Zetwerk’s IPO Test: Can Revenue Growth Outrun Its Cash Flow Pressure?
Bengaluru-based Zetwerk is entering the public markets with a business that looks quite different from the business for which it…
Zetwerk, a Bengaluru-based contract manufacturer, is set to go public amid debate over whether its revenue growth can keep pace with mounting cash flow pressures. The company has transitioned from a marketplace connecting customers with third-party manufacturers to a hybrid model that includes its own manufacturing facilities.
Zetwerk's revenue from ongoing operations surged 40.4% year-over-year to ₹15,913 Cr in FY26, while its adjusted EBITDA more than quadrupled from ₹97 Cr in FY24 to ₹421.3 Cr in FY26. However, the adjusted EBITDA margin declined to 2.65% in FY26, down from 2.85% in FY25.
Despite this, Zetwerk reported a consolidated loss of ₹1,606 Cr in FY26, up from ₹370.7 Cr loss in the previous fiscal year. The loss was primarily driven by an exceptional loss from continuing operations and an impairment from its discontinued civil infrastructure works.
While Zetwerk's order book expanded to ₹12,370 Cr in FY26, representing a 43% increase from the previous year, its operating cash flow remained negative. The company's manufacturing order book grew to ₹12,370 Cr, up from ₹8,629 Cr and ₹6,170 Cr in FY25 and FY24, respectively.
The company's manufacturing business, accounting for 58.9% of its top line, grew by 50% year-over-year, reaching ₹9,374.7 Cr. However, its manufacturing EBITDA margin stood at 6%, compared to 5.68% in FY25.
Zetwerk's strategy involves moving into more complex manufacturing work, including in-house engineering and design for specific components. This shift in focus and the expanding order book provide some visibility into future growth, but converting these orders into profitable growth remains a significant challenge.
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