BEW Engg — Q2 FY26 earnings call

Call held 20 Nov 2025

Management summary

BEW Engineering reported strong H1 FY26 results with revenue up 70.45% YoY to ₹87.1 crores and EBITDA up 10.37% YoY to ₹11.7 crores. The new manufacturing facility is complete and expected to boost capacity and revenue. However, margins compressed to 13.43% due to product mix and raw material prices, and working capital metrics deteriorated. Management is targeting significant revenue growth for FY27 and aims to improve margins and working capital efficiency with the new capacity and diversified product portfolio.

Highlights

  • Revenue for H1 FY26 was ₹87.1 crores, a 70.45% YoY increase, driven by strong execution and improved demand.

  • EBITDA for H1 FY26 was ₹11.7 crores, up 10.37% YoY, reflecting better operating leverage and cost discipline.

  • New manufacturing facility is completed and expected to be fully operational by mid-July 2025, projected to add ₹50 crores in FY26 revenue.

  • Company re-entered reactor manufacturing and introduced continuous dryer systems, expanding addressable market.

  • Strong order book of ₹80 crores, with 70% from high-value stainless steel-based filter dryers.

Concerns

  • EBITDA margin declined to 13.43% in H1 FY26 from previous year's 15% and historical 21%, primarily due to lower nickel alloy business and price fluctuations.

  • Inventory days and receivables have increased, though management expects improvement with faster delivery times from the new plant.

  • Significant inventory of ₹20-25 crores in nickel alloy (Hastelloy) remains, with only 10-15% expected to be utilized this year, and difficulty selling at good prices in the open market.

  • New shed commissioning was delayed from March 2025 to March 2026 due to rainy season and pending amalgamation work.

Key financials

  1. Revenue ₹87.1 Cr +70.5%YoY
  2. EBITDA ₹11.7 Cr +10.4%YoY
  3. EBITDA Margin 13.4%
  4. PAT ₹6.23 Cr +3.5%YoY
  5. PAT Margin 7.2%
  6. EPS ₹4.78 +3.7%YoY

What they filed

Q4 FY26: revenue up 78.2%, net profit down 122.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue48 58 66 55 51 +6%83 +43%87 +32%98 +78%
EBITDA7 7 8 16 11 +57%10 +43%12 +50%-2 −112%
Net profit4 4 4 9 6 +50%6 +50%6 +50%-2 −122%
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

Total value

₹80 Cr

as of 2025-09-30 quantified

Execution

Most of the 90% of current orders will be executed before March 2026.

Composition

  • High-value stainless steel-based filter dryers (product) 70%

Pipeline

L1 awaiting loa

Additional bids in advanced stages

Order book remains robust, with a focus on high-value projects and strong execution expected in H2 FY26.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New manufacturing facility for capacity expansion
    • Automated cutting machine and increased machine shop capabilities
    Our new manufacturing facility, which is now completed, is expected to be fully operational by the mid of July 2025. Once commissioned, this plant will nearly double our production capacity, allow us to enhance throughput, reduce lead times and serve a broader product range. The new facility is expected to contribute around Rs. 50 crore in FY'2026, with a peak potential of Rs. 100 crore annually as utilization levels ramp up.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence ₹175 crores
    For the full year FY'2026, we remain on track to achieve our revenue add-ons of Rs. 175 crores, strong double-digit growth over FY'25 with the new facility converting from H2 onwards and order execution accelerating.

    — Rohan Prakash Lade

  • FY27 Revenue Revenue · FY27 · High confidence ₹300 crores
    Looking ahead to FY'27, we have set a revenue target of Rs. 300 crores, subjected to demand continuity and global market stability.

    — Rohan Prakash Lade

Profitability

  • Medium-term EBITDA Margin Profitability · medium term · Medium confidence 20-20%
    We are also targeting a return to the 20 – 20% EBITDA margin in the medium term.

    — Rohan Prakash Lade

  • FY27 EBITDA Margin Profitability · FY27 · Medium confidence 20% plus
    So, you are now guiding for the next year Rs. 300 crores of sales broadly and a 20% EBITDA margin. Can we take that as guidance for the next year? This is what we had mentioned in the annual report. ... See, definitely, we want to achieve around 20%.

    — Rohan Prakash Lade

Capacity

  • New facility revenue contribution Capacity · FY26 · High confidence ₹50 crores
    The new facility is expected to contribute around Rs. 50 crore in FY'2026, with a peak potential of Rs. 100 crore annually as utilization levels ramp up.

    — Rohan Prakash Lade

  • New facility peak annual revenue potential Capacity · annually (peak) · High confidence ₹100 crores

    — Rohan Prakash Lade

Production Cycle

  • Manufacturing delivery time Production Cycle · going ahead · High confidence 3-4 months

    Previously 6 months → 3-4 months

    Right now, any equipment for manufacturing takes us around five to six months. So, that will be coming down to three to four months. So, definitely, that will help us to improve our margins going ahead.

    — Rohan Prakash Lade

What to watch in Q3 FY26

New manufacturing facility operational status

Next quarter (Q3 FY26)
Current 20% operational, 100% by March 2026
Target Progress towards 100% operational, contribution to H2 FY26 revenue

Why it matters

The new facility is crucial for capacity expansion, improved margins, and achieving FY26/FY27 revenue targets.

Yes. See, already we have started around some 20% work. We already started from the new shed some two months back itself. 20% work only we have started. Because the movement is a bit difficult. There is no middle way to transfer the job from the old one to the new one. So, that is why we have started 20%. And now going ahead, in another two months, 40% to 50% will be starting up over there. I think by March, it will be 100% up running.

Risks & concerns

  • Margin compression

    high

    EBITDA margin dropped from 21% to 13.43% due to lower nickel alloy business and price fluctuations, and strategic acceptance of lower-margin orders for higher turnover.

    Both acknowledged

  • Raw material price volatility

    medium

    Fluctuations in stainless steel and nickel alloy prices impact margins, though proactive procurement helps.

    Management acknowledged

  • High nickel alloy (Hastelloy) inventory

    medium

    ₹20-25 crores of Hastelloy inventory, with only 10-15% utilization expected this year, and difficulty selling at good prices in the open market, tying up working capital.

    Management acknowledged

  • Working capital deterioration (high inventory and receivables)

    medium

    Inventory days are high due to long delivery cycles (6 months), and receivables increased at half-year end due to dispatches without immediate payment, though most are expected to clear.

    Both acknowledged

  • Delay in new manufacturing facility commissioning

    medium

    The new shed, initially expected by March 2025, is now projected to be 100% operational by March 2026 due to rainy season and pending amalgamation work.

    Both acknowledged

  • Ambitious FY27 revenue target

    medium

    Doubling revenue to ₹300 crores in FY27 is an ambitious target, dependent on market conditions and sales team effectiveness.

    Analyst acknowledged

Q&A highlights

8 direct
Margin trajectory and impact of new facility Direct
Yes, definitely. I have said that. ... No, last year, I would say there is whatever revenue we see, what we do, if you compare the last year, what we did, the margins were better. Because the last year, almost 40% of our orders were of nickel alloy steel. So, if you see the nickel alloy steel as compared to stainless steel, the nickel alloy gives you better margins and better prices also. But this year, the nickel alloy business has been a little bit on the lower side. So, because of that, the margins have reduced as compared to the last year.

Analyst challenged the margin decline and management explained it was due to product mix shift (less nickel alloy) and raw material price fluctuations, not just growth strategy.

Asked by Harshad from RoboCap

Working capital management and inventory days Direct
Yes, definitely. Inventory days, as I told you, right now, the situation was, it is taking us around six months to deliver the equipment. So, the inventory days are also on the higher side. But now, the delivery will also start coming down. So, because of that, the inventory days will also come down drastically. So, definitely, we will see a lot of improvement there also.

Addressed concerns about high inventory and receivables, linking expected improvement to the new facility's ability to speed up deliveries.

Asked by Harshad from RoboCap

Delay in new shed commissioning Direct
My question was, sir, this was supposed to be ready by March'25 and now we are in November'25, but still you are saying that it is yet to be commissioned. Why it is taking so much of time? ... See, in between, if you see this year due to the rainy season and everything, this year also lasted too long. And if you see the rainy season period, you hardly were able to work out because the shed has to be constructed. Unless and until the sheds are not constructed, you cannot carry out the rest of the work or the concrete work also. So, because of four, five months in that, the work has been slowed down over there. That is why it got stretched out.

Analyst questioned the significant delay in the new facility, and management attributed it to the prolonged rainy season and phased construction.

Asked by Manoj Shetty

Utilization of nickel alloy inventory Direct
So, I think we had around Rs. 20 crores or Rs. 21 crores of that, right? ... Yes, around 20 to 25, somewhere in between, we had that. ... See, we did utilize some of it in the past year also. Not more of it, but a little bit we are going to utilize. And this year also, we would be able to utilize somewhere around 10% to 15% we are going to utilize in this year as well.

Highlighted a significant inventory of high-value raw material (Hastelloy) that is not being fully utilized, posing a working capital concern.

Asked by Manoj Shetty

Ambitious FY27 revenue target of ₹300 crores Direct
So, please tell us, of course, it also depends on the market conditions and so on and so forth. But is it possible to tell us based on whatever the feedback you have received from your customers, you know, based on their Capex projections and all, how much is practically possible in FY'27, both the revenue as well as the EBITDA? ... See, I will not be able to comment exactly with figures on what revenue and what EBITDA we will be able to achieve by the FY'27. But yes, the target we have set is based on whatever we have seen the scenarios in last four, five years, how the market has gone up, how the projects have come up.

Analyst questioned the feasibility of doubling revenue in one year, and management explained it's based on market trends and past growth, but acknowledged market dependency.

Asked by Manoj Shetty

Need for equity dilution for working capital Direct
Okay. Sir, now this whatever 250, 300 you want to achieve next year, do you have to rise or do you have to take more debt for the working capital or is there any plans to rise, do the equity dilution since this Rs. 20 crores of raw material is laying idle at our plate. So, do you have to look for any of these options to raise money to meet your working capital or for any other purpose? ... Yes, definitely, we are thinking of raising again, going ahead. Because if we want to achieve those targets, definitely, we will have to again do some dilutions and raise equities as required going ahead.

Management indicated potential need for equity dilution to fund working capital and achieve growth targets, which is a key capital allocation signal.

Asked by Manoj Shetty

Mainboard listing and quarterly results Direct
The second question is, can we not work at a mainboard migration? We already three plus years, we have satisfied all the terms which are needed for mainboard migration. So can we not look at migrating to the mainboard? And can we not look at giving results every quarter instead of every six months, so that we have a better, the investors have a better feel of the company. ... No, definitely we are looking forward to migrate to the mainboard also. So hopefully we will be that, I think before the end of financial year.

Analyst pushed for mainboard migration and quarterly reporting for better investor visibility, which management confirmed is a goal before year-end.

Asked by Keshav from BHS Securities

Market size for process equipment Direct
Just sir I wanted to know about how big the market is for the other product, you just informed me, it is about Rs. 1000 crores or Rs. 2000 crores? ... I would say process equipments, I would only comment on those equipments, not on the glass lining part. Process equipments, I feel it is somewhat around Rs, 1000 crore to Rs. 1500 crores market, not more than that.

Provided an estimate of the total addressable market size for their core process equipment business, indicating significant headroom for growth.

Asked by Darshan Chandra

3 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

BEW Engineering reported a robust H1 FY26 with revenue from operations at ₹87.1 crores, marking a significant 70.45% year-on-year increase from ₹51.1 crores in H1 FY25. This growth was attributed to strong order execution, improved demand from key sectors like pharmaceuticals and specialty chemicals, and better capacity utilization. EBITDA for the period stood at ₹11.7 crores, a 10.37% increase from ₹10.6 crores in H1 FY25, reflecting better operating leverage. However, the EBITDA margin compressed to 13.43% from 15% in FY25, and a historical 21%, primarily due to a shift in product mix away from higher-margin nickel alloy orders and raw material price fluctuations. Profit after tax (PAT) was ₹6.23 crores, a modest 3.48% YoY increase, resulting in a PAT margin of 7.15% and EPS of ₹4.78.

Capacity Expansion and Operational Developments

The company's new manufacturing facility is now completed and expected to be fully operational by mid-July 2025. This expansion is projected to nearly double production capacity, contribute ₹50 crores to FY26 revenue, and has a peak annual potential of ₹100 crores. The new facility aims to enhance throughput, reduce lead times from six months to three-four months, and serve a broader product range. BEW has also re-entered reactor manufacturing and introduced continuous dryer systems, expanding its addressable market in the pharmaceutical and specialty chemical sectors. The company is also investing in an automated cutting machine and increasing machine shop capabilities to improve product quality and efficiency.

Order Book and Execution Strategy

BEW Engineering maintains a robust order book of approximately ₹80 crores, with an additional ₹15-20 crores in advanced bids. High-value stainless steel-based equipment, particularly filter dryers, constitute roughly 70% of ongoing projects. Management expects to execute most of the current order book (90%) before March 2026. The company is strategically balancing growth and margin optimization, accepting some lower-margin orders to secure higher turnover, while maintaining a minimum margin benchmark. The improved execution pace from the new facility is expected to enhance margins by reducing delivery times.

Working Capital and Inventory Management

The company noted an increase in inventory days and receivables. High inventory was attributed to the longer six-month delivery cycles, which necessitated holding more stock. Receivables also increased at the half-year end due to dispatching equipment to regular customers without waiting for full payments. However, management anticipates a drastic reduction in inventory days and improved receivables as the new facility enables faster deliveries (3-4 months), allowing for earlier payment requests from customers. Some large corporate customers still have 90-day payment terms.

Market Dynamics and Future Outlook

The demand environment remains encouraging, with a pickup in capital expenditure from the farm and agrochemical sectors, both domestically and globally. Post-pandemic normalization and capacity modernization are driving healthy inquiry flows. BEW holds an estimated 40% market share in its core segment. The company is targeting a revenue of ₹175 crores for FY26 and an ambitious ₹300 crores for FY27, with a medium-term EBITDA margin target of 20%. This growth is expected to be driven by expanded manufacturing, a differentiated product portfolio, and continued export expansion into new geographies like Japan, Russia, and Africa. The total addressable market for process equipment is estimated at ₹1,000-1,500 crores.

Capital Allocation and Funding Plans

To support its ambitious growth targets, BEW Engineering is considering raising additional equity. This is deemed necessary to fund the increased working capital requirements associated with higher turnover and to achieve the FY27 revenue target of ₹300 crores. The company also has a significant inventory of ₹20-25 crores in nickel alloy (Hastelloy), of which only 10-15% is expected to be utilized this year. Selling this excess inventory in the open market is challenging due to lower price offers from stockists.

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