RMC Switchgears Limited (NSE: RMC) has secured fresh orders worth ₹344.10 crore, with almost the entire amount coming from 12 Paschim Gujarat Vij Company Limited packages to convert overhead 11 kV and low-tension distribution networks into underground cable systems. The ₹333.80 crore PGVCL mandate spans Bhavnagar, Jamnagar, Anjar and Junagadh circles and is scheduled for execution over 12 to 18 months after a 45-day commencement period.
The new orders are unusually large against RMC Switchgears’ current financial base. The company generated FY26 consolidated revenue of ₹401.59 crore, meaning ₹344.10 crore of fresh awards is equivalent to about 86% of an entire year’s revenue. RMC said its unexecuted order book stood at approximately ₹1,188 crore after the awards, almost three times FY26 revenue.
That backlog provides considerable visibility, but it arrives alongside a weak opening quarter. Consolidated Q1 FY27 revenue fell approximately 56% year on year to ₹37.24 crore and profit after tax declined about 49% to ₹2.08 crore. The contrast makes execution of the Gujarat packages more important than the initial market excitement surrounding the order announcements.
How large is RMC Switchgears’ ₹344 crore order wave against FY26 revenue?
The ₹344.10 crore of fresh orders is approximately 85.7% of RMC’s FY26 consolidated revenue. Against Q1 FY27 revenue of only ₹37.24 crore, the new awards are more than nine times the latest quarterly sales figure, although the comparison is deliberately illustrative because the contracts will be delivered over multiple quarters rather than recognised immediately.
The approximately ₹1,188 crore unexecuted order book is even more significant. It is almost three times FY26 revenue and provides a large pool of work from which RMC can rebuild quarterly sales if project mobilisation proceeds on schedule. The key variable is backlog conversion, particularly after Q1 showed how sharply reported revenue can fall when EPC execution is delayed or project milestones shift.
Order-book scale does not guarantee earnings quality. RMC’s FY26 revenue grew 26.4%, but full-year EBITDA declined 10% to ₹47.10 crore and profit after tax fell 27.3% to ₹22.45 crore as margins weakened. The company consequently enters the latest growth cycle with evidence that higher revenue can coexist with lower profitability if project mix and cost inflation move unfavourably.
This gives the PGVCL contracts an important dual test: RMC must execute enough volume to restore top-line momentum while demonstrating that the new projects carry margins capable of reversing the profitability pressure seen in FY26.
What will RMC Switchgears build across PGVCL’s four Gujarat circles?
The largest component consists of nine packages in the Bhavnagar Circle worth ₹251.21 crore. Jamnagar accounts for another ₹35.98 crore, Anjar ₹28.26 crore and Junagadh ₹18.36 crore, taking the PGVCL total to ₹333.80 crore across 12 Letters of Acceptance. Bhavnagar alone therefore represents about three-quarters of the PGVCL contract value.
The work involves replacing existing overhead 11 kV high-tension and low-tension lines, including consumer service connections, with underground cable infrastructure built around a Ring Main System. RMC is responsible for site surveys, design, engineering, procurement, material supply, transportation, installation, testing, commissioning, documentation and associated GIS or Geo Urja mapping and asset tagging.
This makes the award more complex than a switchgear supply contract. Undergrounding requires civil excavation, cable installation, distribution equipment, network reconfiguration and digital asset mapping while maintaining electricity supply to customers during implementation.
The Ring Main System also provides greater network flexibility because electricity can potentially be rerouted around a faulted section rather than leaving an entire radial feeder without supply. For utilities, undergrounding can reduce exposure to weather and physical damage while improving urban streetscapes, although underground networks generally cost considerably more to install and can be expensive to repair when faults are difficult to locate.
Why is Gujarat distribution undergrounding becoming a larger EPC opportunity for RMC?
Indian distribution utilities are investing in network modernisation to reduce outages, replace vulnerable overhead systems and improve digital visibility of assets. Dense urban and industrial areas create particularly strong cases for underground systems because conventional poles and overhead cables face space constraints, weather exposure and increasing safety requirements.
RMC’s new PGVCL mandate combines civil and electrical work with GIS mapping and asset tagging. That digital layer is important because utilities increasingly need accurate network records to manage maintenance, load planning and fault response rather than operating fragmented physical assets with incomplete location data.
The contract can also broaden RMC beyond its traditional manufacturing identity. The company operates across switchgear, electrical enclosures, smart-metering solutions and EPC, but a ₹333.80 crore turnkey utility contract pushes project execution deeper into the centre of its revenue model.
RMC simultaneously disclosed smaller orders worth ₹5.02 crore from Genus Power Infrastructures Limited, ₹2.84 crore from Jaipur Vidyut Vitran Nigam Limited and ₹2.44 crore from Southern Power Distribution Company of Telangana Limited. Those awards diversify customers, but PGVCL represents about 97% of the ₹344.10 crore fresh-order total and is therefore overwhelmingly the key commercial development.
Can RMC’s ₹1,188 crore backlog overcome the sharp Q1 FY27 revenue slowdown?
Q1 FY27 consolidated revenue fell to ₹37.24 crore from ₹84.53 crore a year earlier, while PAT dropped to ₹2.08 crore from ₹4.08 crore. EBITDA declined more moderately to ₹7.75 crore from ₹8.88 crore, which pushed the reported EBITDA margin substantially higher because revenue fell much faster than operating profit.
The margin improvement is encouraging on its face, but a 56% revenue contraction is too large to ignore. EPC businesses can experience quarterly volatility when customer clearances, site availability and billing milestones shift, and a large backlog is valuable partly because it gives management enough projects to smooth those variations over time.
The PGVCL awards are scheduled over 12 to 18 months, meaning meaningful execution could begin supporting revenue relatively quickly if mobilisation proceeds after the contractual commencement period. The company’s challenge is to convert backlog without recreating the margin dilution that characterised FY26.
Working capital will also become important. Management disclosed at its FY26 analyst discussions that the business remained heavily weighted toward government customers and had substantial trade receivables, illustrating why strong accounting revenue can still place pressure on cash if customer collections lag project expenditure.
Why is RMC Switchgears stock still near its 52-week low despite the order surge?
RMC Switchgears closed at ₹258.25 on August 21, up 3.03% for the session, but only modestly above its 52-week low of ₹245 and dramatically below the upper end of its 52-week trading range. The stock was around ₹336.80 on August 5 when the fresh-order announcement was released, meaning it had fallen by more than 23% from that level by August 21 despite the new backlog.
The weakness suggests investors are focusing on more than order announcements. Q1’s revenue decline, historical margin pressure, execution risk and the working-capital demands associated with a much larger EPC pipeline all influence the value of the ₹1,188 crore backlog.
That creates a potentially important rerating test. If RMC converts the PGVCL packages into revenue while preserving the much stronger Q1 EBITDA margin and improving collections, the current backlog could materially change the company’s earnings scale. If project execution remains volatile, a three-times-revenue order book may continue to look more impressive on paper than in quarterly cash generation.
The Gujarat undergrounding contracts therefore give RMC Switchgears a substantial opportunity to demonstrate that its business has moved beyond simply accumulating orders. With fresh awards equal to roughly 86% of FY26 revenue, the next meaningful story will be how much of that value turns into profitable, collected revenue.
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