Everest Kanto

Everest Kanto Cylinder reported a consolidated revenue of ₹367.0 crores for Q3 FY25, marking an 11.4% YoY increase, with a consolidated EBITDA of ₹39.9 crores and a margin of 10.9%. On a standalone basis, revenue grew 18.2% YoY to ₹244.3 crores, achieving an EBITDA of ₹36.5 crores and a margin of 14.9%. The company's PAT for the quarter stood at ₹18.0 crores, reflecting a steady performance despite international headwinds.

The domestic business demonstrated steady performance, driven by healthy demand from the CNG and industrial segments. This led to an improvement in margins, supported by prudent inventory management and operational efficiencies. Management noted that the CNG infrastructure and CV business are growing, contributing to the positive outlook for India, with domestic capacity utilization currently around 60%. The inventory restocking cycle for CNG cylinders has also begun.

International operations faced headwinds, particularly in the U.S. where margins were impacted by the project-based nature of order booking, and in Dubai due to a difficult operating environment. The USA subsidiary currently holds an order book of approximately $30 million. To counter these challenges and leverage new opportunities, the company is setting up a new plant in Egypt, which is expected to become operational in September 2025, targeting the growing CNG conversion market there.

The company's total debt for the group stands at ₹140 crores. Finance costs increased from ₹2.74 crores in the previous quarter to ₹4.59 crores in Q3 FY25. This increase was attributed to a slight rise in debt levels, primarily to fund inventory and debtors to support sales turnover, which management views as a strategic move to push growth and improve sales.

Everest Kanto Cylinder, along with other industry players, has received a GST demand notice for ₹127 crores. This notice stems from a difference in tax classification for CNG cylinders, with the department contending a 28% HSN rate versus the company's 18%. Management stated this is an industry-related matter, not a lapse on their part, and they are in the process of appealing the notice and pursuing other legal avenues.

For FY25, management expects revenue to be 'better than last year' and is working towards sustaining a consolidated EBITDA margin of 14%. The new Egypt operations are slated to commence in September 2025, and the UAE business is projected to perform 'definitely better' in the next quarter. The company remains focused on enhancing operational resilience and driving profitability across its global markets, while also pitching for business with Maruti.