Powerica IPO raises questions for long-term investors.

Powerica IPO raises questions for long-term investors. The generator set maker plans a 1,100 crore fundraise, valuing the company at a FY25 P/E of 28, declining to 18.6x on FY26 estimates. While revenue grew 5.3% and net profit surged 25.8% in recent years, concerning trends emerge. EBITDA margins contracted to 13% from 14%, lagging peers Cummins India and Kirloskar at 19-23%. Return on equity fell sharply to 17.5% from 26.5% year-over-year. Heavy supplier dependency on Cummins for over two-thirds of genset revenue poses concentration risk. The company's wind power expansion is promising but debt levels rose to 0.4x net debt-equity in H1 FY26. Investors should await post-listing clarity on financial trajectory and margin recovery before committing capital.