Zetwerk Manufacturing Businesses Limited (Neutral)

Highlights

Zetwerk Manufacturing Businesses Limited (ZMBL) incorporated in 2017, is a technology-led, asset-light manufacturing platform for industrial and consumer enterprises, which aggregates manufacturing capacity across a network of third-party suppliers and its own facilities into a universal factory, to serve custom and large-scale production requirement across the globe.

ZMBL’s operations span design, manufacturing, quality control, logistics, customs, documentation and compliance, all coordinated through its proprietary Zetwerk OS. It serves customers range across sizes, from innovative startups to mature companies, and across industries, including utilities, renewables, consumer electronics, AI infrastructure, aerospace, space & defence, oil & gas, and industrial automation.

ZMBL has served nearly 1,802 customers (1,613 customers within India and 189 outside India) in FY26 through a diverse network of 6,979 third-party suppliers in 26 countries and its own 26 manufacturing facilities across four countries.

Out of the total proceeds of Rs. 50,133 mn, Rs. 21,000 mn would go towards repayment /prepayment of borrowings availed by company and its subsidiaries and remaining Rs. 7,300 mn would go towards funding inorganic growth and general corporate purposes. Additionally Rs. 21,833 mn would towards the promoter and investor selling shareholders of the company.

Key Highlights                        

• India’s manufacturing procurement of durable goods is valued at Rs. 17.37 trillion in FY26 and is projected to reach Rs. 37.54-42.57 trillion by FY31. While, the USA market is valued at Rs.53.12 trillion in FY26, is projected at Rs. 57.92-66.97 trillion by FY31. Within this market, the TAM for manufacturing platforms is estimated at Rs. 10.26-12.57 trillion in India and Rs. 2.07-6.26 trillion in the USA as of FY26.

• Manufacturing capacity is often globally fragmented across facilities with inconsistent quality and service levels, creating scaling inefficiencies and supply-chain bottlenecks. ZMBL is well positioned to address these challenges through an asset-light platform that aggregates spare capacity from multiple third-party suppliers, enabling scalable, cost-efficient manufacturing with optimised speed and quality.
• ZMBL’s proprietary in-house Zetwerk OS is central to its operations, managing multi-supplier, multi-geography manufacturing programmes through a built-to-print engine that converts complex engineering drawings into end-to-end production plans. The platform integrates enquiry and order management, supplier selection, production planning, quality control, logistics, and customer-supplier portals.
• ZMBL leveraged its manufacturing scale and throughput to help suppliers procure raw materials at competitive prices and negotiate favourable terms. Over time, this capability evolved into separate business, branded Terra91 – a platform enabling suppliers and customers of its manufacturing business to source industrial commodities and raw materials.
• ZMBL operates its manufacturing business across three verticals – Energy Products, Precision Products and Capital Goods, offering customers with both recurring components for OPEX and one-time capital goods for CAPEX projects. Precision Products comprises entirely recurring components, Energy Products includes both CAPEX products and recurring components, while Capital Goods focuses exclusively on CAPEX products.
• ZMBL’s value proposition includes cost-effective manufacturing, faster time to market, quality assurance, scalable supply, end-to-end manufacturing services and a transparent manufacturing lifecycle for customers. For suppliers, it offers revenue predictability, improved capacity utilisation, engineering and design support, and efficient, cost-effective raw material sourcing.
• ZMBL’s key growth strategies include (i) To increase wallet share with customers, (ii) gain customers in rapidly expanding industries, (iii) diversify into new industries ahead of demand inflections, (iv) continue to expand geographically, (v) increase design-led manufacturing and original design manufacturing, (vi) expand and deepen its supplier network, and (vii) selectively expand own facilities through greenfield setups and acquisition of bolt-on capabilities.
• The sales of the company have grown by 13.45 pct CAGR over FY24-26 and EBITDA has grown by 292.73 pct CAGR, while the company continued to report losses over the same period. In FY26 the company reported sales of Rs. 159,133 mn rose by 40.43 pct YoY. EBITDA of the company rose by 20.45 pct YoY to Rs. 3,345 mn. In FY26 the company posted loss of Rs. 9,644 mn, which expanded by 348.42 pct YoY.

Key Risk

• Products sourced from third-party suppliers account for a significant portion of ZMBL’s combined Manufacturing and Ecosystem segment revenue in FY26, exposing the business to supplier capacity, quality, pricing and supply disruption risks.
• ZMBL’s performance depends on the performance of the industries its customer operates in, any downturn in any of these industries could adversely affect its business.
• ZMBL’s contingent liabilities account for 28.91 pct of total net worth, any event of liquidation would adversely affect its financial position.
• The Company may be exposed to evolving risks associated with their use of artificial intelligence and machine learning in critical areas of their operations.

Financial Performance

Source: – RHP.

Valuation

Zetwerk Manufacturing Business limited is a technology-led, asset-light manufacturing platform, that deliver diversified industrial products across sectors including utilities, renewables, consumer electronics, AI infrastructure, space & defence, oil & gas, and industrial automation and aerospace both in India and globally. Its flexible, tech-enabled model orchestrates global supply chains to accelerate time-to-market and ensure quality at any scale. From design to logistics, Zetwerk offer a one-stop shop for customers looking to purchase multiple products across categories. At the upper end of the price band of Rs. 151, the issue is priced at an Mcap/TTM sales of 1.5x based on its post issue capital. The issue appears to be fully priced.

Disclaimer: The views shared in blogs are based on personal opinions and do not reflect the company’s views. Investment involves risk, and it is advisable to consult a financial advisor before making any investment through the app. The decision to invest is solely that of the investor, and the company or its communication cannot be held responsible for it.