BMW Industries — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Q2 FY26 was a transitional quarter for BMW Industries, marked by temporary challenges in TMT and CGL segments due to raw material constraints and subdued market conditions. Despite this, the company reported a revenue of INR 144.9 crores and an operating EBITDA of INR 36.9 crores, with a margin of 25.5%. Strategic initiatives, including the Bokaro Greenfield project, are progressing as planned, with commercial operations for color-coated products expected by Q1 FY27, supporting a robust medium-term growth outlook.

Highlights

  • Revenue stood at INR 144.9 crores for Q2 FY26.

  • Operating EBITDA was INR 36.9 crores, growing 4.8% year-on-year.

  • Operating EBITDA margin achieved 25.5%.

  • Profit after tax (PAT) reached INR 15.2 crores, with a PAT margin of 10.3%.

  • Phase 1 of the Bokaro Greenfield project is on track, with commercial operations for color-coated products scheduled for Q1 FY27.

  • Medium-term consolidated revenue is guided to grow at a 75% CAGR over the next 3 fiscals.

  • PAT is expected to grow at a robust 40% CAGR over the next 3 fiscals, with ROCE over 18% by FY28.

  • External credit rating reaffirmed at 'A' by India Ratings and Research.

Key financials

  1. Revenue ₹144.9 Cr
  2. Operating EBITDA ₹36.9 Cr +4.8%YoY
  3. Operating EBITDA Margin 25.5%
  4. PAT ₹15.2 Cr
  5. PAT Margin 10.3%

What they filed

Q1 FY27: revenue up 12.2%, net profit up 26.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue150 147 157 148 145 −3%162 +10%209 +33%166 +12%
EBITDA35 36 34 32 37 +6%39 +8%58 +71%34 +6%
Net profit18 17 18 15 15 −17%18 +6%33 +83%19 +27%
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.

Order book

medium confidence

Cancellations & deferrals

  • deferred: TMT segment volumes impacted by raw material constraints and pending contract renewals.
  • deferred: CGL volumes affected by raw material shortages at customer end and subdued market conditions.
The Pipes and Tubes segment has its entire capacity contracted to a primary customer, with a contract extended until H1 FY27 for INR 365 crores. TMT and CGL segments faced temporary volume impacts due to raw material issues and pending contract renewals.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹42.8 Cr this quarter · ₹800 Cr (up to March '27) planned mix of debt and equity
    • Bokaro Greenfield project ₹800 Cr
    We have already spent INR42.8 crores of capex as of September '25. And what is the stage-wise capex deployment plan for the next 12 months? ... So your total -- we'll be spending close to about INR800 crores up to March '27. As things are now, the numbers that you have in front of your September ended. As of now, we have spent in something in the range of about INR60 crores. ... And yes, so combined till FY '27 and we are looking to spend something close to INR800 crores, which is a mix of debt and equity.
  • Debt Gross ₹500 Cr
    So INR500 crores, that is the loan amount?

Guidance & targets

Revenue

  • Consolidated Revenue CAGR Revenue · next 3 fiscals · High confidence 75%
    We reaffirm our medium-term growth guidance. As over the next 3 fiscals, we anticipate consolidated revenue to grow at a CAGR of approximately 75% driven by the phased commissioning of Bokaro Greenfield project as well as our existing business vertical organic growth.

    — Harsh Bansal

Profitability

  • Operating EBITDA CAGR Profitability · next 3 fiscals · High confidence 45%
    Operating EBITDA is expected to grow at a CAGR of 45% over the same period with the operating EBITDA margin stabilizing at about 11% by FY '28 as we progressively integrate the new and existing business lines.

    — Harsh Bansal

  • PAT CAGR Profitability · next 3 fiscals · High confidence 40%
    While margins may normalize, the top line is set to expand materially, and PAT is expected to grow at a robust 40% CAGR over the next 3 fiscals with PAT margin expected to stabilize at about 5% by FY '28

    — Harsh Bansal

  • Return on Capital Employed (ROCE) Profitability · by FY '28 · High confidence 18%
    resulting in a capital on - sorry, resulting in a return on capital employed of over 18%.

    — Harsh Bansal

Margin

  • Operating EBITDA Margin Margin · by FY '28 · High confidence 11%
    Operating EBITDA is expected to grow at a CAGR of 45% over the same period with the operating EBITDA margin stabilizing at about 11% by FY '28 as we progressively integrate the new and existing business lines.

    — Harsh Bansal

  • PAT Margin Margin · by FY '28 · High confidence 5%
    While margins may normalize, the top line is set to expand materially, and PAT is expected to grow at a robust 40% CAGR over the next 3 fiscals with PAT margin expected to stabilize at about 5% by FY '28

    — Harsh Bansal

Capacity

  • Bokaro Phase 1 Commercial Operations Capacity · Q1 FY '27 · High confidence Begin
    Phase 1 of the Greenfield project at Bokaro remains on track with commercial operations for color-coated products scheduled to begin in quarter 1 of FY '27

    — Harsh Bansal

  • Bokaro Project Full Operationalization Capacity · by FY '27 end · High confidence Operational
    The entire project is expected to get operational by FY '27 end.

    — Harsh Bansal

Capex

  • Bokaro Project Total Capex Capex · up to March '27 · High confidence 800 crores
    So your total -- we'll be spending close to about INR800 crores up to March '27.

    — Harsh Bansal

Dividend

  • Dividend Payout Dividend · this year · High confidence 13% to 15%
    We'll maintain the promise that we've made to the shareholders. We'll continue with our guidance of 13% to 15%.

    — Harsh Bansal

What to watch in Q3 FY26

TMT Segment Volume Normalization

Coming months
Current Impacted by raw material constraints and pending contract renewals.
Target Operations normalized, volumes stabilized.

Why it matters

Recovery of key segment performance and contribution to overall volumes.

With negotiations now in the final stages, operations are expected to normalize and volumes stabilize over the coming months.

Risks & concerns

  • Temporary challenges in TMT and CGL segments

    medium

    Raw material constraints and pending contract renewals impacted TMT volumes, while CGL volumes were affected by raw material shortages and subdued market conditions.

    Management acknowledged

  • Subdued market conditions

    medium

    Subdued market conditions contributed to lower CGL volumes.

    Management acknowledged

  • Customer concentration in Pipes and Tubes segment

    medium

    Entire capacity in Pipes and Tubes is contracted to a primary customer, posing concentration risk.

    Analyst acknowledged

  • Impact on ROE/ROCE from new investments

    medium

    Higher investments in proprietary products not yet fully ramped up led to a temporary reduction in ROE/ROCE.

    Analyst acknowledged

Q&A highlights

5 direct
Impact of higher investments on ROE/ROCE and recovery path Direct
So the reduction is essentially because we have had higher investments on account of our own proprietary products and sales, which is not yet fully ramped up. So once it fully ramps up and that cycle hits in, then a lot of these metrics will come to a stable state. And typically, what happens is the H1, indicators are always lower than the full year indicators. So I would request you not to compare the September numbers with the March full year numbers.

Analyst questioned the decline in profitability ratios, and management explained it as a temporary effect of new investments not yet fully ramped up, providing a timeline for recovery.

Asked by Virag

Timeline for TMT contract renewals and volume ramp-up targets Partial
One is I would not want to put a final time line on closure of the negotiations. I'm just a little superstitious, I might jinx it. So I'll leave that for now. But like I told Bhavesh, I will surely come out with a press release within 24 hours of the contract getting finalized. That is one.

Analyst sought specific timelines for critical contract renewals, but management was hesitant to provide exact dates, indicating sensitivity around ongoing negotiations.

Asked by Aditya

Customer concentration risk in Pipes and Tubes segment Direct
No, we are not. So, we have our entire capacities are contracted to our primary customer. And we are not looking at any other customers in that segment as things stand now.

Analyst probed a potential risk, and management confirmed high customer concentration, indicating a strategic choice rather than a diversification effort in this segment.

Asked by Aditya

Confidence in meeting FY26 numbers given challenges Direct
Your first question, I'm fairly confident about achieving the numbers, partly because when we gave the guidance of those numbers, we have not taken into account our own galvanized product sales, which has come as a result of changing priorities for the customer in the last quarter.

Analyst challenged the company's ability to meet targets amidst current challenges, and management expressed confidence, citing factors not initially included in guidance.

Asked by Mohan Bogade

Strategy to sustain and grow Pipes and Tubes segment beyond H1 FY27 contract expiration Partial
So I think this is a part of our offering on the conversion vertical. We are not we have given a guidance of up to FY '28 on this, where the capacity that we hope to finally create by the end of this year, about 700,000 tons. Till at least FY '28, we are looking at consistently ramping up the volumes in this.

Analyst inquired about long-term strategy for a key segment, and management provided a high-level vision focused on capacity ramp-up rather than specific post-contract strategies.

Asked by Aditya

Pricing of color-coated products and ZAM products Partial
No. I mean, as of now, it's a little early to be talking about pricing when I don't know what the HR coil pricing or the zinc pricing is going to be at that point in time. These are the 2 major inputs for color coating. On the question of ZAM, needless to say, ZAM will be a higher value-added product. But if you look at the Indian market, there is still no full-fledged commercial seller of ZAM products in India.

Analyst sought specific pricing details for new products, but management indicated it's too early, highlighting market dynamics and raw material dependencies.

Asked by Neil

When will revenues cross INR 200-250 crores given flat performance? Direct
I do expect that you'll start to see traction maybe in the next couple of quarters at the max. Q1 FY '27 for sure, because that will mean an integration of a new product, which will add significant top lines on that. or [non-debt 0:32:34]. So Q1 '27 for sure. But you will start to see the flat lines curving upwards before that.

Analyst pressed on the timeline for significant revenue growth, and management provided a clear expectation tied to new product integration.

Asked by Bhavesh

Lenders for INR 500 crores Greenfield capex and rationale for debt over equity Direct
Point well taken, but that is, in our view, much cheaper than equity. We will raise equity to give our stakeholders an opportunity to increase their stakes. But at this point, I feel that the debt is continued to be cheaper than equity.

Analyst questioned the funding choice, and management articulated a clear financial rationale for prioritizing debt while also acknowledging future equity raising for stakeholder participation.

Asked by Bhavesh

2 min read 5 chapters

Detailed narrative

Q2 FY26 Performance Overview

BMW Industries reported Q2 FY26 revenue of INR 144.9 crores and an operating EBITDA of INR 36.9 crores, marking a 4.8% year-on-year growth. The operating EBITDA margin stood at 25.5%, with a PAT of INR 15.2 crores and a PAT margin of 10.3%. The quarter was characterized as transitional, facing temporary challenges in the CGL and TMT segments.

Operational Challenges and Mitigation

Performance in the TMT segment was impacted by raw material constraints and pending contract renewals, while CGL volumes suffered from raw material shortages at the customer end and subdued market conditions. To optimize capacity utilization, the company initiated proprietary production and sales of galvanized coils. Management expects TMT operations to normalize and volumes to stabilize in the coming months as negotiations are in final stages.

Bokaro Greenfield Project Update

The Phase 1 of the Bokaro Greenfield project is on track, with commercial operations for color-coated products scheduled to commence in Q1 FY27. This project is a key component of the company's integration strategy and capacity expansion, with a total capex of approximately INR 800 crores planned until March 2027, funded by a mix of debt and equity. Around INR 60 crores has been spent so far, and expenditure is expected to pick up post financial closure.

Medium-Term Growth Outlook

The company reaffirmed its medium-term guidance, anticipating consolidated revenue to grow at a CAGR of 75% over the next three fiscals, driven by the Bokaro project and organic growth. Operating EBITDA is projected to grow at a 45% CAGR, with margins stabilizing at 11% by FY28. PAT is expected to grow at a robust 40% CAGR, with margins stabilizing at 5% by FY28, leading to a return on capital employed of over 18%.

Capital Structure and Credit Rating

The company's external credit rating was reaffirmed at 'A' by India Ratings and Research, reflecting a strong balance sheet and prudent financial management, despite additional debt planned for the Bokaro expansion. Management indicated that debt remains cheaper than equity, though they are open to raising equity on the secondary market if needed to allow stakeholders to increase their stakes. The dividend payout guidance of 13-15% will be maintained.

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