Synopsis: Sealmatic India is positioning itself to benefit from India’s nuclear expansion while building a recurring revenue engine through its API seals business. With active participation in nuclear projects, defence, marine and power sectors, the company is targeting long-term growth. Meanwhile, high-margin aftermarket opportunities and improving profitability could support its next phase of expansion.
India’s push to expand its nuclear power capacity has emerged as one of the most closely watched industrial themes in recent years. As the country seeks to diversify its energy mix, reduce carbon emissions and strengthen energy security, investments in nuclear infrastructure are expected to gather momentum.
While large engineering and infrastructure companies often dominate discussions around this opportunity, a number of niche industrial players are positioning themselves to benefit from the long development cycle associated with nuclear projects.
One such company is Sealmatic India, a specialised manufacturer of mechanical sealing solutions. During its FY26 earnings call, the company repeatedly highlighted its involvement in nuclear projects and emphasized that India’s upcoming nuclear expansion could create a meaningful long-term opportunity.
At the same time, management continued to focus on oil and gas, defence, marine and thermal power projects, creating multiple growth drivers for the business. With a market cap of Rs 400 crore, the shares of Sealmatic India Ltd are trading at Rs 370 and are trading at a PE of 39 compared to their industry’s PE of 25. The shares have given a return of more than 70% since their listing in March 2023.
Building a Global Presence Amid Challenging Conditions
During FY26, there were uncertainties and economic pressures prevailing in several regions. Nonetheless, Sealmatic was able to register a growth in its sales turnover by about 2% during the same period and even managed to grow its market internationally.
As per the statements made by the management, the demand for its mechanical seals was steady not only in India, Europe, the Middle East, and North America but also in other parts of the world.
Moreover, Sealmatic expressed its plans to be among the top ten players in terms of sealing technology globally through investments in technical innovations and international market expansion. Sealmatic considers itself an engineering seal solution provider rather than just a product supplier to enhance the reliability of its customers.
Revenue Mix Highlights Growing International Reach
The income structure of the firm clearly indicates the significance of international markets. In FY26, 54.36% of the company’s total income was earned from exports, whereas the domestic market contributed the remaining 45.64%.
From the exports, 40.29 crore was earned through distributors and 14.5 crore via OEMs, out of which 8.3 crore pertained to API seal projects. Income generated through domestic OEMs stood at 36.25 crore, out of which 11.2 crore was attributed to the sale of API seals and 25.05 crore from other products.
On the other hand, end-user sales stood at 11.26 crores in the domestic market and close to 1 crore overseas. This shows that the growth strategy of the company has become increasingly balanced between domestic and international markets.
API Seals Emerging as a Strategic Growth Driver
The most important theme covered during the earnings call was the progress made by Sealmatic in API mechanical seals. The management revealed that Sealmatic has secured and executed 916 API seals to date in various projects in the UAE, Saudi Arabia, Oman, Kuwait, and Iraq.
Out of these, Sealmatic has executed 686 seals, whereas about 230 seals are still being executed by the company. The management highlighted that these seals are provided to customers at very subsidised prices, sometimes even lower than raw materials cost, to build up an installed base of the product with large clients.
In this regard, Sealmatic spent nearly Rs 8 crore in FY26. Although these projects exert margin pressure in the short term, they present extremely profitable economics in the long run since every seal installed would create a requirement for replacements over a period of more than 35 years.
The Aftermarket Opportunity Could Transform Profitability
Management continued to stress that the true value in API seals lay in the potential for the aftermarket. As soon as the seals were installed and commissioned, a market for their replacement would gradually develop.
Based on estimates by the firm, spare part and replacement seals had the potential to yield margins as high as 80%, which were far higher than the margins achieved during the installation process.
Despite the delay of approximately seven months due to geopolitical issues in the Middle East region, management was optimistic about the commissioning projects eventually materialising.
Based on indications by the company, approximately 20% of the seals installed were under commissioning, whereas most others would be placed into commission once the situation normalised. Assuming that these installations progressed as planned, aftermarket revenues could start adding from FY27 and become apparent from FY28 onwards.
Nuclear Expansion Opens a Long-Term Opportunity
While the talk about growth prospects in API Seals remains the focus in the near term, management at Sealmatic also identified the potential within nuclear power as part of their strategic outlook.
Management clarified that Sealmatic is actively bidding on work linked to the expanding project involving the Kudankulam nuclear facility in Tamil Nadu. Management revealed that Sealmatic is collaborating closely with the likes of BHEL and nuclear pump vendors across India and internationally.
However, it must be kept in mind that nuclear power projects take very long periods to materialise. Management explained that two to three years could elapse between the submission of an offer and getting an order, followed by an execution period of two years, before the installation period begins.
Despite such delays in generating revenue, it also has to do with the fact that nuclear power projects have long durations of investment. Crucially, Sealmatic emphasized its unique status as being the only company involved in mechanical seals with the ISO 19443 certification, which relates specifically to the nuclear industry.
Defence, Marine and Power Add Additional Growth Avenues
In addition to its focus on nuclear power, Sealmatic continues to seek opportunities in the defence, marine, and power sectors. In the year under review, Sealmatic received large contracts associated with the Kalvari-class submarine project as well as thermal power projects worth 660 MW and 800 MW capacity.
According to management, the defence and marine segments have close links since Sealmatic has specialised knowledge in the area of naval sealing products. The company continues to have business with the Indian Navy concerning submarine projects as well as the indigenisation of critical seals that are imported at present.
On the other hand, Sealmatic continues to be active with thermal and nuclear power projects via firms like Nuclear Power Corporation of India Limited and other engineering consultants.
Margin Recovery Could Accompany Revenue Growth
The FY26 performance was marked by a number of strategic decisions made in an effort to fuel future success. Profitability, however, suffered as the EBITDA margin fell to about 17.36% compared with 24% in the previous fiscal year.
According to management, this fall was caused, among other things, by participation in 14 international fairs, costing about Rs 5 crore each, as well as by the Rs 8 crore investment into API seal projects with subsidies.
Nevertheless, management expects both to decrease in FY27. In particular, management is planning to participate in only five fairs this year, which would save between Rs 3.5 crore and Rs 4 crore. Moreover, it is expected that subsidies on API projects will start decreasing due to increasing installed capacity. Consequently, Sealmatic believes that the margin can return to approximately 23% – 24% levels in FY27. Guidance for FY27 revenues is projected to be about 15%.
Can Nuclear Become the Next Major Growth Engine?
The first obvious driver of growth for Sealmatic would continue to be the increasing demand from the API seal business and the repeat sales opportunity provided by its installed projects in the Middle East and India.
In the long term, however, there seems to be a clear link between the company and certain industries like nuclear power generation, defence, and critical infrastructure. The involvement in nuclear power projects, presence in the right networks, certifications, and positioning in the niche segment form the basis for the growth in the long run.
Management did admit that such projects took time but at the same time noted that the opportunity was quite large. With India moving ahead with increased investments in nuclear power generation and targeting high power generation from nuclear plants, Sealmatic may be able to tap into projects where few local companies can provide their services.
Though it will take some time before the gains start coming, Sealmatic’s positioning indicates that India’s expansion in the nuclear sector could actually contribute towards its growth in the next phase.
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