Tempsens Instruments (India) Limited is going for an IPO. They hold a ~11% share of India’s temperature sensor market, and is the country’s only domestic manufacturer of non-contact sensors.
IPO Summary
Introduction
India’s non-contact temperature sensor market has one problem: almost none of it is made in India.
The domestic temperature sensor market is worth ~₹1,880 Cr in FY26, and the country depends almost entirely on imports for it. But, one company builds pyrometers and thermal imagers domestically.
Tempsens Instruments (India) Limited designs and manufactures temperature sensing solutions, electrical heating solutions, and specialised cables for industries such as power, steel, oil and gas, defence, and aerospace.
It is the largest manufacturer of contact and non-contact temperature sensors in India by revenue.
And they’re going public, with an IPO consisting of a Fresh Issue of ~₹95 Cr and an Offer for Sale of ~₹555 Cr.
Of the fresh issue proceeds, some will go towards capacity expansion in electrical heating and specialised cables, rest towards repayment of borrowings.
The Business Model
Tempsens operates through three product verticals:
- temperature sensing solutions,
- electrical heating solutions, and
- specialised cables.
All three verticals sell into the same set of industries, including metal, petrochemical, power, oil and gas, defence, and glass.
The company operates on a make-to-order basis.
A customer specifies technical requirements, Tempsens converts those into engineering drawings, and production begins only once the design is approved.
Tempsens generates revenue from two streams: Projects/OEM business, which involves large orders for new installations or plant upgrades, and MRO (maintenance, repair and operations) business, involving smaller, recurring replacement orders once existing equipment reaches the end of its service life.
They run 15 manufacturing units globally, ten in Udaipur and five overseas across UAE, South Korea, Indonesia, Germany, and Poland.
Tempsens’ top 10 customers contributed ~19% of revenue in FY26 and its top 20 customers have stayed with it for an average of 10 years.
Unit Economics
- Material costs, the largest line, fell from ₹62 per ₹100 of revenue in FY24 to ₹56 in FY26. This two-year decline is a big driver of margin expansion.
- Employee costs rose steadily, from ₹11 per ₹100 of revenue in FY24 to ₹14 in FY26, reflecting the headcount added through the Marathon Heater amalgamation and a few acquisitions.
- EBITDA expanded from ₹22 per ₹100 of revenue in FY24 to ₹25 in FY26, with the fall in material costs doing most of the work.
Operating Metrics
- Revenue Mix by Vertical: Electrical Heating Solutions’ share of revenue rose more than fivefold, from 4% in FY24 to 21% in FY26, largely through the Marathon Heater amalgamation completed in FY25. Temperature Sensing Solutions’ share fell correspondingly, though it’s still the largest vertical in absolute terms.
- R&D Expenditure grew from ₹0.31 Cr in FY24 to ₹1.16 Cr in FY26, though it still remains just under 0.3% of revenue. Tempsens Instruments has produced 12 granted patents till date.
- Export revenue grew from ₹59 Cr in FY24 to ₹126 Cr in FY26, a CAGR of ~46%, more than double the growth rate of domestic revenue over the same period.
The Financial Stuff
- Revenue from Operations grew from ₹275 Cr in FY24 to ₹445 Cr in FY26, a CAGR of 27%.
- Finance Costs more than tripled, from ₹1.59 Cr to ₹5.22 Cr, tracking the rise in short-term borrowings used to fund working capital.
- Profit After Tax grew from ₹40.92 Cr in FY24 to ₹71.07 Cr in FY26, a CAGR of 31.79%. On an adjusted basis, which strips out the amortisation impact of the Marathon amalgamation and other acquisitions, PAT was ₹75 Cr in FY26.
Key Risks
- Revenue concentration: The Projects/OEM segment contributed ~68% of revenue in FY26, and the smaller MRO business isn’t big enough to cushion a slowdown in project awards.
- Import dependency. Imported materials were ~20% of purchases in FY26, up from 14% in FY24, exposing margins to currency and duty swings on orders priced before procurement.
Conclusion
Tempsens Instruments sells engineered products as India’s only domestic maker of non-contact temperature sensors, and its make-to-order model across three product verticals, gives it pricing power that shows up in a large EBITDA Margin low 0.2x leverage. But, the Projects/OEM business supplies two-thirds of revenue and is lumpy by nature.
