Modison: electrical contacts and a margin step-up
A niche maker of silver and copper-tungsten contacts for switchgear has lifted its margins for four quarters running. This page looks at how real that is, what management is targeting, and what different outcomes would imply.
The short version
- Margins have broken out. Operating margin ran 13%, 13%, 25% and 19% over Sep-25 to Jun-26, after eight straight quarters in a 6–12% band. Q1 FY27 profit (₹34 Cr) was about half of all of FY26.
- Growth is broad. Revenue rose about 45% in FY26 and 102% in Q1 FY27, against roughly 3% a year for the global electrical-contacts market. That points to share gains through import substitution and exports.
- Management raised its sights. The old "₹1,000 Cr by 2030" revenue target is now FY28, with ₹1,365 Cr for FY30. Trailing revenue is already ₹847 Cr.
- The stock has moved too. It is up about 165% in a year. The P/E of ~12.5x is close to its own 10-year median (14.5x), but price to book (~4.8x) is about three times its median.
- Main uncontrolled risk: silver and tungsten prices, which are only partly hedged.
Business
Mumbai-based Modison makes electrical contacts and contact assemblies for low-, medium- and high-voltage switchgear: silver and silver-alloy contacts, copper-tungsten parts, bridging assemblies, crowns, bridge washers for vacuum interrupters and finger contacts. These are high-reliability components sold to switchgear and circuit-breaker makers, with GE, Siemens and ABB among its customers. More switchgear for power grids and data centres means more contacts.
Financial history
| ₹ Cr | Revenue | Net profit | Operating margin | Profit growth |
|---|---|---|---|---|
| FY24 | 405 | 22 | 7.9% | – |
| FY25 | 490 | 25 | 9.0% | +12% |
| FY26 | 710 | 73 | 16.5% | +194% |
| Q4 FY26 (Mar-26) | 287 | 36 | 24.8% | +278% YoY |
| Q1 FY27 (Jun-26) | 270 | 34 | 18.5% | +604% YoY |
| TTM (Jun-26) | 847 | – | – | – |
A refinery fire in Feb 2026 cost ₹10.6 Cr (₹1.7 Cr recovered from insurance). Management said no orders were lost and the plant was back within 7–10 days. Promoter holding has edged up from 52.11% to 52.23% over the last two quarters, during the margin step-up.
Management's revenue roadmap
| Milestone | Revenue | Implied growth from FY26 (₹710 Cr) |
|---|---|---|
| FY27 guidance | ₹880 Cr | +24% (1 year) |
| FY28 (old FY30 target, pulled forward) | ₹1,000 Cr | +18.7% a year (2 years) |
| FY30 (revised target) | ₹1,365 Cr | +17.8% a year (4 years) |
Q1 FY27 revenue of ₹270 Cr was already about 31% of the full-year FY27 guidance, so the guide may prove conservative.
FY28 scenario arithmetic
Net profit is taken as about 65% of operating profit (FY26: 62%, Q1 FY27: 68%), on about 3.24 Cr shares. Each scenario multiplies FY28 EPS by a P/E multiple.
| Weak | Middle | Strong | Strong + re-rating | |
|---|---|---|---|---|
| FY28 revenue | ₹900 Cr | ₹1,000 Cr | ₹1,100 Cr | ₹1,100 Cr |
| Operating margin | 10% | 15% | 20% | 20% |
| Net profit | ₹59 Cr | ₹98 Cr | ₹143 Cr | ₹143 Cr |
| EPS | ₹18.0 | ₹30.0 | ₹44.1 | ₹44.1 |
| P/E applied | 10x | 14.5x (10-yr median) | 25x | 45x |
| Implied value | ₹180 | ₹436 | ₹1,102 | ₹1,983 |
| vs ₹413 | −56% | +6% | +167% | +380% |
This grid is arithmetic on stated assumptions, not a price target or forecast. The middle case uses only management's own FY28 target and the stock's own historical multiple. Margin and multiple tend to move together: a margin miss would probably also compress the multiple.
- Weak: revenue falls short of guidance and margin drops to management's stated 10–12% floor, valued at a compressed 10x.
- Middle: management's ₹1,000 Cr milestone at 15% margin, between the 3-year average (11.1%) and FY26 (16.5%).
- Strong: ₹1,100 Cr at 20% margin, a new full-year high but below the 24.8% peak quarter, valued like cheaper power-infra peers (Genus Power, KEC).
- Strong + re-rating: the same earnings at 45x, about three times Modison's own median and still about half of GE Vernova T&D India's multiple.
How the market has re-rated similar stories
| Company | Story | P/E (TTM) | What happened |
|---|---|---|---|
| GE Vernova T&D India | Grid and power equipment; same data-centre power theme | 82x | Operating margin went from 7–12% (FY23–24) to 25–29%; stock re-rated in stages over about two years |
| GE Vernova Inc. (US) | Grid and power equipment spin-off | 26x (42x forward) | +170% in one 12-month period |
| Micron (US) | HBM memory for AI servers | ~12x forward | Stock tripled in 2025, but EPS grew faster, so the multiple stayed low |
GE Vernova T&D India shows that Indian markets will pay high multiples for sustained margin expansion in this theme. It took about two years of staged improvement, and that company is roughly nine times Modison's revenue with far deeper analyst coverage. Modison is four quarters in.
Power-infrastructure peers
| Company | Role | P/E (TTM) | ROE |
|---|---|---|---|
| Modison | Electrical contacts (LV/MV/HV) | ~12.5x | 32.0% |
| Genus Power Infrastructures | Smart meters, power EPC | ~16.6x | 29.9% |
| KEC International | Transmission and grid EPC | ~18.9x | 11.4% |
| Larsen & Toubro | Diversified EPC | ~35.0x | – |
| Voltamp Transformers | Distribution transformers | ~35.2x | 17.4% |
| Transformers & Rectifiers | Power transformers | ~35.2x | 19.1% |
| Anant Raj | Data-centre operator | ~37.7x | 11.2% |
| Cummins India | Backup gensets | ~60.0x | – |
| Apar Industries | Conductors, cables | ~61.8x | 20.3% |
| ABB India | Switchgear, automation | ~94.3x | – |
| Voltas | Data-centre cooling | ~108.7x | – |
| Amber Enterprises | Cooling, electronics manufacturing | ~145.9x | – |
| Hitachi Energy India | Grid and transformer equipment | ~154.3x | – |
Modison doesn't sell to data centres directly, but more data-centre power means more switchgear, and more switchgear means more contacts. The well-known names already trade at 60–150x. Genus Power and KEC are the closest lower-multiple comparisons, both with longer, steadier records.
Risks and what to check
- Margin in the next two quarters: against Q1 FY27's 18.5% and management's 10–12% floor. This is the single most important number.
- Revenue against the ₹880 Cr FY27 guidance.
- Silver and tungsten prices: foreign exchange is hedged continuously, but metals only partly (Q1 FY27 booked a small loss on silver hedges).
- Related party: the terms of the Modison Copper Pvt Ltd arrangement (pricing, tenure) in AGM resolutions.
- Accounting: how interest capitalisation is treated, in the FY26 annual report notes.
- Basis: standalone versus consolidated figures when comparing management commentary with reported numbers.
Data. Based on publicly available information: company results filings, the FY26 annual report, AGM commentary, stock-exchange disclosures and market data, as of 28 Aug 2026. Scenario figures are calculations on the stated assumptions.
