BEW Engg

BEW Engineering reported a strong revenue performance for the full year FY26, with sales reaching INR 185.54 crores, marking a 38% year-on-year increase from INR 134.36 crores in FY25. For the second half of FY26, revenue stood at INR 98.44 crores, an 18.21% increase compared to INR 83.26 crores in H2 FY25. Despite this robust top-line growth, profitability was significantly impacted, with FY26 EBITDA at INR 9.61 crores and PAT at INR 3.78 crores, resulting in an EBITDA margin of 5.18%.

The company experienced a challenging year from a margin perspective due to sharp volatility in stainless steel, Hastelloy, and other special metal prices. Management noted that the sudden increase in raw metal costs, combined with longer execution cycles, directly impacted profitability. To maintain sales and market positioning amidst heavy competition, the company had to accept lower margins, particularly in Q4 FY26, and expects similar pressures in Q1 FY27.

BEW Engineering has completed its capacity expansion, with its net block increasing from INR 12 crores to INR 60 crores, primarily through the amalgamation of a neighboring land plot. The new facility is currently operating at approximately 50% utilization, with full utilization expected within the next three to four months. This expanded capacity is projected to enable the company to achieve an optimum revenue of INR 300 crores, a target they are actively working towards for FY27.

As of March 31, 2026, the company's confirmed order book stood at INR 65 crores, providing good short-term visibility with an execution period of 4-6 months. Additionally, BEW Engineering has a robust pipeline of approximately INR 200 crores, from which they expect at least a 50% conversion rate. Management noted a recent increase in order closures as customers, concerned about rising prices, are expediting their purchasing decisions.

To address operational bottlenecks and improve profitability, BEW Engineering has initiated several strategic initiatives. These include the implementation of SAP Business One and engaging a consulting firm with over 200 years of experience. These efforts aim to enhance production planning, inventory control, execution monitoring, and overall operational efficiencies, with a specific goal of reducing delivery cycles from 6 months to 4 months, and 4 months to 3 months.

While exports were lower in FY26 compared to previous years due to the absence of very large orders from specific regions, BEW Engineering is intensifying its focus on international markets. The company has signed an NDA with a Japanese customer and is in talks with clients in the USA for continuous manufacturing orders. Management anticipates significant announcements regarding export orders in FY27, which are expected to contribute to higher-margin business.

The company's working capital was impacted by higher receivable days and reliance on trade payables, largely due to long project cycles. Management indicated that long-term borrowings have been reduced. The current cost of borrowing is between 9.5% and 9.75%. While not actively seeking new debt for general purposes, the company may raise an additional INR 15-20 crores in short-term debt if specific projects require additional working capital, leveraging its low current borrowing levels.