Pace Digitek Ltd.: overview

Pace Digitek Ltd.: Telecom Legacy to India’s Next Integrated Energy Infrastructure Platform

Pace Digitek closed FY26 with a sharp acceleration in execution, scale-up across energy infrastructure, and a decisive strategic transition from a telecom EPC player into an integrated telecom, energy infrastructure, and BESS platform. While telecom continues to provide a stable execution backbone, the real story now lies in the company’s aggressive manufacturing-led expansion, deepening participation in grid-scale storage, and increasing positioning within India’s renewable infrastructure buildout.

Revenue Growth Remained Strong Despite Business Mix Transition

The company reported a strong Q4 FY26 performance with consolidated turnover rising 60.5% YoY to ₹1,096 Cr, driven by continued execution momentum across telecom and energy infrastructure projects. Full-year FY26 revenue stood at ₹2,641 Cr, up 8.3% YoY despite an evolving business mix.

What stands out is the structural shift in the revenue profile. Telecom, which historically dominated the business, now contributes ~55% of annual revenue while energy infrastructure has already scaled to ~45%, highlighting Pace’s transition toward a more diversified infrastructure platform.

EBITDA Mix Shift Reflects Transition Toward Energy Infrastructure

Q4 EBITDA nearly doubled to ₹163 Cr versus ₹76 Cr last year, supported by operating leverage from higher quarterly execution. However, full-year EBITDA moderated to ₹455 Cr from ₹481 Cr due to the changing revenue composition from historically high-margin telecom execution toward a broader energy infrastructure mix.

Management indicated that medium-term profitability improvement will increasingly be driven through manufacturing scale-up, backward integration, localization initiatives, supply-chain optimization, and rising product-led revenues from BESS solutions rather than pure EPC execution.

Balance Sheet Strengthened Despite Aggressive Expansion

One of the biggest positives from FY26 was the sharp improvement in financing efficiency despite significant capacity expansion.

Finance costs reduced materially to ₹59 Cr from ₹115 Cr last year following debt optimization through IPO proceeds and a corporate credit rating upgrade from BBB- to A-. PAT rose to ₹307 Cr from ₹279 Cr while long-term PAT margins remained healthy at 11.4%.

The balance sheet now reflects the company’s ongoing manufacturing and energy asset expansion cycle:

Management also highlighted that working capital normalization is expected to improve materially from September 2026 onward as execution schedules become more evenly distributed across quarters rather than heavily weighted toward Q4.

₹11,337 Cr Order Book Gives Multi-Year Visibility

The executable order book now stands at ₹11,337 Cr, providing strong medium-term revenue visibility. Importantly, the order mix clearly reflects the company’s strategic pivot toward energy infrastructure.

Management continues to see strong secular opportunities across telecom infrastructure, RailTel projects, railway safety systems like Kavach, and digital coach layouts, with railway tender sizes typically ranging between ₹100–250 Cr.

BESS Manufacturing Is Becoming the Core Growth Engine

The most important strategic development remains the rapid scaling of Pace’s Battery Energy Storage System (BESS) platform.

The company operationalized 2.5 GWh of BESS manufacturing capacity during FY26 and is already operating at ~80% utilization, having shipped 178 containers during the year.

The next phase of expansion is now underway:

While Middle-East regional disruptions delayed machinery commissioning timelines by ~2 months due to ocean liner constraints, management confirmed that all major expansion schedules remain locked in.

More importantly, the company clearly articulated that over the next two years, strategic focus will aggressively shift toward manufacturing-driven, product-led revenues versus traditional EPC execution.

Backward Integration and Localization Could Drive Margin Expansion

Management emphasized that long-term margin expansion will increasingly come through backward integration and localization.

A major step in this direction is the company’s in-house container fabrication facility, expected to be fully operational by July 2026. The move is aimed at bypassing external logistics bottlenecks and elevated imported container freight costs, which management indicated can inflate overall costs by as much as 30%.

The internal fabrication facility is expected to reduce overall project cost metrics by 4%–6%, while future integration initiatives could eventually extend toward cell manufacturing as well.

BOO Model Creates Long-Term Infra Asset Opportunity

Pace is also positioning itself within the Build-Own-Operate (BOO) storage opportunity emerging across India’s renewable ecosystem.

For projects such as MSEDCL, management highlighted the following economics:

Importantly, management reiterated that future BOO exposure will remain balance-sheet disciplined, with long-duration projects increasingly routed through external investment structures to avoid excessive leverage accumulation.

International Expansion Pipeline Begins to Open Up

The company also announced a strategic partnership with NEC Exon to gain exclusive OEM BESS access across select African grids where renewable integration increasingly requires storage backup infrastructure.

Management expects 300–500 MWh of international orders to materialize from this pipeline during FY27, marking the beginning of Pace’s international BESS opportunity.

Policy Tailwinds Continue to Strengthen Storage Demand

Management highlighted that state-level renewable regulations across Maharashtra, Gujarat, and Rajasthan are increasingly mandating integrated BESS deployment alongside solar installations exceeding 50 MW.

This policy shift is expected to structurally accelerate storage demand across Commercial & Industrial (C&I) renewable projects, creating a long runway for BESS deployment over the coming years.

The company is also evaluating long-duration clean power opportunities for high-performance AI data centers requiring round-the-clock renewable energy availability.

FY27–FY28 Outlook: Manufacturing-Led Scale-Up Phase Begins

Management guided for:

PAT margins are expected to remain steady at 10%–11% despite the changing business mix, while operational improvements are expected through scale benefits, localization, integration, and rising product revenues.

Pace Digitek is increasingly transitioning from a project execution company into a vertically integrated energy infrastructure and storage platform. With a large executable order book, aggressive BESS capacity expansion, improving balance-sheet quality, and rising exposure to India’s renewable and storage ecosystem, the company is positioning itself at the intersection of telecom infrastructure, grid modernization, and next-generation clean energy storage demand.