Merritronix Ltd IPO: Business Overview, IPORupee Insight and IPORupee Education

Company Overview

Merritronix Ltd is an electronics manufacturing company operating in the ESDM industry. It mainly works as a B2B electronics manufacturing partner for customers in specialised and high-reliability segments.

The company was incorporated on October 14, 1988 as Merritronix Private Limited. It was later converted into a public limited company and renamed Merritronix Ltd on February 7, 2025. Its registered office and manufacturing facility are located at C-22, Electronic Complex, Kushaiguda, Hyderabad, Telangana, India, 500062.

What Does Merritronix Do?

Merritronix provides electronics manufacturing and engineering services to business customers. It manufactures and assembles electronic products and electronic boards for specialised applications where accuracy, quality and reliability are important.

Turnkey Manufacturing / Build-to-Print

This is the largest revenue segment of Merritronix. Turnkey manufacturing means the company handles procurement, manufacturing, assembly, testing and delivery. Build-to-print means the customer gives the design, drawing or technical specification and Merritronix manufactures the product as per those specifications.

Obsolescence Engineering Management

Obsolescence engineering management means helping customers when electronic components become discontinued, unavailable or difficult to source. This is important in aerospace, defence, telecom and industrial electronics because the systems may remain in use for many years while electronic components may become obsolete earlier.

Trading Sales and Job Work

The company also earns smaller revenue from trading sales and job work. Trading sales contribution reduced sharply in FY 2026, while job work remained a small part of total revenue.

Business Model

Industry and Sector Exposure

Merritronix is highly focused on aerospace and defence electronics. This gives the company exposure to high-reliability electronics, but it also creates sector concentration risk.

Government and Non-Government Revenue Mix

Manufacturing Facility, Capacity and Quality

The company operates from its registered office and manufacturing facility at Kushaiguda, Hyderabad. The facility is leased from M/s Amar Electronics, a related party, with lease tenure until March 31, 2030.

Capacity Utilisation

The SMD utilisation reduced in FY 2026 because a new Panasonic NPM D3A machine was commissioned in January 2026, increasing installed capacity but not contributing production for the full period. TMD and Box Build sections operated at very high utilisation.

Quality and Certifications

The company works in high-reliability electronics where quality, documentation and testing are important. The RHP mentions EN 9100:2018 certification for manufacture of PCBAs for aerospace and defence applications. This certification is equivalent to AS 9100D and JISQ 9100:2016, including ISO 9001:2015 quality management principles.

The company uses inspection and testing systems such as automated optical inspection, X-ray inspection and functional testing. These processes are important because aerospace and defence electronics cannot afford frequent defects.

Financial Highlights

Revenue, EBITDA and PAT have increased strongly from FY 2024 to FY 2026. Margins have also improved during the period.

Order Book

As per the RHP, the company had an order book of Rs. 9,664.91 lakhs as on April 30, 2026. Order book gives revenue visibility, but it is not guaranteed revenue until execution, delivery and customer acceptance happen.

Long-Term Contracts and Purchase Orders

A large portion of revenue is linked to long-term contracts. However, customer arrangements generally do not include minimum order commitments, take-or-pay clauses or binding volume guarantees. So actual execution still depends on customer demand and project progress.

Working Capital, Cash Flow and Borrowings

Working Capital Position

Merritronix has significant working capital requirements because project-based electronics manufacturing requires raw material, work-in-progress, inventory and receivables before cash is received from customers.

Operating Cash Flow

Borrowings

Customer, Supplier and Geographic Concentration

Customer Concentration

Customer concentration is one of the most important risk areas in this IPO.

Supplier Concentration

Top 10 suppliers contributed more than 87% of purchases in each of the last three financial years. In electronics manufacturing, component availability is critical because even one missing component can delay final product delivery.

Raw Material Sourcing

Telangana Concentration

The majority of product sales and services are concentrated in Telangana. Revenue from Telangana was 98.19% of revenue from operations in FY 2026, 95.63% in FY 2025 and 88.85% in FY 2024. This creates regional concentration risk.

Objects of the IPO

Proposed Use of Net Proceeds

• Funding capital expenditure for plant and machinery / manufacturing expansion-related requirements.
• Funding working capital requirements of the company.
• Repayment or prepayment of certain secured borrowings.
• General corporate purposes.

Key Business Strengths

Key Risks

IPORupee Insight

Merritronix Ltd is a specialised electronics manufacturing SME IPO with strong exposure to aerospace and defence electronics.

The positive side is clear. The company has a long operating history, strong revenue growth, margin improvement and high exposure to high-reliability electronics. Revenue from operations increased from Rs. 8,569.91 lakhs in FY 2024 to Rs. 15,589.56 lakhs in FY 2026. PAT increased from Rs. 305.03 lakhs to Rs. 1,610.30 lakhs during the same period. EBITDA margin also improved from 7.82% to 17.42%.

The company’s business focus is also interesting. It is not a general electronics trader. It works in B2B ESDM services, turnkey manufacturing, build-to-print, PCBA and obsolescence engineering management. These areas can be valuable because aerospace and defence electronics require quality, reliability, documentation and customer trust.

The order book of Rs. 9,664.91 lakhs gives some visibility. The company also has a large part of revenue supported by long-term contracts, with 73.92% of FY 2026 revenue linked to long-term contracts. That gives some comfort compared with purely one-time purchase-order revenue.

What Retail Investors Should Check

• IPO valuation compared with EPS, PAT and cash flow.
• Whether FY 2026 growth is sustainable.
• Top 1 customer dependency.
• Top 10 customer concentration.
• Aerospace and defence revenue concentration.
• Order book conversion into revenue.
• Operating cash flow trend.
• Inventory and receivable levels.
• Working capital requirement after IPO.
• Supplier concentration.
• Component availability risk.
• Machinery purchase and capex execution.
• Debt reduction after IPO proceeds utilisation.
• Related-party lease arrangement.
• Promoter similar business disclosure.
• Companies Act compliance history.
• SME listing liquidity risk.

Overall: Merritronix is a growing ESDM and aerospace-defence electronics SME IPO with strong revenue growth, margin improvement and a specialised business profile. However, investors should carefully study customer concentration, sector concentration, negative operating cash flow, working capital pressure, supplier concentration, machinery execution risk, related-party arrangements and SME listing risk before making any IPO decision.

IPORupee Education

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