Sealmatic India — Q4 FY25 earnings call

Call held 9 Jun 2025

Management summary

Sealmatic India delivered a robust financial performance in FY25, with sales turnover growing 42.1% to INR101 crores and PBT increasing 57% to INR21.27 crores. PAT and EPS both surged by 61%, supported by a 25% organic order intake growth. While the company is expanding its global footprint and capacity, management foresees potential margin pressure over the next two years and acknowledges high working capital until a higher revenue threshold is met.

Highlights

  • Sales turnover in FY25 of INR101 crores, up 42.1% YoY compared to INR71 crores in FY24.

  • PBT increased by 57% to INR21.27 crores, representing 20% of total turnover.

  • PAT and EPS both saw a significant increase of 61% YoY.

  • EBITDA grew by 11% to INR24.84 crores, with an EBITDA margin of 24.18% for FY25.

  • Net worth increased by 17% to INR102 crores, demonstrating financial strength.

  • Achieved a 25% year-on-year organic order intake growth for FY25.

Concerns

  • Anticipated margin pressure for the next 2 years due to new project bidding and strategic investments.

  • Working capital and inventory levels are expected to remain high until turnover exceeds INR200 crores.

  • A slight slack is observed in the Indian project industry currently.

Key financials

  1. Sales Turnover ₹101 Cr +42.1%YoY
  2. PBT ₹21.27 Cr +57%YoY
  3. EBITDA ₹24.84 Cr
  4. EBITDA Margin 24.2% +11%YoY
  5. PAT Growth 61%
  6. EPS Growth 61%
  7. Net Worth ₹102 Cr +17%YoY

What they filed

Q4 FY26: revenue up 44.1%, net profit up 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue26 33 37 34 44 +69%57 +73%54 +46%49 +44%
EBITDA8 7 9 5 9 +13%14 +100%9 +0%6 +20%
Net profit5 6 7 3 6 +20%9 +50%6 −14%4 +33%
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

high confidence

Composition

Mix 8 geographies
  • Domestic Sales 38%
  • Export Sales 62%
  • Europe (Export) 26%
  • USA (Export) 9.9%
  • South America (Export) 1.9%
  • Middle East (Export) 2.5%
  • Russia (Export) 10.5%
  • Rest of World (Export) 11.8%

Share of order book by geography· categories overlap, and sum to 162.6%

Pipeline

other

The company is actively driving penetration in various markets to establish itself as a global player.

Management highlighted strong organic order intake growth for FY25 and detailed the geographic breakdown of sales, emphasizing expansion in key international markets.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    Umar A.K. Balwa: "But the majority of capex has been taken care of, and I don't see much big investment at the moment happening."

Guidance & targets

Revenue

  • Year-on-year Revenue Growth Revenue · current financial year and for the years to come · High confidence 15% to 20%
    I'll still repeat my answer that we are looking at a growth of 15% to 20% every year year-on-year. So that's the growth that we're looking at for the current financial year and for the years to come.

    — Umar A.K. Balwa

  • Mid-term Revenue Target Revenue · by 2028, 2029 · Medium confidence INR225 crores
    See, on middle term say by 2028, 2029, I would be happy to cross INR225 crores.

    — Umar A.K. Balwa

Market Share

  • New Market Share in India (API segment) Market Share · ongoing · High confidence 15%
    Yes, absolutely. What I'll again reiterate for everybody who's on the call that what I mentioned earlier, and I'll reiterate now that any new pump in the API segment, which is oil and gas, refinery, petrochemical and power plants, any new pump being manufactured we'll have a Sealmatic mechanical seal fitted in that pump. And in that market, we are targeting a share of 15%.

    — Umar A.K. Balwa

What to watch in Q1 FY26

UAE Service Center Operational Status

July 2025
Current Yet to start operations
Target Up and running

Why it matters

The commencement of UAE service center operations is a key step in expanding the company's global footprint and service revenue capabilities.

Umar A.K. Balwa: "We are yet to start operations in Abu Dhabi. So that would be up and running in July 2025."

Risks & concerns

  • Margin Pressure from New Projects

    medium

    Management expects margin pressure for the next 2 years due to strategic bidding on new projects to secure long-term value.

    Management acknowledged

  • High Working Capital and Inventory

    medium

    Working capital and inventory levels are high and are expected to remain so until the company's turnover crosses INR200 crores.

    Both acknowledged

  • Slack in Indian Project Industry

    low

    A slight slowdown is currently observed in the Indian project industry, though this is offset by strong international demand.

    Management acknowledged

Q&A highlights

8 direct
Breakdown of new seals vs. replacement seals (recurring revenue) Direct
Yes. As I mentioned in the last earnings call, our majority is totally new seals at the moment. So, we are yet to see the commissioning and installation happening, which will happen in FY '27.

Clarifies the current revenue mix is predominantly new seals, with recurring replacement revenue expected to materialize from FY27.

Asked by Arnab Bhattacharjee

Timeline and revenue generation from UAE service center operations Direct
We are yet to start operations in Abu Dhabi. So that would be up and running in July 2025. So, there are no numbers to give at the moment.

Provides a clear timeline for the commencement of operations and potential revenue contribution from the new UAE service center.

Asked by Hardik Gandhi

Capacity expansion, utilization ramp-up, and peak capacity Direct
The new unit which has come up in Kaman will add 6% to the production capacity... our maximum utilization of any capacity would be a good 80%... By this calendar year-end December 2025, we would be seeing a peak in our capacities.

Details the impact of new capacity, expected utilization limits, and the timeline for reaching peak operational capacity.

Asked by Hardik Gandhi

Impact of imported raw materials on supply chain issues Direct
I mean not in the moment and despite the challenging years that went by and the geopolitical situation that we are all witnessing, nothing has changed for us. So, our supply chain is intact, and I don't see any kind of disruption happening in that direction.

Reassures investors about the stability of the supply chain despite reliance on imported raw materials and global geopolitical events.

Asked by Hardik Gandhi

Reasons for anticipated margin pressure Direct
There would be a pressure on the margin. It all depends how much new project that we want to take while bidding money on getting those projects in the kitty over here... for the next 2 years, we will see a pressure on the margins.

Explains the strategic rationale behind potential short-term margin compression, linking it to investment in new projects for long-term value.

Asked by Hardik Gandhi

Opportunities in the nuclear sector Direct
Similar activity is happening here in India when we talk about expansion in the nuclear power sector. So, we are well placed, and I see a great demand... Also surprisingly, the UAE government has installed a brand-new department for only nuclear energy. So, there's a lot of traction happening in that direction.

Highlights a significant and growing market segment with long-term potential for Sealmatic's products, driven by global and regional government initiatives.

Asked by Hardik Gandhi

High working capital (inventory and debtors) and its sustainability Direct
I mean the nature of the business is such that the working capital and the inventory is going to remain high, till we don't achieve that turnover of INR200 plus crores.

Provides clarity on the structural reasons for high working capital and the revenue threshold required for its improvement.

Asked by S. Venkatesh

Contribution of service revenue to total turnover Direct
None... the revenue for spare part business will start FY '27.

Clarifies that service revenue is currently negligible but is a planned future revenue stream from FY27, indicating a shift towards more recurring income.

Asked by Shantanu Naik

2 min read 5 chapters

Detailed narrative

Financial Performance FY25 Highlights

Sealmatic India reported a strong financial year 2025, with sales turnover reaching INR101 crores, a significant increase of 42.1% compared to INR71 crores in FY24. Profit before tax (PBT) surged by 57% to INR21.27 crores, representing 20% of the total turnover. The company's EBITDA for FY25 was INR24.84 crores, achieving a 24.18% margin, which is an 11% improvement over the previous year's 21.77% EBITDA margin. Both PAT and EPS also saw substantial growth of 61% year-on-year, and the net worth increased by 17% to INR102 crores.

Market Expansion and Global Footprint

The company is actively expanding its global presence, with a joint venture in UAE, SealTech LLC, expected to be operational by July 2025 to serve major customers like ADNOC. Sealmatic is also investigating similar service center activities in Oman, Kuwait, and Qatar. Exports contributed 62% to total sales, with Europe accounting for 42% of exports, USA 16%, Russia 17%, and the Middle East 4%. The company is participating in numerous international exhibitions, including Defence Expo in Chennai, Pump Symposia in USA, and RoTIC in UAE, to drive market penetration.

Capacity and Operational Outlook

Sealmatic's new unit in Kaman is set to add 6% to its production capacity. Management anticipates reaching peak operational capacities by calendar year-end December 2025, with a maximum utilization target of 80% due to the specialized nature of its products. The company confirmed that its supply chain remains intact despite global challenges, with no disruptions expected. The majority of current sales are for new seals, with replacement business and associated commissioning expected to commence from FY27.

Strategic Focus and Future Growth Drivers

Sealmatic is committed to continuous investment in research and development to maintain its leadership in sealing technology. The company sees significant opportunities in the nuclear sector, both globally and in India, with a 'great demand' for its universal seals applicable to both compact and conventional reactors. Management aims for a 15-20% year-on-year revenue growth and targets crossing INR225 crores in turnover by 2028-2029. They are also targeting a 15% market share in the new pump segment within India.

Working Capital and Margin Outlook

Management indicated that working capital and inventory levels, currently at INR50 crores and INR25 crores respectively, will remain high due to the nature of the business until turnover exceeds INR200 crores. They anticipate margin pressure for the next two years as the company strategically bids for new, large projects, particularly in the Middle East, which may involve sacrificing short-term margins for long-term value creation. Despite a slight slack in the Indian project industry, strong international demand is expected to offset this.

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