BMW Industries — Q4 FY26 earnings call

Call held 7 May 2026

Management summary

BMW Industries Ltd. reported its highest ever quarterly and annual profits for Q4 and full year FY26, driven by strong operating momentum and improved capacity utilization. The Bokaro greenfield project is progressing as planned, with phased commissioning expected to begin in Q1 FY27. The company provided robust growth guidance for revenue, EBITDA, and PAT through FY28, while also addressing concerns regarding working capital and raw material volatility.

Highlights

  • Q4 Operating Income of INR210 crores, Operating EBITDA of INR58 crores with a 27.5% margin, and PAT of INR33 crores with a 15.4% margin, marking highest ever quarterly profits.

  • Full Year Operating Income of INR665 crores, Operating EBITDA of INR165 crores with a 24.8% margin, and PAT of INR81 crores with an 11.9% margin, marking highest ever annual profits.

  • CRM complex production increased to ~718,000 metric tons, with annualized utilization improving to 70.9% from 66.9% in December.

  • Pipes and tubes production grew to 201,000 metric tons from ~177,000 metric tons in FY25.

  • Bokaro greenfield project is on track for phased commissioning starting Q1 FY27, with INR109 crores invested from internal accruals.

  • Recommended a final dividend of INR0.43 per share, reflecting a 12% payout ratio.

Concerns

  • Trade receivables increased significantly from ~INR80 crores in FY25 to ~INR150 crores in FY26, primarily due to a timing issue with a key customer's payments.

  • Volatility in raw material components like zinc, aluminum, and magnesium poses a risk for long forward orders without proper hedging strategies, potentially leading to downside risk.

  • Raw material constraints on the customer side for the TMT rolling mill business.

Key financials

2 periods

Q4

  • Operating Income
    ₹210 Cr
  • Operating EBITDA
    ₹58 Cr
  • EBITDA Margin
    27.5%
  • PAT
    ₹33 Cr
  • PAT Margin
    15.4%

FY26

  • Operating Income
    ₹665 Cr
  • Operating EBITDA
    ₹165 Cr
  • EBITDA Margin
    24.8%
  • PAT
    ₹81 Cr
  • PAT Margin
    11.9%

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

Execution

order to delivery gap of maybe about two weeks

Management indicated that it's too early to accumulate a significant order book for the new Bokaro project as plants are not yet commissioned. For existing products, the order-to-delivery cycle is short (about two weeks), making a traditional order book less relevant.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹800 Cr INR109 crores from internal accruals, INR143 crores from debt drawdown for Bokaro project, with the remaining funded by a mix of debt and equity.
    • Bokaro greenfield project ₹800 Cr
    Net debt also includes debt drawdown on account of the Bokaro greenfield project to the extent of INR143 crores. Importantly, healthy and consistent operating cash flows enabled the company to invest INR109 crores of internal accruals into the expansion at Bokaro. So once your project is completed on the Bokaro where you're spending nearby INR800-odd crores, what sorts of IRR are we working on?
  • Debt Net ₹364 Cr · 0.5× EBITDA
    Net debt during the year stood at INR364 crores with a net debt to equity ratio of 0.45x. Net debt to equity excluding borrowings for the Bokaro project stood at 0.27x. Will it because see currently our total debt on the book is almost INR370 crores, of which 135 is short-term borrowings, right? So this for INR370 crores can probably take it at around INR800 crores or INR700 crores by end of FY28? That's fair. That's fair. That's a fair assumption. INR700 crores to INR800 crores could be the numbers we work out for.
  • Dividend ₹0.43/share (final) Payout ratio 12%
    Reflecting on this performance, the Board has recommended a final dividend of INR0.43 per share resulting in a payout ratio of 12% reinforcing our commitment to delivering consistent shareholder returns while continuing to invest in growth.
  • Liquidity Liquidity disclosed Internal accruals of INR109 crores were used to fund the Bokaro expansion.
    healthy and consistent operating cash flows enabled the company to invest INR109 crores of internal accruals into the expansion at Bokaro.

Guidance & targets

Revenue

  • Revenue CAGR Revenue · FY25 to FY28 · High confidence 75%
    We reiterate our earlier guidance of a CAGR of approximately 75% over FY '25 to FY '28 period supported by the phased commissioning and ramp-up of Bokaro greenfield project along with continued organic growth across the existing business verticals.

    — Harsh Bansal

  • Legacy business peak revenue Revenue · Peak · Medium confidence INR800-900 crores
    I think it's fair to assume between INR800 crores to INR 900 crores.

    — Harsh Bansal

Profitability

  • Operating EBITDA CAGR Profitability · FY25 to FY28 · High confidence 45%
    In line with the above guidance, operating EBITDA and PAT is expected to grow at a CAGR of nearly 45% and 40% respectively over the same periods.

    — Harsh Bansal

  • PAT CAGR Profitability · FY25 to FY28 · High confidence 40%

    — Harsh Bansal

  • Bokaro project IRR Profitability · Post completion · High confidence Above 20%
    So, our base case for an investment is a 20%, so in this case it's safe to say it's above that.

    — Harsh Bansal

  • ROCE (blended basis) Profitability · Post completion · High confidence 15% plus
    So on a blended basis, we expect to reach 15 plus.

    — Harsh Bansal

Margin

  • EBITDA margins stabilization Margin · by FY28 · High confidence 12-13%
    EBITDA and PAT margins are expected to gradually stabilize at around 12% to 13% and 5% to 6% respectively by FY '28 as the benefits of integration scale and operating leverage begin to materialize.

    — Harsh Bansal

  • PAT margins stabilization Margin · by FY28 · High confidence 5-6%

    — Harsh Bansal

Capacity Utilization

  • Tubes division utilization Capacity Utilization · next 2 to 3 years · Medium confidence 60-65%

    From 33-34% today

    For example, from the tubes division where we have created substantial capacities but are fairly underutilized. So over the next 2 to 3 years, we expect the utilization levels to go from the existing 33%- 34%-odd to closer to 60% to 65%.

    — Harsh Bansal

Project Timeline

  • Bokaro greenfield project commissioning Project Timeline · Q1 FY27 · High confidence Phased commissioning starting Q1 FY27
    FY '26 has been a pivotal year operationally marked by strong progress on our greenfield downstream steel complex at Bokaro, which remains on track for phased commissioning starting quarter one FY '27.

    — Harsh Bansal

  • Bokaro color coated section saleable production Project Timeline · Q1 FY27 · High confidence Starting Q1 FY27
    On the second part of your question, we are looking at starting saleable production of the color coated section in this quarter. This will be then followed in subsequent quarters by the Galvalume facility, Cold Rolling, Pickling, etc.

    — Harsh Bansal

  • Bokaro meaningful sales top line Project Timeline · Q2 FY27 · High confidence Starting Q2 FY27
    In quarter one there will be some but I wouldn't want to club those sales with these sales for the benefit of not confusing you. meaningful sales top line reflected starting from quarter two.

    — Harsh Bansal

Working Capital

  • Bokaro working capital cycle Working Capital · Steady state · High confidence 30-40 days
    So, we are targeting a working capital cycle of about 30 days in Bokaro. But I mean a lot of it will depend on where we buy the steel from, what is the product that we ultimately sell, how much inventory we need to carry on the FC side, etcetera. But I think it's fair to say between 30 to 40 days is comfortable.

    — Harsh Bansal

What to watch in Q1 FY27

Bokaro Phase 1 commissioning

Q1 FY27
Current On track for phased commissioning
Target Commercial operations for color coated section

Why it matters

This marks the beginning of revenue generation from the new greenfield project, crucial for the company's growth targets.

FY '26 has been a pivotal year operationally marked by strong progress on our greenfield downstream steel complex at Bokaro, which remains on track for phased commissioning starting quarter one FY '27.

Risks & concerns

  • Raw material price volatility

    medium

    Volatility in zinc, aluminum, and magnesium makes long forward orders difficult without proper hedging, exposing the company to downside risk.

    The other factor being that because some of the components are highly volatile in nature, for example zinc or aluminum or magnesium going forward, it'd be very difficult for us to take long forward orders without a proper current hedging strategy. That could expose us to substantial downside risk.

    Management acknowledged

  • Raw material constraints for TMT rolling mill

    low

    The TMT rolling mill segment faces raw material constraints on the customer side, which the company is working to resolve.

    So on the TMT rolling mill side, we have raw material constraints on the customer side. We are working with them to see how some of those things can be sorted out, what can we do in terms of enhancing our capabilities if that would help.

    Management acknowledged

  • Increased trade receivables

    low

    Significant increase in trade receivables from ~INR80 crores to ~INR150 crores was due to a timing issue with a key customer's payments, which has since been resolved.

    So, if you even look at the receivable days, I think this was all on account of one of our key customers holding back payments because of March quarter and this led to this number. We actually got the payments in early April, so it was more of a timing issue. But anyway, it got reflected in the balance sheet because it's of 31st March.

    Analyst acknowledged

Q&A highlights

5 direct
EBITDA margin stabilization and Bokaro performance Direct
One small correction, the EBITDA will stabilize at 12% to 13%, not 13% to 14%. The existing business as is we don't see any meaningful investments happening on this side as of now. So whatever benefits come will be on account of increased capacity utilization. On the Bokaro side, I think we have spoken about the capacities that are being created and that's a part of the presentation. Where over the next 12 to 15 months, as we continue to commission various parts of the project, those volumes will come in and then FY '28 we will scale up those volumes in a meaningful manner.

Clarifies the long-term EBITDA margin target and the phased ramp-up of the Bokaro project, indicating when significant volume contributions are expected.

Asked by Shlok Bhartiya

Bokaro project ramp-up and revenue expectations Partial
So, Darshil ji, we have not gone into detailed economics and projections about what kind of revenues we can expect on a breakdown manner. We've given an overall guidance in terms of up to FY '28 and I would like to stick to that. But in terms of your, part of the question of how much we are looking in terms of color coating and all that, so color coating will come online, you should have some sales in quarter one, but meaningful sales will only happen by quarter two because once we start production, we will take time to stabilize on quality, volumes, acceptability of the product, etcetera.

Management refrained from giving specific quarter-wise revenue estimates for Bokaro but confirmed color coating sales in Q1 FY27, with meaningful sales from Q2 FY27, highlighting the stabilization period.

Asked by Darshil Jhaveri

Increase in trade receivables Direct
So, if you even look at the receivable days, I think this was all on account of one of our key customers holding back payments because of March quarter and this led to this number. We actually got the payments in early April, so it was more of a timing issue. But anyway, it got reflected in the balance sheet because it's of 31st March.

Explains the significant increase in trade receivables as a temporary timing issue with a specific customer, which has since been resolved, alleviating concerns about working capital deterioration.

Asked by Bhavesh

Comparison with peer (Manaksia Color Coated) on EBITDA margins and product mix Partial
So two things, Sanketji. One, I think our business model on a blended basis is different. No, no. Please note it is the blended margin. It's the company's guidance and not the Bokaro plant's guidance. So that is one. The second is I think our capacities on a complete basis differ substantially, which allows us to maximize our efficiencies of scale.

Management clarified that their 12-13% EBITDA margin guidance is blended, not specific to the Bokaro plant, and highlighted their larger scale for efficiency, differentiating them from peers.

Asked by Sanket

Opportunity size for ZAM coated products Direct
So, if you look at the move of the industry, it's essentially towards more longevity steel coating processes, but also lighter steel and steel which provides more value for money. Because of that, you went into galvanizing, you went into high-tensile steels which provide higher strength at lower thicknesses. And similarly, if you look at ZAM, the industry is starting to move towards magnesium coated because of higher life expectancy. Now, if you look at a galvanized product, it typically has a life of about four to five years at standard coating. Now to increase the life, what Indian customers have been asking for is about 3x, 4x coating, which makes it very expensive considering zinc is currently at about INR3 lakhs, INR3.25 lakh per ton. Now, there is only so much you can do, right? Because I can't indefinitely keep coating zinc at those prices. You might as well then at some point start using zinc sheets and not steel sheets. Now to get better value for money, you start looking at other alternatives, one of which is ZAM. Zinc-Aluminium-Manganese same to same coated provide about 5x to 6x of the life of zinc. Now, if you are able to provide 5x, 6x life at same coating as zinc, there is a substantial value to be derived by the customers.

Management provided a detailed explanation of the strategic importance and market opportunity for ZAM coated products, emphasizing their superior longevity and value proposition compared to traditional galvanized products.

Asked by Rohan Baranwal

Peak debt on company level Direct
So I think once we look at the completion of and the commissioning of this project, which will be the peak debt. And we're not talking about the working capital etcetera right now, but in terms of long-term debt, we'll be at the peak by let's say in the next 12 to 15 months. INR700 crores to INR800 crores could be the numbers we work out for. Sure, sir. That's a fair assumption.

Provides an estimate for the peak long-term debt the company expects to reach (INR700-800 crores) within the next 12-15 months, offering clarity on future leverage.

Asked by Shlok Bhartiya

Revenue potential of legacy business at peak utilization Direct
I think this was a question somebody else also asked. I think it's fair to assume between INR800 crores to INR 900 crores.

Clarifies the maximum revenue potential of the existing business, providing a baseline for future growth calculations alongside the Bokaro project.

Asked by Ajit Sethi

3 min read 6 chapters

Detailed narrative

Q4 & Full Year FY26 Financial Performance

BMW Industries Ltd. concluded FY26 with its highest ever quarterly and annual profits. For Q4 FY26, the company reported an operating income of INR210 crores, with operating EBITDA at INR58 crores, translating to a robust margin of 27.5%. Profit after tax (PAT) for the quarter stood at INR33 crores, achieving a 15.4% PAT margin. For the full fiscal year, operating income reached INR665 crores, operating EBITDA was INR165 crores (24.8% margin), and PAT was INR81 crores (11.9% margin), reflecting strong operational performance and improved asset utilization.

Bokaro Greenfield Project Progress

The Bokaro greenfield downstream steel complex is on track for phased commissioning, with initial operations expected to commence in Q1 FY27. Management confirmed that saleable production of the color-coated section will begin in Q1 FY27, followed by meaningful sales contributions from Q2 FY27 after a stabilization period. The project involves an investment of approximately INR800 crores, with INR109 crores funded through internal accruals and INR143 crores via debt drawdown. The company anticipates an Internal Rate of Return (IRR) above 20% for this investment.

Capacity Utilization and Operational Efficiency

The company demonstrated strong operating momentum, particularly in its downstream businesses. CRM complex production increased to ~718,000 metric tons, with annualized utilization improving to 70.9% from 66.9% in December. The pipes and tubes segment also saw healthy production growth, reaching 201,000 metric tons from ~177,000 metric tons in FY25. Management expects the tubes division's utilization to improve significantly from the current 33-34% to 60-65% over the next 2-3 years, contributing to enhanced operational efficiencies.

Strategic Growth and Margin Guidance

BMW Industries reiterated its guidance for a Compound Annual Growth Rate (CAGR) of approximately 75% for revenue, 45% for operating EBITDA, and 40% for PAT over the FY25-FY28 period. The company expects EBITDA margins to stabilize at 12-13% and PAT margins at 5-6% by FY28, driven by integration benefits and operating leverage from the Bokaro project. The base case for investment IRR is above 20%, and the blended Return on Capital Employed (ROCE) is targeted to reach 15% plus.

Capital Structure and Shareholder Returns

Net debt for the year stood at INR364 crores, resulting in a net debt to equity ratio of 0.45x. Excluding borrowings for the Bokaro project, the ratio was 0.27x. The company's total debt is approximately INR370 crores, with INR135 crores being short-term borrowings. Management anticipates peak long-term debt to be in the range of INR700-800 crores within the next 12-15 months. The Board recommended a final dividend of INR0.43 per share, representing a 12% payout ratio, reinforcing commitment to shareholder returns.

Product Strategy: ZAM Coated Products

The company highlighted a significant opportunity in Zinc-Aluminum-Manganese (ZAM) coated products, which offer 5-6 times the life expectancy of traditional galvanized products. This aligns with the industry trend towards more durable and value-for-money steel coating processes. While there is currently limited supply, BMW Industries aims to capitalize on the growing demand from sectors like solar, where long-term guarantees necessitate superior product longevity. The company expects to be a key player in developing this market.

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