Permanent Magnet — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Permanent Magnets Limited reported a challenging Q2 FY26 with a 12% YoY revenue decline to INR49 crores, primarily due to lower U.S. exports and weak domestic energy meter demand. Despite this, the company is progressing with key projects: a new alloy furnace by December, relay facility operational in Q4, and the Quantum Magnetics JV advancing. Management remains optimistic for FY27, projecting 20-30% revenue growth driven by new capacities and market diversification, while navigating customer approval delays and geopolitical uncertainties.

Highlights

  • Revenue from operations for Q2 FY26 stood at INR49 crores, representing a decline of 12% year-on-year.

  • Revenue from operations for H1 FY26 was INR102.7 crores, reflecting a decline of 7% year-on-year.

  • EBITDA margins were lower in Q2 due to reduced exports to the U.S. and weaker domestic demand in energy meter segments.

  • The new furnace for the alloy facility is expected to be installed by December 2025, with orders for incremental capacity already visible for Q4 FY26.

  • The relay facility is scheduled to become operational in Q4 FY26, though commercial orders are likely to start later due to prolonged customer approvals.

  • The Quantum Magnetics joint venture with Lorentic Pte Limited was executed in August 2025, with initial capex underway.

  • Management expects FY27 revenue growth to be between 20% to 30%, with FY26 growth estimated at 15%.

  • The total investment for Quantum Magnetics' 5,000-ton production plan by FY2030 is estimated at INR550-750 crores, targeting INR3,700 crores revenue and INR550 crores EBITDA.

Concerns

  • Lower exports and weaker domestic demand

Key financials

3 periods

Q2 FY26

  • Revenue
    ₹49 Cr
    YoY -12%

H1 FY26

  • Revenue
    ₹102.7 Cr
    YoY -7%

FY27 Expectation

  • EBITDA Margin
    16%

What they filed

Q1 FY27: revenue up 18.9%, net profit down 14.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue51 49 45 53 49 −4%57 +16%67 +47%63 +19%
EBITDA7 7 5 11 7 +4%11 +65%10 +87%12 +7%
Net profit4 3 3 7 4 +4%4 +32%5 +96%6 −14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Current Revenue Mix
    45% Energy Meter Application30% Automotive25% Other Divisions
  • Q2 FY26 Revenue Mix
    37% Energy Meter22% Automotive9% Magnetic Assembly10% CT7% Alloy15% Other Applications

Order book

medium confidence

Pipeline

other

Alloy business has good visibility, with customers already engaging and capacity currently running at 100%. New capacity is expected to be partially booked.

Cancellations & deferrals

  • deferred: Orders from a U.S. customer were deferred during Q2 due to changes in tariff policies, but business has since resumed.
Alloy business is running at full capacity with good visibility for new orders, while relay business is in the testing phase with slower customer adoption.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Quantum Magnetics JV funding will be through debt or equity or a combination in the subsidiary company.
    • New furnace for alloy facility
    • Relay facility setup
    • Quantum Magnetics JV initial phase (equipment orders)
    • Quantum Magnetics total investment for 5,000 tons production by FY2030 ₹550 Cr
    • Quantum Magnetics total investment for 5,000 tons production by FY2030 ₹750 Cr
    • Quantum Magnetics first phase capex for 500 tons ₹50 Cr
    • Quantum Magnetics first phase capex for 500 tons ₹100 Cr
    The new furnace for alloy facility is expected to be installed by December, as we have previously communicated. The relay facility is scheduled to become operational in Q4... Since then, the first phase of our capital expenditure plan has started with equipment orders placed and some equipment is already on the way to the facility... Our total plan to FY 2030 is 5,000 tons production which is about INR3,700 crores revenue till FY 2030, that is the plan we have. Total investment required for this will be between INR550 crores to INR750 crores... And first phase, capex can be about for 500 tons, it can be between INR50 crores to INR100 crores roughly. That we are still discussing whether we will do that by way of debt or equity or a combination in the subsidiary company.
  • M&A Lorentic Pte Limited (Quantum Magnetics JV) Joint venture · Executed

    To manufacture rare earth permanent magnets using India supply chain, addressing geopolitical issues related to Chinese supplies.

    50-50 investment from partner and PML.

    Our joint venture agreement with Lorentic Pte Limited was executed in August. JV is formed to manufacture rare earth permanent magnets. And the objective is to do it using India supply chain completely from India... Yes, there will be 50-50 investment from partner and from PML.

Guidance & targets

Revenue Growth

  • FY27 Revenue Growth Revenue Growth · FY27 · Medium confidence 20% to 30%
    It could be between 20% to 30% is my expectation today, depending on the visibility that we have, it may become higher if we get more alloy orders or EV orders or relay orders and this is my general judgment today.

    — Sharad Taparia

  • FY26 Revenue Growth Revenue Growth · FY26 · Medium confidence 15%
    And this year, about 15% is our expectation, we will close growth.

    — Sharad Taparia

Revenue

  • FY26 Total Revenue Revenue · FY26 · Medium confidence INR220 crores to INR230 crores
    Our expectation is roughly about maybe 10% to 15% growth. So we may end up between, let's say, INR220 crores to INR230 crores top line roughly, that is the expectation today, it may change based on the customer demand coming in this quarter. But today that is our visibility.

    — Sharad Taparia

  • FY27 Alloy Revenue Revenue · FY27 · Medium confidence INR40 crores to INR70 crores
    That depends on how much actual offtake customer will take, but we may be in the range of INR40 crores to INR70 crores maybe something like that is my expectation today.

    — Sharad Taparia

  • FY27 Relay Revenue Revenue · FY27 · Medium confidence INR20 crores to INR50 crores
    my expectation is maybe somewhere between INR20 crores to INR50 crores possibility is there.

    — Sharad Taparia

  • Quantum Magnetics Assembly Revenue (with import relaxation) Revenue · Medium confidence INR5 crores to INR10 crores
    So once it comes, then we will again start business, and that turnover can be about only from the assembly business can be about INR5 crores to INR10 crores, only from assembly business.

    — Sharad Taparia

  • Quantum Magnetics Block Cutting Revenue (after assembly) Revenue · Medium confidence INR20 crores to INR30 crores
    Again, that depending on how quickly all the machines are installed, but could be between maybe INR20 crores, INR30 crores could somewhere around that.

    — Sharad Taparia

  • Quantum Magnetics 500-ton Pilot Facility Revenue Revenue · Medium confidence INR300 crores to INR350 crores
    The 500 ton will be about INR300 crores to INR350 crores. INR350 crores, something like that, INR300 crores to INR350 crores.

    — Sharad Taparia

  • Quantum Magnetics Total Revenue Revenue · FY2030 · High confidence INR3,700 crores
    Our total plan to FY 2030 is 5,000 tons production which is about INR3,700 crores revenue till FY 2030, that is the plan we have.

    — Sharad Taparia

EBITDA Margin

  • Overall EBITDA Margin EBITDA Margin · FY27 · Medium confidence 16% to 18%
    Yes, 16% to 18%, something like that, we may expect.

    — Sharad Taparia

EBITDA

  • Quantum Magnetics Total EBITDA EBITDA · FY2030 · High confidence INR550 crores
    Right now, we are making all those plans, but broad level on INR3,700 crore final revenue, we can expect an EBITDA of roughly about INR550 crores, broadly, these are the numbers.

    — Sharad Taparia

Capex

  • Quantum Magnetics Total Investment Capex · FY2030 · High confidence INR550 crores to INR750 crores
    Total investment required for this will be between INR550 crores to INR750 crores.

    — Sharad Taparia

  • Quantum Magnetics First Phase Capex (500 tons) Capex · Medium confidence INR50 crores to INR100 crores
    And first phase, capex can be about for 500 tons, it can be between INR50 crores to INR100 crores roughly.

    — Sharad Taparia

What to watch in Q3 FY26

Alloy facility new furnace installation and production ramp-up

Q4 FY26
Current Expected by December 2025
Target Increased production and sales from new capacity

Why it matters

This new capacity is crucial for meeting existing demand and driving growth in the alloy segment, which is currently running at 100% capacity.

The new furnace for alloy facility is expected to be installed by December, as we have previously communicated. The visibility for orders for incremental capacity for alloy in Q4 is already there, so it will be possible to immediately increase productions once the new capacity comes online.

Risks & concerns

  • Lower exports and weaker domestic demand

    high

    Mainly due to lower exports, particularly to the U.S. and weaker domestic demand in the energy meter segments, leading to a 12% YoY revenue decline in Q2.

    Management acknowledged

  • Tariff policy changes and order deferrals

    medium

    Recent changes in U.S. tariff policies created uncertainty, leading to one U.S. customer deferring orders in Q2, though business has since resumed.

    Management acknowledged

  • Delays in customer approvals for relay facility

    medium

    Commercial orders for the relay facility are likely to start later than anticipated as customer approvals continue to take longer.

    Management acknowledged

  • Import restrictions for Quantum Magnetics components

    medium

    Manufacturing operations for components at Quantum Magnetics are awaiting import approvals after certain relaxations by the Chinese government.

    Management acknowledged

  • Slow customer adoption and extensive testing for relay products

    medium

    Customers are generally slower to adopt new relay products due to extensive testing requirements (e.g., 10-year performance for meters) before placing larger orders.

    Management acknowledged

  • Geopolitical issues and raw material sourcing for rare earth magnets

    medium

    Geopolitical issues related to Chinese rare earth supplies necessitate establishing an Indian supply chain, with plans to source from India and potentially other countries if capacity falls short.

    Management acknowledged

Q&A highlights

7 direct
Quantum Magnetics JV status, product types, and sourcing strategy Direct
JV is formed to manufacture rare earth permanent magnets. And the objective is to do it using India supply chain completely from India. World over, there are geopolitical issues related to mainly due to Chinese supplies and all customers want Indian Supply chain and that is what our plan is. So going forward, that is the plan in phase-wise manner, we are going to implement that plan.

Clarifies the strategic intent of the JV to establish an Indian rare earth magnet supply chain, addressing geopolitical risks and targeting multiple applications including automotive.

Asked by Praneeth

Timeline for commercial production of rare earth magnets from the JV Direct
Our next phase is to start with block cutting, from blocking cutting onwards to magnet production that is expected to go live by next year. So by, let's say, financial year '26, '27 it will start, somewhere let's say around first it will start.

Provides a concrete timeline for the start of magnet production, indicating a significant step towards full commercialization beyond just assembly.

Asked by Praneeth

Growth prospects and profitability for FY27 across alloy, relay, and Quantum Magnetics segments Direct
Yes. I'm quite optimistic on the growth prospects for '27. But that depends on how much order booking we are able to do for alloy business particularly. That seems to be well on the way because we are currently running at 100% capacity. And now we are increasing the capacity, that capacity also, we see visibility, good visibility. Customer is already engaging with us. So my expectation is a good level of growth in FY '27.

Management expresses strong optimism for FY27 growth, particularly in the alloy business, and provides an overall EBITDA margin expectation, which is crucial for future earnings projections.

Asked by Ankit Gupta

Impact of US tariffs on the meter segment and alternative manufacturing strategies Direct
So we are now discussing alternate place of manufacturing also, including Europe, major portion of manufacturing to be done in Europe, which will reduce the tariff, it will increase the cost which the customer is willing to pay, but it will be still lower than the tariff which has been charged from India.

Reveals the company's proactive strategy to mitigate tariff impacts by exploring manufacturing in Europe, indicating flexibility and customer willingness to absorb some cost for supply chain resilience.

Asked by Dhwanil Desai

Financial planning and return expectations for the Quantum Magnetics JV Direct
Right now, we are making all those plans, but broad level on INR3,700 crore final revenue, we can expect an EBITDA of roughly about INR550 crores, broadly, these are the numbers. ... Total investment required for this will be between INR550 crores to INR750 crores.

Provides long-term financial targets for the JV, including revenue, EBITDA, and total investment, offering a clear vision of the project's potential scale and profitability.

Asked by Raghvendra Singh

Pricing strategy for rare earth magnets compared to Chinese suppliers and customer willingness to pay a premium Direct
Yes, so in the rare earth magnet, there are multiple markets. There are some low-end products also low-quality products also there. We don't want to compete in that segment. We want to compete only in the higher segment, good quality higher-quality products. And there, we will be able to match the Chinese prices mostly. But customers are willing to pay the premium.

Highlights the company's strategy to focus on higher-quality, higher-segment products where they can match Chinese prices and leverage customer willingness to pay a premium for non-Chinese supply, indicating a sustainable competitive advantage.

Asked by Praneet

Application and market potential of standardized current sensors, including for 4-wheelers Direct
We have started pitching to all companies, including 4 wheelers also. This is a standard current sensor range website also. It is typically 300 to 1,000 MPL current sensors, and it can be applied. It can be used in automotive, it can be used in UPS type of applications, other industrial applications.

Indicates a significant market expansion opportunity for standardized current sensors beyond 2-wheelers, with potential applications in various industrial sectors, suggesting future growth drivers.

Asked by Sanjay Kumar

3 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview

Permanent Magnets Limited reported a challenging Q2 FY26, with revenue from operations declining by 12% year-on-year to INR49 crores. The first half of FY26 also saw a 7% year-on-year decline, reaching INR102.7 crores. These declines were primarily attributed to lower exports, particularly to the U.S., and weaker domestic demand within the energy meter segments. EBITDA margins were also impacted in Q2 due to this reduction in exports and the overall product mix.

Project Execution and Capacity Expansion

The company is actively progressing on several key projects. The new furnace for the alloy facility is on track for installation by December 2025, with strong order visibility for incremental capacity in Q4 FY26. The relay facility is scheduled to become operational in Q4 FY26, although commercial orders are expected to ramp up gradually due to longer-than-anticipated customer approval processes. Trial orders are expected to be supplied in Q4, with commercial production following thereafter.

Quantum Magnetics Joint Venture Update

The joint venture agreement for Quantum Magnetics with Lorentic Pte Limited was successfully executed in August 2025. This JV aims to manufacture rare earth permanent magnets using an entirely Indian supply chain, addressing geopolitical concerns related to Chinese supplies. The first phase of capital expenditure has commenced, with equipment orders placed. The total plan for Quantum Magnetics by FY2030 targets 5,000 tons of production, generating INR3,700 crores in revenue and approximately INR550 crores in EBITDA, with an estimated total investment of INR550-750 crores. The initial phase capex for a 500-ton pilot facility is estimated at INR50-100 crores, with funding to be determined through debt, equity, or a combination.

Market Dynamics and Product Diversification

The domestic energy meter business experienced lower demand due to customer-specific factors. However, the alloy segment saw higher volumes in Q2 compared to Q1. The company is actively diversifying its product portfolio and customer base. For the energy meter industry, it is forward integrating into manufacturing relays, shunts, and CTs. In the automotive sector, the company has launched a range of standardized current sensors, already being supplied to 2-wheelers and being pitched to 4-wheelers and other industrial applications like UPS.

Outlook and Guidance

Management is optimistic about future growth, projecting a 20-30% revenue growth for FY27. For FY26, the company expects to close with approximately 15% growth, targeting a total revenue of INR220-230 crores. Overall EBITDA margins are expected to be in the range of 16-18% for FY27. The alloy business is projected to contribute INR40-70 crores in FY27, while the relay business is expected to generate INR20-50 crores. The company also noted that a government scheme of INR7,300 crores for rare earth magnets is anticipated to be announced by December 2025 or January 2026.

Rare Earth Magnet Sourcing and Pricing Strategy

Permanent Magnets Limited plans to source rare earth metals primarily from India, leveraging India's fifth-largest reserves and ongoing government initiatives in mining. If domestic capacity falls short, imports from other countries will be considered. The company's strategy for rare earth magnets focuses on higher-segment, good-quality products, where they expect to match Chinese prices and benefit from customers' willingness to pay a premium for non-Chinese supply, driven by geopolitical considerations.

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