BLEL — Q1 FY27 earnings call

Call held 8 Sep 2026

Management summary

Behari Lal Engineering (BLEL) reported a strong Q1 FY27, with revenue growing 18% YoY to INR151.7 crores and PAT up 24.5% to INR19.2 crores, driven by a continued shift towards high-value products which now comprise 60.4% of revenue. The company maintained high capacity utilization and a near debt-free balance sheet. BLEL is investing INR80 crores in capex for FY27, including Unit 3 for high-value centrifugal casting, and is actively expanding into the defense sector with revenue expected from FY28.

Highlights

  • Revenue from operations grew 18% YoY to INR151.7 crores.

  • Operating EBITDA (excl. other income) increased 20.6% YoY to INR27.6 crores, with margin expanding 39 bps to 18.2%.

  • PAT grew 24.5% YoY to INR19.2 crores, with margin expanding 65 bps to 12.7%.

  • High-value products share in revenue increased to 60.4% in Q1 FY27 from 55.7% a year ago, driving margin expansion.

  • Capacity utilization remained high at 90.5% overall, with melt shop at 94%.

  • Debt-to-equity ratio was very low at 0.03x, with INR52 crores cash on balance sheet (pre-IPO).

Concerns

  • Total volume decreased 2% QoQ, although own manufacture tonnage rose 12% QoQ.

  • Q1 PAT and EBITDA were sequentially lower than Q4 FY26 due to one-time state incentives recognized in Q4 FY26.

Key financials

  1. Revenue from Operations ₹151.7 Cr +18%YoY
  2. Operating EBITDA (excl. other income) ₹27.6 Cr +20.6%YoY
  3. Operating EBITDA Margin (excl. other income) 18.2%
  4. PAT ₹19.2 Cr +24.5%YoY
  5. PAT Margin 12.7%
  6. EPS (post-IPO) ₹4.54

What they filed

₹ Cr · quarterly
Line itemQ1 FY26Q4 FY26Q1 FY27
Revenue128 131 152
EBITDA23 23 28
Net profit15 21 19
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

₹162 Cr

as of 2026-06-30 quantified

Execution

more than one quarter of revenue

The order book is skewed towards high-value products, indicating future revenue will also be high-value.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹5 Cr this quarter · ₹80 Cr (FY27) planned Unit 3 and solar power plant from internal accruals; equipment, civil work, rooftop solar, small debt repayment, and general corporate purposes from IPO fresh capital of INR93 crores.
    • Equipment and civil work for both facilities (part of IPO proceeds) ₹56 Cr
    • Rooftop solar (part of IPO proceeds) ₹7 Cr
    • Unit 3 construction (from internal accruals)
    • Solar power plant (from internal accruals)
    Of the INR301 crores, INR93 crores was fresh capital. INR56 crores go into equipment and civil work at both facilities. About INR7 crores will go into rooftop solar, a small debt repayment, and approximately INR19 crores for general corporate purposes. So, what we are targeting is that we will spend around INR80 crores in capex in the current year.
  • Debt Gross ₹11 Cr · Net cash ₹41 Cr
    • Repayment Small debt repayment from IPO proceeds
    Gross borrowing INR11 crores, all working capital lines, cash and bank balances INR52 crores, largely fixed deposits, debt to equity 0.03x
  • Liquidity Cash ₹52 Cr IPO fresh proceeds of INR93 crores received in August, utilized GCP amount towards working capital, balance yet to be deployed.
    cash and bank balances INR52 crores, largely fixed deposits... So, we have received fresh proceeds of INR93 crores in August. So, currently, just 15 days have passed, so we have utilized the GCP amount towards the working capital, and balance is yet to be deployed.

Guidance & targets

Product Mix

  • High-value products share Product Mix · near future · Medium confidence 70%
    What we are targeting is that in the near future, we'll be able to reach to around 70% of high-value products.

    — Aakarsh Goyal

Profitability

  • Operating EBITDA margin growth Profitability · next 2-3 years · Medium confidence 20-25%
    To our operating EBITDA margin is around 25% in the previous financial years and what we expect is, in future also, it will grow by 20% to 25% over the next two to three years.

    — Aakarsh Goyal

Capacity

  • Unit 3 commissioning Capacity · Q1 FY28 · High confidence Q1 FY28
    So, what we are expecting is that in the first quarter of the next financial year, we'll be able to commence Unit 3.

    — Aakarsh Goyal

Capex

  • Total Capex Capex · FY27 · High confidence INR80 crores
    So, what we are targeting is that we will spend around INR80 crores in capex in the current year.

    — Aakarsh Goyal

Revenue

  • Defense sector revenue contribution Revenue · FY28 · Medium confidence good numbers
    From the next financial year, we are targeting to have good numbers from the defense sector.

    — Aakarsh Goyal

Working Capital

  • Cash conversion cycle Working Capital · ongoing · Medium confidence 90-100 days
    Our intention is to hold the days to the lowest possible, and we estimate that we'll hold it to around 90 to 100 days.

    — Aakarsh Goyal

What to watch in Q2 FY27

FY27 Capex Spend

Next quarter
Current INR5 crores spent in Q1 FY27
Target Progress towards INR80 crores total for FY27

Why it matters

To track the company's investment in capacity expansion and strategic initiatives.

Out of the INR80 crores, INR5 crores was spent in the first quarter and the balance INR75 crores, we are targeting the next three quarters.

Q&A highlights

4 direct
Growth Drivers with High Capacity Utilization Direct
Basically, our plant, since the inception of our plant, we have been running the plant at full capacity utilization. That is the major agenda behind our growth, and that is what makes us different. What we do is we have a unique product mix. We are the only ones in the country who are having these three products that we're making in the same plant.

Analyst questioned how growth would be sustained given high capacity utilization, and management clarified the strategy of product mix optimization and periodic capacity additions.

Asked by Deepak Poddar

Unit 3 Capex and Commissioning Timeline Partial
So, what we are expecting is that in the first quarter of the next financial year, we'll be able to commence Unit 3. Currently, the shed is under construction, and we have ordered most of the machinery.

Analyst sought specific details on Unit 3's capex and timeline, which management provided for commissioning but deferred on exact capex figures.

Asked by Deepak Poddar

Defense Sector Entry and Revenue Timeline Direct
In that line, we have been working from past few years, and now we are lucky enough to start getting orders from major government PSUs like Bharat Dynamics Limited, Nuclear Power Corporation of India... Proper revenue is expected to start by next year.

Analyst inquired about the new defense vertical, and management provided context on progress, customer engagement, and the expected timeline for significant revenue contribution.

Asked by Deepak Poddar

Centrifugal Casting and Import Substitution Strategy Direct
Yes. In our Unit 3, we are going for the centrifugal casting, where we'll be making the ICDP rolls, which are called indefinite double poured chilled iron rolls. These rolls are currently mostly imported from other countries.

Analyst sought details on a key new product line, and management elaborated on its strategic importance for import substitution and market share.

Asked by Vatsal Mehta

Operating EBITDA Margin Trajectory Direct
To our operating EBITDA margin is around 25% in the previous financial years and what we expect is, in future also, it will grow by 20% to 25% over the next two to three years.

Analyst probed for future margin targets, and management provided a clear growth expectation for operating EBITDA margin over the medium term.

Asked by Shweta Dikshit

3 min read 6 chapters

Detailed narrative

Strong Q1 FY27 Performance Driven by Product Mix Shift

Behari Lal Engineering reported robust Q1 FY27 results, with revenue from operations growing 18% year-on-year to INR151.7 crores. This growth was primarily fueled by a strategic shift towards high-value products, which now constitute 60.4% of total revenue, up from 55.7% a year ago. Operating EBITDA (excluding other income) increased 20.6% to INR27.6 crores, with the margin expanding by 39 basis points to 18.2%, reflecting the richer product mix and stable scrap prices. PAT also saw a significant increase of 24.5% YoY to INR19.2 crores, with PAT margin expanding 65 bps to 12.7%.

Strategic Capacity Expansion with Unit 3 and FY27 Capex Plan

Despite high capacity utilization of 90.5% in Q1 FY27, BLEL is actively expanding its manufacturing capabilities. The company is targeting a total capex of INR80 crores for FY27, with INR5 crores already spent in Q1. A significant part of this investment is Unit 3, currently under construction, which will focus on high-value centrifugal casting for ICDP rolls, a product segment largely imported into India. Unit 3 is expected to commence production in Q1 FY28, funded primarily through internal accruals, alongside other upgrades and a solar power plant.

Entry into Defense Sector and Import Substitution

BLEL is making strategic inroads into the defense and aerospace sectors, having secured orders from major PSUs like Bharat Dynamics Limited and NPCIL. Management highlighted their focus on import substitution and 'Make in India' initiatives, aligning future capex to meet defense sector requirements. While a small portion of revenue is already in the prototyping stage, significant revenue contribution from this segment is anticipated to begin from FY28 due to the long approval and production cycles involved in defense projects.

Conservative Financials and IPO Proceeds Utilization

The company maintains a conservative balance sheet, with a pre-IPO debt-to-equity ratio of 0.03x and INR52 crores in cash as of June 30, 2026. Following its recent IPO, BLEL raised INR301 crores, with INR93 crores as fresh capital. These proceeds are earmarked for equipment and civil work (INR56 crores), rooftop solar (INR7 crores), a small debt repayment, and general corporate purposes (INR19 crores), reinforcing the company's growth trajectory through internal accruals and minimal debt.

Product Mix Optimization Driving Future Profitability

Management emphasized that the core strategy is to continuously optimize the product mix towards higher-value items like rolls, castings, and specialty alloy grades, rather than chasing tonnage. This strategy has already improved gross margin by 146 basis points to 48.9% and PAT margin by 65 basis points to 12.7% in Q1 FY27. The company aims to further increase the high-value product share to approximately 70% in the near future, which is expected to drive operating EBITDA margin growth of 20-25% over the next 2-3 years.

Customer Base and Export Performance

BLEL serves a diversified customer base of 1,871 customers as of June 30th, including major steel players and equipment OEMs. The company's export revenues constituted 5.7% of total revenue in Q1 FY27, amounting to INR8.6 crores, serving 21 countries across five continents. Management noted that while Q1 exports were lower than the previous year, this was due to timing of casting shipments and order phasing, not a change in the overall positive trend for exports.

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