STOCK STORY: Vivid Electromech Ltd

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Established in 1990, Vivid Electromech Limited is an Indian electrical power distribution and industrial automation systems provider.

It delivers end-to-end engineering, fabrication, assembly, type testing, and commissioning of Low-Voltage (LV) and Medium-Voltage (MV) switchboards, intelligent motor control centres, and turnkey industrial automation architectures.

Its products cater to sectors such as Data Centre & Technology, Infrastructure, Construction & Real Estate, including Metro Projects, Solar & Renewable Energy, Industrial Manufacturing and Machinery etc. It maintains OEM associations with ABB, Lauritz Knudsen Electrical & Automation (LK), and Schneider Electric and are licensed by ABB India Limited to manufacture and integrate ArTu K low-voltage switchboards using ABB components.

Electrical panels and switchgear — that distribute and protect power inside a building, factory or data centre — are built by four broad types of companies in India.

Vivimed has deliberately moved its mix toward mission-critical panels for data centres, metro/rail traction and industrial automation, rather than ordinary commercial or residential distribution boards. This has been a conscious shift over the last five years, stepping away from EPC, commercial and residential work where margins are low and focusing on manufacturing for sectors where downtime is unacceptable and specification is exacting, leading to higher margins.

The company's partnership with ABB forms a core pillar of its low-voltage product line. As a Licensed ArTuK Partner, Vivid manufactures modular type-tested LV switchboards integrating ABB Emax 2 air circuit breakers, Tmax XT moulded case circuit breakers, and Ekip electronic trip units within standardised structural enclosures. Vivid has received the ABB ArTuK Business Excellence Award (Platinum Category) across multiple consecutive evaluation periods (2022, 2024, 2025). In the medium-voltage segment, Vivid acts as an authorised MV system integrator, assembling ABB vacuum interrupters, Ring Main Units, and protection relays.

Vivid’s relationship with Schneider Electric encompasses Medium-Voltage integration licensing established in 2014 and Core Components Partnership certification under IEC 61439 established in 2019. This enables the integration of Masterpact air circuit breakers and Compact NSX switchgear into custom assemblies. Furthermore, the company functions as an authorised IEC-compliant franchise partner for Lauritz Knudsen (formerly L&T Electrical & Automation) and maintains a strategic alliance with Hitachi Hi-Rel Power Electronics as an authorised channel partner for low-voltage drive modules and medium-voltage variable frequency drive systems across Maharashtra.

Data centres and information technology infrastructure represent the fastest-growing end-market for the firm, comprising roughly 62% of the forward order book (~₹124 crore of Rs 200 cr total book) as of late 2025. The operational demands of Tier III and Tier IV data centres necessitate fault-tolerant electrical architectures, dual incoming bus sources, sub-cycle static transfer switches, Class 0.2 power metering, and integrated thermal telemetry. Vivid was recognised with a Certificate of Appreciation by NTT India for its contributions as an MEP provider to major data centre deployments.

Public sector infrastructure and EPC projects account for approximately 30% of total revenue. Deployments in this category include metro rail distribution networks, water treatment systems, port facilities, and nuclear research installations. Heavy manufacturing and continuous process industries—including chemicals, steel, cement, pharmaceuticals, and automotive assembly—account for the remainder of demand, driven by requirements for intelligent motor control centres, harmonic-mitigated APFC panels, and medium-voltage substation switchgear.

• Reliance on OEM Partner Franchises: A significant portion of revenue is derived from certified licensed partnerships. Maintaining these agreements requires passing periodic technical audits and meeting strict quality thresholds. Any non-renewal or dispute could affect access to proprietary type-tested designs.

• Geographic Concentration in Western India: Domestic sales exhibit high geographic concentration, with Maharashtra accounting for 88.62% of revenue in H1 FY26. This makes top-line performance sensitive to capital expenditure patterns, infrastructure disbursements, and industrial approvals within the state.

• Working Capital and Receivable Cycles: Working capital is deteriorating, not improving, alongside the growth: debtor days rose from 142 (FY25) to 212 (FY26); trade receivables nearly doubled from Rs 60.55 cr to Rs 116.49 cr even as revenue grew only 29% — receivables are growing faster than sales.

• Commodity Price Exposure: The bill of materials consists largely of ETP-grade copper, CRCA sheet steel, aluminium and imported electronic components. In fixed-price procurement contracts lacking dynamic pass-through provisions, input cost volatility can compress gross margins.

• High Customer Concentration: The top-10 customers account for 57.0% of revenue in H1 FY26. No long-term contracts with any of the customers is an added risk.

• Both the CFO and Company Secretary changed within roughly a year of their original appointments: Pramod Beloshe (CFO) and Chaitali Shah (CS) were appointed in July 2025, shortly before the IPO; Varun Mishra and Pranjul Gupta were appointed to replace them effective August 2026 — a KMP-stability flag on a board that has been public for only a few months.

• Mechtech Infrasolutions — already a related-party trading counterparty in FY24–FY25 per the RHP’s related-party table — was acquired as a 99% subsidiary for Rs 0.99 crore in 2026, converting an existing related-party relationship into a consolidated entity; the valuation basis has not been independently verified in this report.

• No independent external credit rating for Vivid’s bank facilities was located in the sources reviewed, despite the FY26 borrowings build — unusual, though not disqualifying, for a company of this size taking on new debt.

• Data Centre Hyperscale Investment: India’s rapid build-out of data centres provides steady demand for custom electrical assemblies. Vivid’s experience in delivering Class 0.2 RPPs, data centre PDUs, and intelligent PMCCs to operators like NTT, ST Telemedia, and CtrlS positions the business to capture higher-density power distribution contracts.

• Manufacturing Expansion: The capex of Rs 43.84 crs toward a new manufacturing unit - a 120,000 sq. ft. automated manufacturing facility at Ambernath - directly addresses current capacity limits, enabling the company to process larger orders, reduce fabrication lead times, and expand its footprint across Northern and Southern Indian industrial corridors. Phase-1 commercial operations is targeted for end-August 2026 and full commissioning for October 2026, adding 14,300 LV and 700 MV verticals of annual capacity (roughly 3x current capacity of ~7,500 verticals/year).

• Grid Modernisation and Renewable Integration: The growth of utility-scale solar and wind projects requires specialised switchgear. Vivid’s type-tested 800 V AC distribution boards and containerised plug-and-play substation modules provide an addressable portfolio for utility-scale developers looking to reduce balance-of-plant installation times.

• Digitalisation and Smart Switchgear: The integration of IoT monitoring, IEC 61850 protocol support, and cloud-connected SCADA platforms transitions Vivid from a pure mechanical fabricator into an intelligent power management provider, creating potential for higher-margin lifecycle support and remote monitoring service contracts.

• Received a Rs 30.13 cr purchase order (including amendments) from STT Global Data Centres India for the SITC of PDU and DWDM Panels, reinforcing the Company's strong presence in the data centre sector.

• Secured a ₹20.24 Cr work order from Univastu India for the design, manufacture, supply, installation, testing and commissioning of MV switchgear, panels and distribution boards for a major infrastructure project.

• Financial Performance: Revenue grew to Rs 32.68 cr in Q1 FY27, up ~36% from Rs 24.05 cr in Q1 FY26, reflecting continued execution momentum.

Worth keeping it on the watchlist and observing how the story unfolds.

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