystems is positioned as one of the very few global players with proprietary in-house technology for rail propulsion equipment, and one of only two Indian players holding such capability alongside unlisted Medha Servo Drives.

Financially, the Company operates on a small but rapidly evolving base: Revenue from Operations of ₹49.43 Crore in Fiscal 2026 (down from ₹62.64 Crore in Fiscal 2025), with a reported net loss of ₹12.63 Crore in Fiscal 2026 reflecting a step-change in R&D and inventory build ahead of order execution. As at June 30, 2026, the Company had an executable outstanding order book of ₹921.64 Crore (₹9,216.40 million) for supply of 564 3-Phase Propulsion Equipment units to CLW, BLW and PLW — visible revenue conversion that materially exceeds Fiscal 2026 revenue.

2. Business Model and Revenue Streams

Revenue Model

The Company's business is conducted on a purchase-order or tender basis through Indian Railways' production units (CLW, BLW, PLW) and Modern Coach Factory, Raebareli. Tenders are generally issued annually in line with the railway budget for expansion of rolling stock. Revenue is realised upon delivery and acceptance, with comprehensive Annual Maintenance Contracts ("AMC") typically spanning three to five years attached to major supply orders — providing a modest recurring revenue overlay to the primary equipment supply stream.

Customer Concentration

Indian Railways is the single largest customer, contributing:

Broader customer concentration remains elevated across all buckets:

Concentration is structural — a natural consequence of a business built around a single primary customer (Indian Railways) — but the customer's investment-grade sovereign credit and long-standing procurement continuity partially offset the standalone concentration risk.

Fiscal 2026 Order Wins

During Fiscal 2026, the Company received four purchase orders from Indian Railways units aggregating to ₹737.66 Crore (excluding GST and AMC) for supply of 450 3-Phase Propulsion Equipment units:

Additional post-Fiscal 2026 wins include a Letter of Acceptance from Modern Coach Factory, Raebareli for 6 MEMU (12-Car Rakes) at ₹86.55 Crore plus a 5-year AMC of ₹4.69 Crore, taking the executable order book to ₹921.64 Crore as at June 30, 2026.

3. Products and Service Portfolio

Product Segments

1. IGBT-based 3-Phase Drive Propulsion Equipment (the flagship product) — includes traction converter-inverter systems, auxiliary converters, vehicle control units / train control management systems and driver display units. All designed and developed indigenously; commercial supplies to Indian Railways commenced in March 2026 following CLW/RDSO approval received September 15, 2025.
2. Switchgear panels and electrical cabinets — for railway coaches, EMUs and locomotives.
3. Cable protection and management products — flexible conduits, cable protection conduit tubing, conduit end fittings and expandable cable jackets. This segment is being relocated from Unit 1 to Unit 2 to free up Unit 1 for propulsion equipment manufacturing.
4. Electrical components, systems and sub-systems for the railway industry.

Products in Design/Development Pipeline

• IGBT-based 3-Phase Propulsion System with Composite Converter for WAP-7 locomotives (developmental order of ₹2.51 Crore received from CLW on September 10, 2025).
• 2×500 KVA IGBT-based Hotel Load Converter for WAP-7 locomotives (developmental order of ₹0.80 Crore received on December 1, 2025).
• IGBT-based Three Phase Electrics for AC EMUs / MEMUs, Vande Bharat trainsets, metro trains and distributed-power long-distance trains.
• Automatic Fault Locator system for 25 KV Rail overhead electrification — under a three-year Business Cooperation Agreement dated August 13, 2025 with PNC Technologies Co. Ltd., South Korea.

Manufacturing Infrastructure

1. Unit 1 (Village Baghola, Palwal, Haryana) — existing assembling-cum-manufacturing facility, RDSO-approved for propulsion equipment production. Recently installed a Surface Mount Technology (SMT) line for in-house PCB assembly (March 2026) and one dedicated propulsion test set-up.
2. Unit 2 (Nangla Bhiku, Palwal, Haryana) — new facility, "Consent to Operate" received June 22, 2026. Will take over cable protection and interconnected products manufacturing from Unit 1, and add three additional propulsion test set-ups.
3. Research, Design & Development Centre (Faridabad, Haryana) — DSIR-recognised as of June 12, 2026; 45 permanent employees as at May 31, 2026 (~21.84% of total workforce), including 2 Ph.D. holders, 9 M.Tech., 7 B.Tech. and 3 B.E. engineers plus diploma and ITI-certified technicians.

R&D Investment Intensity

Total engineering, research, design & development expenses:

The elevated Fiscal 2026 R&D ratio reflects the intensive development phase for propulsion equipment ahead of commercial launch, and is expected to normalise as order-book revenue scales.

4. Key Business Strengths

• Sole indigenous, listed Indian player with proprietary propulsion technology — Following CLW/RDSO approval in September 2025, MV Electrosystems is one of only two Indian companies (alongside unlisted Medha Servo Drives) with in-house IGBT-based 3-Phase Drive Propulsion technology, insulating the Company from royalty and technology-transfer costs borne by international OEMs' local subsidiaries.
• High regulatory entry barriers — The propulsion equipment approval process involves multi-year RDSO/CLW design review, prototype clearance, laboratory testing, field endurance trials (minimum 50,000 km) and periodic revalidation — creating substantial insulation from new-entrant competition.
• Deep in-house R&D bench across five engineering disciplines — 45-member DSIR-recognised R&D team covering power electronics, embedded systems, mechanical engineering, thermal design and software engineering, enabling swift response to design changes and specification revisions.
• Visible near-term revenue conversion — Executable order book of ₹921.64 Crore as at June 30, 2026, materially exceeding Fiscal 2026 revenue of ₹49.43 Crore and providing multi-year revenue visibility as tenders execute.
• Long-standing Indian Railways relationship — Continuous supplier to Indian Railways since 2009, with the added strength of being a CLW-approved manufacturing partner for propulsion equipment.
• Vertical integration progressing — Recent SMT line commissioning (March 2026) enables in-house PCB assembly for control electronics, reducing lead times, improving quality control and lowering per-unit production cost.
• Alignment with Make-in-India and Atmanirbhar Bharat policy tailwinds — Positioning as an indigenous supplier benefits from procurement preference policy, tariff protection against imports and the Government's stated push to substitute foreign propulsion technology.

5. Future Growth Strategy

• Product diversification within Indian Railways — Extending the product portfolio to include hotel load converters, composite converters, IGBT-based propulsion for EMUs / MEMUs / Vande Bharat / metro trains and other electrical assemblies to increase customer wallet share and drive sustainable revenue growth.
• Capacity expansion at Unit 2 — Setting up an additional assembling-cum-manufacturing facility at Nangla Bhiku, Palwal, with three specialised propulsion test set-ups to enable parallel testing and higher annual throughput; leveraging existing Unit 1 infrastructure and machinery for shared asset productivity.
• Capture of integrated propulsion kit opportunity — Ministry of Railways' March 2025 directive mandating procurement of 100 integrated propulsion kits by CLW and BLW opens a system-integration opportunity beyond component supply; MV Electrosystems intends to develop related bogies, transformers, cooling units, traction motors and TCMS components to participate at the kit level.
• Adjacent-industry diversification — Applying the Company's power electronics and system engineering expertise to renewable energy projects, industrial and commercial power conversion systems, energy storage systems and electric mobility and charging infrastructure — both domestically and globally.
• Export orientation — Pursuing export opportunities for propulsion equipment to command higher realisable value on products, leveraging Make-in-India indigenous IP status.
• Continued vertical integration and localisation — Progressive substitution of imported components with domestically sourced or in-house-manufactured alternatives (SMT line already commissioned; further capital-intensive machinery including hydraulic press brake and laser cutting to serve both units) to shorten lead times, reduce foreign-exchange exposure and improve gross margins.
• Strategic international collaborations — Executing the Business Cooperation Agreement with PNC Technologies (South Korea) for Automatic Fault Locator systems and the Consortium Agreement with Hansung Heavy Industrial (Republic of Korea) for MEMU propulsion tenders, extending the Company's reach beyond core locomotive propulsion.