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The fourth quarter of FY25 revealed clear sectoral divergences in corporate performance, with defense-tech, electronics, and auto components delivering robust results, while certain verticals like railways and pharma reported softer trends. In its 20 May 2025 research compilation, Motilal Oswal Financial Services analyzed earnings and growth outlooks for several sectors and key companies.

Defense Sector: Order Momentum and Strategic Expansion

Zen Technologies and Data Patterns reported strong operational results supported by expanding order books and strategic acquisitions.

Zen Technologies posted a revenue of Rs 2.93 billion in Q4FY25, up 116% year-on-year, while PAT surged 177% to Rs 849 million. The company received fresh orders worth Rs 1.5 billion during the quarter, taking its standalone order book to Rs 6.9 billion.

Motilal Oswal revised its earnings estimates upward by 4% for FY26 and 7% for FY27, projecting a 34% CAGR in revenue and a 40% CAGR in PAT over FY25–27. EBITDA margins are expected to remain strong at 37%. The report noted that while FY26 may be a muted year due to execution timelines, the medium-term revenue guidance remains robust at Rs 60 billion cumulatively over FY26–28.

Data Patterns reported revenue of Rs 3.96 billion in Q4FY25, a 2.2x increase year-on-year. The growth was led by a 2.7x increase in development revenue and a 76% jump in production revenue. EBITDA rose 61% to Rs 1.5 billion. However, the company’s order book declined to Rs 7.3 billion due to deferment of some defense contracts, which are now expected to materialize in FY26.

The report projects a 25% CAGR in revenue, EBITDA, and PAT for Data Patterns over FY25–27, with strategic growth expected in airborne jamming and radar-based solutions.

Consumer Durables and Electronics: Multi-Segment Strength at Amber Enterprises

Amber Enterprises delivered strong performance in Q4FY25 with consolidated revenue of Rs 37.5 billion, up 34% year-on-year. EBITDA grew by 33% to Rs 1.58 billion. The RAC (Room Air Conditioner) segment grew 49% year-on-year, while the electronics segment grew 74%—outperforming the management’s own guidance.

The company is investing Rs 30 billion over five years under the Electronic Component Manufacturing Scheme (ECMS). Up to 65% of this capex will be supported by central and state government subsidies, significantly reducing net capital outflow.

Motilal Oswal expects the electronics segment to post a 35% CAGR in revenue and a 59% CAGR in EBITDA over FY25–27. The brokerage retained a BUY rating on the stock and adjusted its target price to Rs 7,600 from Rs 7,800, factoring in a higher tax rate and potential losses from its joint venture.

Auto Components: Margin Resilience at Happy Forgings

Happy Forgings maintained margin discipline in a mixed demand environment. The company reported Q4FY25 revenue of ?2.5 billion, up 2.5% year-on-year. EBITDA margin improved by 80 basis points to 29.1%. PAT for the quarter was ?678 million, in line with estimates.

For the full year, FY25 revenue stood at Rs14.1 billion, with PAT of Rs 2.7 billion, reflecting a 10% growth over the previous year. The company generated free cash flow of Rs119 million after investing Rs 2.8 billion in capex.

Motilal Oswal projects a 14% revenue CAGR and a 16% CAGR in both EBITDA and PAT over FY25–27. The company plans a capex of Rs 4 billion in FY26, including Rs 800 million targeted at passenger vehicle components.

Management guidance indicated healthy order wins from industrial and PV segments, amounting to Rs 6 billion in orders to be executed over the next 5–8 years.

Railways and Infrastructure: Delay in Offtake

Amber Enterprises' railways segment revenue remained flat at Rs 1.25 billion in Q4 due to delays in project offtake, including metro and Vande Bharat-related orders. Despite revenue stagnation, the segment’s margin improved by 610 basis points year-on-year to 24%.

The company is adding pantry doors, gangways, couplers, and brakes to its rail product portfolio, with an upcoming greenfield facility expected to become operational in FY26. However, the report notes that meaningful contribution from this segment may only emerge post-FY27.

Motilal Oswal expects a 28% CAGR in both revenue and EBITDA for Amber’s railway business over FY25–27, with margins reaching approximately 18.5% by FY27.

Healthcare: Supply Disruptions Impact Profitability

Eris Lifesciences reported a mixed set of numbers in Q4FY25. Revenue for the quarter stood at Rs 7.1 billion, growing 28% year-on-year. However, EBITDA margin remained under pressure due to product shortages, particularly in the insulin portfolio.

Motilal Oswal noted that revenue, EBITDA, and PAT for FY25 came in at Rs 28.9 billion, Rs 10.2 billion, and Rs 3.5 billion, respectively. The company lost nearly Rs 500 million in revenue during FY25 due to recombinant human insulin supply issues.

The report also cited the ongoing impact of regulatory bans on fixed-dose combinations (FDCs) and the gradual ramp-up at the Bhopal facility. Earnings estimates were reduced by 5% for FY26 and 3% for FY27. The brokerage maintained a Neutral rating on the stock with a target price of Rs 1,350.

Summary

The Q4FY25 results highlight broad-based strength in India’s defense-tech and manufacturing sectors, particularly in companies with government-linked demand or high-margin specialty manufacturing. Meanwhile, segments such as railways and pharmaceuticals are experiencing temporary execution challenges and supply-side constraints.
 

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