Permanent Magnet — Q4 FY26 earnings call

Call held 18 May 2026

Management summary

Permanent Magnets Limited reported strong Q4 and FY26 standalone revenue growth, with full year EBITDA margins improving. Key projects like Alloys saw commercialization, but Relays faced delays. The rare earth magnet segment had no revenue in FY26 due to Chinese restrictions. The company plans significant capex for FY27 across its growth pillars, funded by a mix of debt and equity.

Highlights

  • Standalone revenue for Q4 FY26 increased 47% year-on-year to INR 66 crores.

  • Full year Standalone revenue grew 13% year-on-year to INR 225 crores.

  • EBITDA margins for FY26 improved to 17% compared to 14% in the previous year, aided by favorable product mix and revenue scale-up.

  • The new furnace in the Alloys division was installed and commercialized in Q4 FY26, contributing to performance.

  • Second half of FY26 showed better top-line growth, led by Alloys division and overall recovery in exports.

Concerns

  • The Relays project is behind original timelines, with commercial ramp-up now expected from H2 FY27.

  • No revenue was generated from rare earth magnets in FY26 due to restrictions from China for export of magnets.

  • Q4 EBITDA margins came in at 15%, showing some moderation on a sequential basis.

  • EV demand has been slow, particularly impacting supply to European and American companies, with no business from aggressively growing Chinese EVs.

Key financials

3 periods

Q4

  • Standalone Revenue
    ₹66 Cr
    YoY +47%

Q4 FY26

  • EBITDA Margin
    15%

FY26

  • Standalone Revenue
    ₹225 Cr
    YoY +13%
  • EBITDA Margin
    17%

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.

Capital allocation

high confidence
  • Capex ₹40 Cr combination of debt and equity
    • PML standalone operations (including INR 20 crores for new factory) ₹50 Cr
    • Quantum Magnetics (PML's contribution) ₹50 Cr
    • Alloys division (done) ₹18 Cr
    • Relays project (done) ₹5 Cr
    • New factory to combine 6 plants at Vasai ₹20 Cr
    • Quantum Magnetics Phase 2 capex (block cutting, machining, surface treatment)
    It could be between INR 40 crores to INR 50 crores for PML itself and another INR 40 crores to INR 50 crores could be the plan in Quantum, roughly. ... Out of this INR 50 crores, INR 20 crores we will be spending to set up new factory. ... So, we will do a combination, maybe in debt and equity, maybe we will do. That we are yet to finalize.
  • Debt Net ₹20 Cr
    It is not INR85 crores debt. Debt is around INR20 crores. You are maybe consolidated debt. So we got $5 million of ECB in our subsidiary.

Guidance & targets

Revenue

  • FY27 Revenue Growth Revenue · FY27 · Medium confidence 20% to 30%
    On revenue front, you can consider maybe 20% to 30% depending on what orders we click.

    — Sharad Taparia

  • Relays Project Revenue Revenue · FY27 · Medium confidence INR 25 crores to INR 50 crores
    See, the current capacity that we are planning to set up, we can expect maybe in FY27 maybe between INR 25 crores to INR 50 crores, maybe something like this could be possible.

    — Sharad Taparia

  • Quantum Magnetics Revenue Revenue · Q4 FY27 · Medium confidence INR 10 crores to INR 15 crores
    So that we are estimating maybe about INR10 crores, INR15 crores, something like that may happen in quarter 4.

    — Sharad Taparia

  • Rare Earth Magnet Long-term Revenue Potential Revenue · Long-term · Medium confidence INR 3,000 crores to INR 4,000 crores
    And in totality, 5,000 tonnes, depending on the sale price, it can range from somewhere between, let's say, INR 3,000 crores to maybe INR 4,000 crores, something like that, 5,000 tonnes.

    — Sharad Taparia

Margin

  • FY27 EBITDA Margins Margin · FY27 · Medium confidence 15% to 18%
    Margins at similar level only, we can assume. ... Yes, EBITDA, roughly that level, 15%, 17%. 15% to 18% you can say.

    — Sharad Taparia

Capacity

  • Alloys Division Ramp-up Capacity · FY27 · Medium confidence 3 to 4 times last year's volume
    And now ramp-up, approximately, as per current estimates, we are looking this year to about, let's say, in financial year '27 to maybe about 3 to 4 times what we have done in the last year.

    — Sharad Taparia

  • Rare Earth Magnet Long-term Capacity Capacity · Long-term · Medium confidence 5,000 tonnes
    This is a long-term plan to set up 5,000 tonne capacity.

    — Sharad Taparia

Capex

  • FY27 Capex for PML Capex · FY27 · High confidence INR 40 crores to INR 50 crores
    It could be between INR 40 crores to INR 50 crores for PML itself

    — Sharad Taparia

  • FY27 Capex for Quantum (PML contribution) Capex · FY27 · High confidence INR 40 crores to INR 50 crores
    and another INR 40 crores to INR 50 crores could be the plan in Quantum, roughly.

    — Sharad Taparia

  • New Factory Capex Capex · FY27 · High confidence INR 20 crores
    Out of this INR 50 crores, INR 20 crores we will be spending to set up new factory.

    — Sukhmal Jain

What to watch in Q1 FY27

Relays project commercial ramp-up and revenue contribution

H2 FY27
Current Behind original timelines, testing underway, commercial ramp-up expected H2 FY27.
Target Commercial business picking up pace, INR 25-50 crores revenue in FY27.

Why it matters

The Relays project is a key new growth pillar, and its successful commercialization and revenue generation are critical for future growth.

On the Relays project, we are behind the original timelines with commercial ramp-up now expected from second half of financial year '27. Testing is currently underway and customer approvals are in progress, both of which have taken longer than our initial expectations. While the facility is almost ready, we foresee commercial business picking up pace only in the later part of this year.

Risks & concerns

  • Chinese restrictions on rare earth magnet exports

    high

    No revenue was generated from rare earth magnets in FY26 due to restrictions from China for export of magnets, impacting business in this segment.

    Management acknowledged

  • Relays project execution delays

    medium

    The Relays project is behind original timelines, with commercial ramp-up now expected from H2 FY27 instead of earlier expectations.

    Management acknowledged

  • Slowdown in EV demand for specific platforms

    medium

    PML's EV business primarily supplies European and American companies, which are experiencing a slowdown, and the company does not have business with aggressively growing Chinese EVs.

    Analyst acknowledged

  • Increased competition in Quantum Magnetics (rare earth segment)

    medium

    Multiple companies are planning to set up operations and applying for PLI schemes in the Quantum Magnetics segment, indicating future competitive pressure.

    Analyst acknowledged

Q&A highlights

6 direct
PLI scheme for rare earth segment and capex incentives Partial
We are yet evaluating the scheme, and that decision will be made... There are multiple schemes. So which scheme to apply for that is also one of the things that we are considering?

Indicates the company is exploring government incentives for a strategic growth area but has not yet committed to a specific scheme or capex plan related to it.

Asked by Prathamesh Dhiwar

FY26 revenue and margins from rare earth assembly Direct
There was no revenue in FY26 because of the restrictions from China for export of magnets. So, we could not do any business in FY26. So those revenues are expected to start in FY27.

Clarifies that the rare earth segment contributed no revenue in the past fiscal year due to external trade restrictions, setting clear expectations for its future contribution starting FY27.

Asked by Prathamesh Dhiwar

Clarification on debt levels and funding for capex Direct
It is not INR85 crores debt. Debt is around INR20 crores. You are maybe consolidated debt. So we got $5 million of ECB in our subsidiary.

Corrects a significant misunderstanding regarding the company's debt figures, indicating a much lower standalone debt and explaining the consolidated figure includes an ECB.

Asked by Rohit

Peak revenue potential and utilization for the Relays project in FY27 Direct
See, the current capacity that we are planning to set up, we can expect maybe in FY27 maybe between INR 25 crores to INR 50 crores, maybe something like this could be possible. But, it depends on how aggressive customer, how many orders we get from the customer, how fast we click the business.

Provides a specific revenue range for the Relays project in FY27, but highlights that actual realization is contingent on customer adoption and order flow, introducing an element of variability.

Asked by Nishita

Easing of Chinese restrictions on raw materials for rare earth magnets Direct
No, we did not get any approval for our products that we were importing. So there has been no sale in the last year. But we see that customers are now moving away from the heavy rare earth to light rare earth options. And that we are seeing a lot of customers doing that. So that will probably help in future.

Confirms that Chinese restrictions are still impacting raw material imports but points to a positive trend of customers shifting to light rare earth, which could benefit PML in the future.

Asked by Nayan Agarwal

Past delays in project commercialization and ramp-up Direct
Yes. We were expecting it to implement much earlier. We were expecting the Relay to start much earlier. That did not happen. So it has been delayed to that extent, yes.

Management acknowledges previous delays in project execution, providing context for current timelines and potentially influencing investor confidence in future project delivery.

Asked by Vivek Seth

Impact of EV demand slowdown on PML's business Partial
For the EV business, our supply is mainly to European companies and American companies. We understand that the major growth is being taken up by Chinese companies for EVs. So we did not experience orders for our products that we are selling currently to those platforms... But in totality, I feel that the Chinese EVs are far more, they are coming in far more aggressively. So that we do not have any business for the Chinese EVs.

Explains that PML's EV segment is affected by slowdowns in European/American markets and is not currently benefiting from the rapid growth of Chinese EVs, limiting its market exposure.

Asked by Vivek Seth

Feasibility of 100% utilization for Relays project in H2 FY27 and growth drivers Direct
Yes, that is our judgment of sales that we will do after September. That is the judgment today. Now it can change based on how early the customer adopts and whether they want to ramp up faster or slower, that may change. So that is our judgment today from the indication that we have from the customer.

Reiterates the target for high utilization in Relays but adds a crucial caveat about customer adoption speed, indicating that the actual ramp-up could vary from current projections.

Asked by Nishita

3 min read 6 chapters

Detailed narrative

Q4 & FY26 Performance Overview

Permanent Magnets Limited delivered a strong Q4 FY26, with standalone revenue from operations increasing 47% year-on-year to INR 66 crores. For the full fiscal year, standalone revenue reached INR 225 crores, reflecting a 13% year-on-year increase. The company's EBITDA margins for FY26 improved to 17% from 14% in the previous year, attributed to a favorable product mix and revenue scale-up in the second half. Q4 EBITDA margins stood at 15%, showing some moderation sequentially.

Project Updates: Alloys, Relays, and Quantum Magnetics

The new furnace in the Alloys division was successfully installed and commercialized in Q4 FY26, contributing to the quarter's performance, with plans to further scale up commercial production in FY27. However, the Relays project is behind its original timelines, with commercial ramp-up now expected in H2 FY27 due to longer-than-expected testing and customer approvals. For Quantum Magnetics, Phase 2 capex is planned for Q3-Q4 FY27, and future investments for powder-to-block manufacturing are under planning. No revenue was generated from rare earth magnets in FY26 due to Chinese export restrictions, but sales are expected to commence in FY27.

FY27 Outlook and Growth Drivers

Management projects a revenue growth of 20-30% for FY27, with EBITDA margins expected to remain in the 15-18% range. The Relays project is anticipated to contribute INR 25-50 crores in FY27, while Quantum Magnetics is expected to generate INR 10-15 crores in Q4 FY27. The Alloys division is targeted to ramp up its performance by 3 to 4 times compared to the previous year. The company's focus for the coming year is on scaling up commercial operations across these key growth pillars.

Capital Expenditure and Debt Strategy

PML plans significant capex for FY27, with an estimated INR 40-50 crores for standalone operations and an additional INR 40-50 crores as its contribution to Quantum Magnetics. This includes INR 20 crores for a new factory near Vasai, which will consolidate six existing plants. The funding for this capex is expected to be a combination of debt and equity, which is currently being finalized. The company clarified its standalone debt is around INR 20 crores, with consolidated debt including a $5 million ECB in its subsidiary.

Rare Earth Magnet Market Dynamics and Competition

The company is evaluating various government PLI schemes for the rare earth segment to assess potential incentives for capex. While Chinese restrictions prevented rare earth magnet revenue in FY26, management observes a shift in customer preference from heavy rare earth to light rare earth options, which could benefit PML. The long-term vision for rare earth magnets includes a 5,000-tonne capacity, with a potential revenue of INR 3,000-4,000 crores. However, competition is expected to increase, with multiple companies planning to enter this segment and apply for PLI schemes.

EV Market Exposure and Challenges

PML's EV business primarily supplies European and American companies, which have experienced a slowdown. The company noted that the major growth in the EV sector is being driven by Chinese companies, with whom PML currently has no direct business. While there are plans to develop products for Chinese companies with Indian collaborations, direct sales into China have not yet been achieved. This market dynamic limits PML's participation in the most aggressive growth areas of the global EV market.

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