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BMW INDUSTRIES LIMITED — Q1 FY26 earnings call

Call held 29 Jul 2025

Company page: BMW INDUSTRIES share price, financials & guidance record

Management summary

BMW Industries reported a challenging Q1 FY26 with revenue and margin declines primarily due to temporary customer shutdowns, which management views as a one-off event. Despite short-term pressures, the company remains optimistic about its long-term growth trajectory, driven by the Bokaro Greenfield project, which is on track for revenue generation by Q4 FY26. Significant capacity expansion in tube manufacturing was achieved, and the company provided robust multi-year guidance for revenue, EBITDA, and PAT growth.

Highlights

  • Commissioned two additional tube mills and a 1.28-megawatt rooftop solar installation.

  • Tube manufacturing capacity increased by 60,000 MTPA, bringing total to ~600,000 MTPA.

  • Bokaro Greenfield project on track to commence revenue generation from color-coated sheet plant by Q4 FY26.

  • Anticipate consolidated revenue CAGR of ~75% and Operating EBITDA CAGR of 45% over the next 3 fiscals.

  • PAT expected to grow at a robust 40% CAGR over the next 3 years with PAT margin stabilizing at ~5% by FY28.

Concerns

  • Revenue for Q1 FY26 declined 5.4% sequentially and 14.4% year-on-year to ₹148.7 crores.

  • Operating EBITDA margin contracted to 21.2% from 24.4% in Q1 FY25 (326 bps YoY decline).

  • Net debt increased from ₹120 crores at March 25 to ₹160 crores by June 25.

Key financials

  1. Revenue ₹148.7 Cr -14.4%YoY
  2. Operating EBITDA Margin 21.2%
  3. PAT ₹15.2 Cr
  4. PAT Margin 9.9%

What they filed

Q1 FY27: revenue up 11.4%, net profit up 26.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue150 148 157 149 145 −3%162 +9%210 +34%166 +11%
EBITDA35 36 34 31 37 +6%39 +8%58 +71%34 +10%
Net profit18 17 18 15 15 −17%18 +6%33 +83%19 +27%
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

₹2,065 Cr

as of 2025-06-30 quantified

Composition

  • Tata Steel (Tubes division) (client type) ₹365 Cr 17.7%
  • CGL-3 (Tata Steel) (product) ₹1,700 Cr 82.3%
The company has two major orders from Tata Steel totaling approximately Rs. 2,000 crores, with some smaller orders in addition.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹803 Cr blend of new debt and cash flows from new revenue and margins
    • Bokaro Greenfield project for PLI-approved speciality steel products (coated, alloy, non-alloy coated, GI, Galvalume, ZAM) ₹803 Cr
    Harsh Bansal: 'the total CAPEX includes the entire Rs. 803 crores that we have invested, that we plan to invest in Bokaro.' Darshil Jhaveri: 'major CAPEX is now going to be funded by debt, right, it is going to hit in a phased manner as we commercialize the plant, right?' Harsh Bansal: 'The idea was also, Darshil ji that as we continue to execute and draw down on the debt, we will also start cash flows and be able to kind of service part of it. So, there will be a blend of new debt, but also new revenue and new margins that come into the picture.'
  • Debt Net ₹160 Cr
    Parth Patel: 'the net debt has increased from Rs. 12,000 lakhs at March 25 to Rs. 16,000 lakhs by June 25.'

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · next 3 fiscals · High confidence approximately 75%
    over the next 3 fiscals, we anticipate consolidated revenue to grow at a CAGR of approximately 75% driven by the phased commissioning of Bokaro Greenfield project and our organic growth.

    — Harsh Bansal

Profitability

  • Operating EBITDA Growth Profitability · next 3 fiscals · High confidence 45%
    Operating EBITDA is expected to grow at a CAGR of 45% over the same period with the operating EBITDA margin stabilizing at about 11% by FY '28 as we progressively integrate the new and existing business lines.

    — Harsh Bansal

  • PAT Growth Profitability · next 3 years · High confidence 40%
    PAT is expected to grow at a robust 40% CAGR over the next 3 years with a PAT margin expected to stabilize at about 5% by FY '28 resulting in a return on capital employed of over 18%.

    — Harsh Bansal

Margin

  • Operating EBITDA Margin Margin · by FY '28 · High confidence about 11%
    operating EBITDA margin stabilizing at about 11% by FY '28 as we progressively integrate the new and existing business lines.

    — Harsh Bansal

  • PAT Margin Margin · by FY '28 · High confidence about 5%
    PAT is expected to grow at a robust 40% CAGR over the next 3 years with a PAT margin expected to stabilize at about 5% by FY '28 resulting in a return on capital employed of over 18%.

    — Harsh Bansal

Return on Capital

  • Return on Capital Employed Return on Capital · by FY '28 · High confidence over 18%
    PAT is expected to grow at a robust 40% CAGR over the next 3 years with a PAT margin expected to stabilize at about 5% by FY '28 resulting in a return on capital employed of over 18%.

    — Harsh Bansal

Project Timeline

  • Bokaro Color-Coated Sheet Plant Revenue Generation Project Timeline · Q4 FY '26 · High confidence commence
    we remain on track to commence revenue generation from the color-coated sheet plant by quarter 4 FY '26.

    — Harsh Bansal

Capacity

  • Tube Manufacturing Capacity Increase Capacity · current · High confidence 60,000 MTPA
    These developments have increased our tube manufacturing capacity by 60,000 metric tons per annum, bringing our total to approximately 600,000 metric tons per annum across all our units.

    — Harsh Bansal

  • Total Tube Manufacturing Capacity Capacity · current · High confidence approximately 600,000 MTPA

    — Harsh Bansal

What to watch in Q2 FY26

Bokaro Color-Coated Sheet Plant Revenue Commencement

Q4 FY26
Current On track for Q4 FY26
Target Commencement of revenue generation

Why it matters

This project is a key growth catalyst and crucial for achieving long-term revenue targets.

we remain on track to commence revenue generation from the color-coated sheet plant by quarter 4 FY '26.

Risks & concerns

  • Temporary customer shutdowns impacting volumes and margins

    medium

    Q1 FY26 revenue and EBITDA margin decline attributed to an 'unusual' and 'one-off' shutdown by key customers, not expected to repeat.

    Management downplayed

  • Customer concentration (Tata Steel for major orders)

    medium

    Management acknowledges concentration but plans to diversify customer base and geographical reach through the Bokaro project and pan-India distribution.

    Analyst addressing

  • Rising net debt due to Capex

    low

    Net debt increased from ₹120 crores to ₹160 crores; management aims to keep peak debt-to-equity below 2:1 and fund through debt and internal accruals without equity dilution.

    Analyst managing

Q&A highlights

7 direct
Order Book Clarification (Tata Steel Contracts) Direct
Bhavesh, it is the same. One was a work order and then the contract was officially given. So, we disclosed both. ... Yes, that is for the CGL-3. That is right. ... These are the two major ones. Outside of this, we have some smaller orders.

Clarified that two reported work orders for Rs. 365 crores were for the same contract from Tata Steel Tubes, and confirmed an additional Rs. 1700 crore contract for CGL-3, establishing the major order book value.

Asked by Bhavesh

Pipes and Tubes Business Performance and Outlook Direct
For us, it is a conversion business. And the numbers are there in the part of the presentation. So, beyond that, there is not much that I can say, right? ... Of course, because that is the reason why we continue to invest in our capacity expansion for Pipes and Tubes. Because that is one segment where we are very optimistic about.

Addressed concerns about revenue decline in Q1 and reaffirmed optimism and continued investment in the Pipes and Tubes segment, which is a conversion business for the company.

Asked by Bhavesh

PLI Scheme Eligibility and Bokaro Capex Direct
for coated products, alloy, non-alloy coated products are PLIs approved, as well as for GI and Galvalume and ZAM, the total CAPEX includes the entire Rs. 803 crores that we have invested, that we plan to invest in Bokaro.

Provided specific details on the types of products from the Bokaro facility eligible under the PLI scheme and confirmed that the entire Rs. 803 crores Capex for Bokaro is under PLI specifications.

Asked by Mayank Jamb

Bokaro Revenue and Utilization Timeline Partial
We expect the revenues to start in Q4 FY '26. I won't put a very high number expectation over there because it will also go through all the ramping up and everything. I think we will start to get a better sense of revenue and capacity utilization by early FY '27. ... Current year, we have actually not put any targets. So, whatever we get, we will treat that as a bonus.

Clarified the expected start of revenue generation from Bokaro's color-coated steel segment (Q4 FY26) but indicated that meaningful utilization levels and specific targets would only be clearer by early FY27, suggesting a gradual ramp-up.

Asked by Mayank Jamb

Q1 Performance and Future Headwinds Direct
A lot of these businesses are dependent on how the customer facilities operate. And this is probably the most unusual kind of shutdown that we have seen in years, in maybe decades. So, I don't expect something like this to get repeated in the quarters to come. ... I would expect improved levels because like I mentioned to an earlier call, I have not seen this level of shutdowns and production disruptions in many decades. So, this is clearly a one-off exception.

Management attributed Q1 revenue and margin pressure to an 'unusual' and 'one-off' customer shutdown, expressing confidence that such disruptions are unlikely to recur and expecting improved performance as utilization recovers.

Asked by Parth Patel

Net Debt Increase and Funding Strategy for Bokaro Direct
So, we don't expect to have a stabilized debt equity even at the peak of more than 2:1. ... We will currently continue to work with debt and internal accruals, Bhavesh ji. I am not discounting future capital raise, but at these levels and at this market, I don't want to dilute company equity.

Addressed the increase in net debt and outlined the funding strategy for Bokaro, emphasizing a preference for debt and internal accruals over equity dilution, while maintaining a conservative debt-to-equity ratio.

Asked by Parth Patel

Customer Concentration and Diversification Strategy for CAGR Target Direct
most of the growth in terms of the 75% that we have projected over the next 3 years... is on account of the Bokaro Greenfield project coming online in a phased manner. ... we are absolutely not looking at a geographical concentration. We are actually speaking to people across the country because this also allows us to widen our market base and keep looking at future expansion opportunities.

Explained that the ambitious 75% revenue CAGR is primarily driven by the Bokaro project, which will enable diversification of the customer base and geographical reach (pan-India and potential exports), moving away from current customer concentration.

Asked by Mohan

NSE Listing Plans Direct
We do. Our team is already in conversation and as soon as we are able to fulfill all of their queries and questions.

Confirmed active plans to get the company's stock listed on the National Stock Exchange (NSE), indicating ongoing discussions and efforts to meet requirements.

Asked by Bhavesh

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Impacted by Customer Shutdowns

BMW Industries reported a revenue of ₹148.7 crores for Q1 FY26, marking a 5.4% sequential decline and a 14.4% year-on-year decline. Operating EBITDA margin contracted to 21.2% from 24.4% in Q1 FY25, a 326 basis points year-on-year reduction. Profit after tax stood at ₹15.2 crores with a margin of 9.9%. Management attributed this dip primarily to a temporary shutdown by key customers, impacting volumes in CRM, rolling mill, and to some extent, Tubes segments, characterizing it as an 'unusual' and 'one-off' event not expected to recur.

Bokaro Greenfield Project and Capacity Expansion on Track

The company successfully commissioned two additional tube mills and a 1.28-megawatt rooftop solar installation at its Jamshedpur facility, increasing tube manufacturing capacity by 60,000 metric tons per annum to a total of approximately 600,000 metric tons per annum. The Bokaro Greenfield project, involving a Capex of ₹803 crores for PLI-approved speciality steel products (coated, alloy, non-alloy coated, GI, Galvalume, ZAM), is progressing as planned. Revenue generation from the color-coated sheet plant is expected to commence by Q4 FY26, with FY28 projected as the first full year of Bokaro's operations.

Strategic Shift Towards Integrated Model and Long-Term Margin Outlook

BMW Industries is transitioning from a conversion business model with mid-20s EBITDA margins to an integrated downstream steel processing model. This shift will lead to steel inputs comprising over 80% of revenue, moderating consolidated operating EBITDA margins to about 11% by FY28. Despite this, PAT is expected to grow at a robust 40% CAGR over the next 3 years, with PAT margin stabilizing at about 5% by FY28, targeting a return on capital employed over 18%. Management emphasized interpreting margin trends alongside absolute value creation and volume scaling.

Robust Long-Term Growth Guidance

The company provided strong guidance for the next three fiscals, anticipating consolidated revenue to grow at a CAGR of approximately 75%, primarily driven by the phased commissioning of the Bokaro Greenfield project and organic growth. Operating EBITDA is projected to grow at a CAGR of 45% over the same period. This growth is expected to come from diversified products and a wider market reach, including pan-India distribution and potential exports, addressing current customer concentration.

Capital Allocation and Funding Strategy

Net debt increased from ₹120 crores in March 25 to ₹160 crores by June 25. The entire ₹803 crores Capex for the Bokaro project is planned to be funded through a blend of new debt and internal accruals, leveraging cash flows from new revenue streams. Management stated they do not expect the debt-to-equity ratio to exceed 2:1 at its peak and expressed a preference against diluting company equity at current market valuations, indicating a disciplined approach to capital raising.

Optimistic Demand Scenario and Market Expansion

Management expressed strong optimism about the demand scenario in India, citing substantial growth in per capita steel consumption for both industrial and domestic uses. They highlighted the shift from traditional materials to steel products like pipes, hollow sections, and color-coated sheets in rural and semi-rural areas. The company plans to expand its market base pan-India from its Bokaro location, leveraging access to hot-rolled coils, and is also exploring export opportunities for its products.

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