BEW Engg

BEW Engineering reported a full-year FY25 revenue of ₹134.36 crores, an 11.26% increase year-on-year, primarily driven by strong order execution in H2 FY25, which saw revenue jump 50.83% YoY to ₹83.26 crores. However, profitability was impacted, with FY25 EBITDA margin declining to 15.18% from 19.80% in FY24, and H2 FY25 EBITDA margin dropping significantly to 11.77% from 28.48% in H2 FY24. This margin compression was attributed to raw material price fluctuations and the strategic acceptance of lower-margin orders to maintain the order book.

The company's current order book stands at a robust ₹80 crores as of March 31, 2025, with management anticipating it to grow to ₹150 crores by the end of FY26. The order book composition is dominated by Filter Dryers (70%), followed by Paddle and other Dryers (20%), and Mixers, Blenders, and other products (10%). BEW Engineering has set ambitious revenue targets of ₹175 crores for FY26 and ₹300 crores by FY27, supported by an expected EBITDA margin of 15% for FY26 and 20-22% for FY27, contingent on market stability.

BEW Engineering is nearing completion of a significant capacity expansion project, with 90% of the newly acquired neighboring land facility expected to be operational by mid-June 2025. This expansion is projected to nearly double the company's production capacity, positioning it to meet the growing demand and execute larger orders more efficiently. Management also highlighted efforts to normalize inventory cycles to around 200 days and improve working capital management through disciplined procurement.

The company observed mixed market conditions, with the global chemicals, specialty chemicals, and agrochemical sectors showing signs of volume recovery, though pricing remains subdued. Domestically, CAPEX in pharma and agro chemicals is picking up, leading to new order inflows. BEW is actively expanding its global footprint, with strong traction in Africa and new opportunities being explored in Japan, the Middle East, South Africa, Israel, and Russia, supported by participation in international exhibitions.

Working capital management is a key focus area, as evidenced by the spike in receivables to ₹40 crores (30% of sales) in H2 FY25 due to high sales in the last two months. The company also maintains high inventory levels (₹117 crores) of specialized raw materials, particularly nickel-based alloys, for anticipated orders. To strengthen its balance sheet, BEW Engineering is targeting a 20% reduction in its overall debt, aiming to enhance cash flow visibility and financial stability.

The company is exploring inorganic growth opportunities, with discussions underway regarding a potential acquisition of a process equipment company in Ankleshwar, which could add ₹50-60 crores in revenue. This strategic initiative, initially pursued by the late Chairman Mr. Prakash Lade, who passed away on December 29, 2024, is being continued by the current management, reflecting a commitment to sustained growth and expansion.