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Pace Digitek · PACEDIGITK · NSE

Pace Digitek builds telecom towers, fibre and power systems and is pivoting into grid-scale battery storage, making money by executing infrastructure projects and increasingly by owning and operating energy assets across India, Myanmar and Africa.

$1.93
Share price 19 Jun 2026
$417M
Market cap
$293M
Revenue FY2026 ~5x since FY2023
17.2%
EBITDA margin FY2026
Listed on the NSE and BSE on 6 October 2025 at a $2.42 issue price; it touched $2.53 within three weeks, sank to $1.55 by March 2026 as cash-flow doubts took hold, and trades near $1.93 — about 17% below where its eight-month public life began.
2 · The central tension

Three years of reported profit, and not one dollar of operating cash

  • The divergence. Across FY2024–FY2026 Pace booked $88M of cumulative net profit yet burned $98M of operating cash — and the gap is widening, not closing: FY2026 earned $34M of profit against negative $102M of operating cash flow.
  • Where the cash sits. A $271M trade-receivable book — roughly 337 days of sales — plus a deliberate $60M lithium-cell inventory build. Management calls it timing: milestone billing to government customers it expects to start easing by September 2026.
  • Why it may be structural. The fastest-growing engine, a Build-Own-Operate energy model, books revenue and a $62M finance-lease receivable up front but collects the cash monthly over a decade — profit recognised today against cash due for years.
The whole case reduces to one question: does the reported profit become cash, or is it an accounting construct that re-rates toward book?
3 · The money picture

A real, fast-scaling business — recapitalised, but still burning cash to grow

$293M
Revenue FY2026 +8% YoY, ~5x since FY2023
-$102M
Operating cash flow vs $34M net profit
$1.26B
Order book 4.3x revenue, 78% energy
14.3%
ROCE FY2026 down from 37.9%

Revenue quintupled from $61M in FY2023 on a wave of telecom EPC work, then flattened in a $285–293M band as the mix tilted toward lower-margin energy. The October 2025 IPO doubled equity to $250M and lifted the credit rating from BBB- to A-, halving finance cost to $7M — yet borrowings climbed back to $107M and return on capital halved as cash flowed into owned energy assets earning a 12–13% IRR.

4 · Who controls the accounts

A promoter-controlled register where shareholders are starting to push back

  • Earnings-quality flag. An independent forensic review scores the name HIGH risk (68/100). The auditor noted for three straight years that quarterly returns filed with lenders did not agree with the books, and receivables were reclassified current-to-non-current in the first post-listing accounts.
  • Concentrated control. Promoters hold ~69.5%; the founder is combined Chairman and Managing Director and sits on the audit committee that approves related-party deals. $16M of FY2025 EPC work was routed to promoter-linked Lanarsy Infra.
  • The rebuff. In an April–May 2026 postal ballot, shareholders rejected four of six related-party-transaction resolutions — a rare check on a register this concentrated. The Energy Business Head resigned 30 May 2026, and foreign-institutional holding fell from 2.31% to 0.56% in a single quarter.
5 · The other side

The bull anchor: a contracted backlog into India's grid-storage build-out

  • Contracted, not hoped for. A $1.26B executable order book — 4.3x FY2026 revenue and 78% energy — gives multi-year visibility. L&T placed a 250 MWh battery order in January 2026 after a formal evaluation, an external validation of the franchise.
  • First-mover capacity. Pace runs one of India's largest grid-scale battery lines and is doubling capacity toward 10 GWh, into a market the government projects will need ~236 GWh of storage by 2030 against just ~25 GWh awarded so far.
  • The promised pivot. Management has pledged no further capital-heavy Build-Own-Operate projects without outside capital and a shift toward cash-generative product sales in FY2027–28, guiding to $444–466M of revenue by FY2028.
6 · What to watch

A cheap multiple — on earnings that have never been cash

  • What supports it. The order book is real and externally validated, the IPO removed near-term solvency risk (net debt/equity 0.09x), and at ~12x trailing earnings the stock already sits 17% below its issue price — much of the cash fear may already be in the price.
  • What cuts against it. Zero cumulative cash conversion across the company's entire listed life, capital deployed at a 12–13% IRR that barely clears its cost, and a governance structure built to suppress rather than surface the risk.
  • The deciding evidence. Management has staked its credibility on working capital easing by September 2026 and operating cash turning positive by FY2028; the H1 FY2027 result around November 2026 is the first print that confirms or refutes it.

Watchlist to re-rate: The sign of H1 FY2027 operating cash flow (around November 2026); whether the trade-receivable book and like-for-like days-sales-outstanding fall toward ~150 days; and whether the promised FY2027–28 pivot to asset-light product battery sales actually arrives.