Everest Kanto Cylinder Limited — Q3 FY26 earnings call

Call held 17 Feb 2026

Management summary

Everest Kanto Cylinder Limited delivered a strong Q3 FY26 performance, marked by robust financial growth and strategic capacity expansions. Consolidated revenues reached Rs. 365.1 crore, with EBITDA and PAT growing 48% and 98.9% YoY respectively, driven by improved realisations and a favourable product mix. The company initiated operations at its Mundra facility and approved significant capex in the US, while its Egypt facility is on track for May 2026 commencement, despite subdued Dubai operations.

Highlights

  • Consolidated revenues at Rs. 365.1 crore, reflecting strong performance.

  • Consolidated EBITDA grew 48% YoY to Rs. 59.2 crore, with margins expanding 534 bps to 16.2%.

  • Consolidated PAT grew 98.9% YoY to Rs. 35.7 crore.

  • Successfully commenced operations at the greenfield Mundra facility with one production line.

  • Approved USD 5.5 million capex in the US for larger diameter and Type 4 cylinders, backed by customer contracts.

  • Egypt facility progressing steadily, expected to commence operations by May 2026.

Concerns

  • Dubai operations remained subdued during the quarter.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹365.1 Cr
  • Consolidated EBITDA
    ₹59.2 Cr
    YoY +48%
  • Consolidated EBITDA Margin
    16.2%
  • Consolidated PBT
    ₹53.6 Cr
  • Consolidated PAT
    ₹35.7 Cr
    YoY +98.9%
  • Standalone Revenue
    ₹247 Cr
  • Standalone EBITDA Margin
    23.1%
  • Standalone PAT
    ₹36 Cr
    YoY +57.6%

9M

  • FY26 Standalone EBITDA Margin
    17.3%

What they filed

Q1 FY27: revenue down 10.6%, net profit down 42.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue367 367 422 387 360 −2%365 −1%358 −15%346 −11%
EBITDA53 40 38 61 43 −19%59 +48%40 +5%47 −23%
Net profit39 18 13 52 14 −64%36 +100%46 +254%30 −42%
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

$75 Mn

as of 2025-12-31 quantified

Execution

executable over 2 years

Pipeline

deal pipeline tcv

US operations have a strong order pipeline.

The US capex for capacity expansion is backed by customer contracts, indicating strong demand visibility.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    • Enhance manufacturing capabilities for larger diameter and Type 4 cylinders in US (CP Industries) $5.5 Mn
    • Strengthen capabilities and enhance operational readiness at Mundra facility ₹30 Cr
    To support future growth opportunities, we have approved a capex of USD 5.5 million in our wholly owned subsidiary, CP Industries, to enhance manufacturing capabilities, with a focus on larger diameter and Type 4 cylinders. ... We have also approved additional capex of Rs. 30 crore to strengthen capabilities and enhance operational readiness at the facility.

Guidance & targets

Margin

  • Sustainable EBITDA Margin Margin · going forward · High confidence 15-17%
    15% - 17%, you can consider, with the product mix and everything, I think it should be.

    — Puneet Khurana

Revenue

  • Top line Growth Revenue · FY27 · High confidence 15-20%
    I think about 15% - 20% is what we are targeting. We would like to grow at that.

    — Puneet Khurana

  • UAE Revenue for Breakeven Revenue · FY27 · Medium confidence at least 10% higher
    Yes, I mean whatever they are doing, at least 10% higher would be breakeven. Over 10%, probably we expect that to come into FY27. Yes.

    — Puneet Khurana

  • US Capex Incremental Revenue Revenue · FY27-FY28 · High confidence Rs. 100 crores
    We expect that about additional Rs. 100 crores should be added to the top line once the expansion is complete in FY27-FY28.

    — Puneet Khurana

  • Egypt Facility First Year Revenue Revenue · first year of operations · High confidence Rs. 50-60 crores
    For the first year, I think about Rs. 50 crores - Rs. 60 crores.

    — Puneet Khurana

Profitability

  • Bottom line Growth Profitability · FY27 · High confidence 15-20%
    I think about 15% - 20% is what we are targeting. We would like to grow at that.

    — Puneet Khurana

  • UAE Business Breakeven Profitability · FY27 · High confidence Breakeven
    But do we expect to break even in the UAE business in FY27? Yes, of course.

    — Puneet Khurana

Capacity

  • Mundra Remaining Lines Operational Capacity · next quarter · High confidence Operational
    And on the India business, other than Mundra, the remaining two lines when are we expecting? And what sort of capacity that will increase to? Maybe by next quarter.

    — Puneet Khurana

  • Mundra Capacity Increase Capacity · upon full commissioning · High confidence 15%
    Okay. And it will increase our capacity by what percentage? Around 15%.

    — Puneet Khurana

What to watch in Q4 FY26

Mundra facility remaining lines operational

next quarter
Current One production line operational
Target Remaining two lines operational

Why it matters

Completion of domestic capacity expansion is crucial for increasing overall production and meeting demand.

The remaining two lines are expected to be established over the coming months. ... Maybe by next quarter.

Risks & concerns

  • Subdued Dubai operations

    medium

    Operations in Dubai remained subdued during the quarter, though management is focusing on improvement.

    Management acknowledged

  • Product mix volatility affecting margins

    low

    Product mix influences margins, and while there will be ups and downs, management sees good visibility in defense and semiconductor segments.

    Analyst acknowledged

  • Pending GST case in India

    low

    No update on the GST case, with management also awaiting resolution.

    Analyst not addressed

Q&A highlights

8 direct
Margin expansion drivers in India Direct
Our focus is on a little higher end products. We have some products in CV market, some products in defense, some products in the semiconductor industry. So that has been the product mix and that is why the margins in this quarter have been quite good.

Explains the significant improvement in standalone EBITDA margins (23.1%) due to a favorable product mix.

Asked by Chirag Gothi

Sustainability of commercial vehicle (CV) cylinder demand Direct
Yes, of course, it is sustainable because it has come after a period where the consumers were also trying to gauge the CNG prices... Now with their getting used to the CNG price, even diesel prices are high, petrol prices are high. The consumers are more or less now are accepting and of course, the infrastructure of CNG stations has been increasing every year.

Addresses concerns about the longevity of demand in a key growth segment, citing structural drivers like CNG infrastructure and consumer acceptance.

Asked by Anubhav Mukherjee

Company's involvement in composite cylinders in India Direct
We are in type 3 composite cylinders. This is a new market and so we are slowly making some headway into this market. ... No. Not right now. We have more focus on type 3 right now. In the future, definitely, as you know, this composite business grows, we are also learning and evolving, and we are making type 4 in the company in the U.S.

Clarifies the company's current product offerings and future plans for advanced composite cylinders in the Indian market.

Asked by Anubhav Mukherjee

Sustainability of 16% EBITDA margins Direct
I would like to understand that are the 16% EBITDA margins sustainable going forward. Yes, I think they should be. ... 15% - 17%, you can consider, with the product mix and everything, I think it should be.

Provides management's outlook on future profitability, setting a clear expectation for investors.

Asked by Gunit Singh

Turnaround and breakeven for UAE business Direct
I think in the coming quarters, we were expecting some businesses to come up in the Middle East and in Africa region, but things have just been slow. Hopefully, in the coming quarters, we should expect that the business should come up. ... But do we expect to break even in the UAE business in FY27? Yes, of course.

Addresses the subdued performance of the Dubai operations and provides a timeline and target for its recovery.

Asked by Jatin Damania

Revenue potential from US capex Direct
What sort of visibility do we have in the U.S. market? Or is this particular capex backed by any contracts that you are signing up with the customer? Yes. U.S. business, what is happening is that most of the larger vehicles have been converted into CNG. We are already working with an OEM who wants us to expand capacity. So this capacity expansion is exactly as per the customer contract. We expect that about additional Rs. 100 crores should be added to the top line once the expansion is complete in FY27-FY28.

Quantifies the expected revenue impact of the USD 5.5 million US capex and confirms strong customer backing.

Asked by Jatin Damania

Egypt facility commencement and first-year revenue Direct
And on the Egypt front, now once the capacity comes in month of May or June, will it take time for the customer to approve our product. The customer approval is already there because the same customers were buying previously also. ... For the first year, I think about Rs. 50 crores - Rs. 60 crores.

Provides a clear timeline for the new Egypt facility and its expected revenue contribution, highlighting pre-existing customer relationships.

Asked by Jatin Damania

US order book value and execution timeline Direct
Sir, I wanted to know what is the order book for USA? Around $75 million. Okay. And execution time? Maybe 2 years.

Provides a specific, quantified order book for the US market and its expected execution period, indicating future revenue visibility.

Asked by Reet Jain

2 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Financial Performance

Everest Kanto Cylinder Limited reported a strong Q3 FY26, with consolidated revenues reaching Rs. 365.1 crore. Consolidated EBITDA grew 48% year-on-year to Rs. 59.2 crore, and EBITDA margins expanded by 534 basis points to 16.2%. The company's consolidated PAT saw a significant increase of 98.9% year-on-year, totaling Rs. 35.7 crore. Standalone performance also remained robust, with revenues of Rs. 247.0 crore and EBITDA margins at 23.1%, contributing to a 57.6% YoY growth in standalone PAT to Rs. 36.0 crore.

Profitability Driven by Product Mix and Cost Discipline

The notable improvement in profitability was attributed to improved realisations, a favourable product mix, and continued focus on cost discipline. Management highlighted a strategic shift towards higher-end products, including those for the commercial vehicle (CV) market, defense, and the semiconductor industry. This product mix strategy is expected to sustain EBITDA margins in the 15-17% range going forward, optimizing both volume and value for profitable growth.

Domestic and International Operations Overview

India operations were the primary contributor to overall performance, benefiting from steady demand in CNG and industrial applications, particularly with increased CV CNG volumes. In the US, operations showed healthy progress supported by a strong order pipeline. Conversely, Dubai operations remained subdued during the quarter, though management is focused on strengthening market engagement and expects improvement towards breakeven in FY27.

Strategic Capacity Expansion and Capex

The company made significant strides in capacity expansion, commencing operations at its greenfield Mundra facility with one production line now active. The remaining two lines are expected to be established in the coming months, which will increase capacity by approximately 15%. An additional capex of Rs. 30 crore was approved for Mundra to further enhance capabilities. In the US, a USD 5.5 million capex was approved for the wholly-owned subsidiary, CP Industries, to boost manufacturing capabilities for larger diameter and Type 4 cylinders, with an expected incremental revenue of Rs. 100 crores by FY27-FY28.

New Market Entry: Egypt Facility Progress

The Egypt facility is progressing steadily and is anticipated to commence operations by May 2026. This new facility is strategically positioned to address domestic demand and regional market requirements, further strengthening the company's global manufacturing footprint. Management expects the Egypt facility to contribute approximately Rs. 50-60 crores in revenue during its first year of operation, with customer approvals already secured.

Order Book and Future Outlook

The US business currently holds an order book of around $75 million, which is expected to be executed over the next two years. This order book, along with the US capex, is backed by customer contracts, providing strong visibility. Overall, the company is optimistic about the improving demand environment and the progress of its strategic initiatives, targeting a 15-20% growth in both top line and bottom line for FY27.

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