Detailed Narrative
Robust FY26 Financial Performance Driven by Margin Expansion
Everest Kanto Cylinder delivered a healthy financial performance for FY26, with consolidated revenues reaching ₹1,470.6 crore. The company achieved a significant 50.1% YoY growth in Profit After Tax (PAT), totaling ₹146.7 crore. This strong profitability was supported by a 15.7% YoY increase in consolidated EBITDA to ₹203 crore, with EBITDA margins expanding by 210 basis points to 13.8%, attributed to a favorable product mix, improved realizations, and operational efficiencies.
Strategic Capacity Expansion in India and Egypt
The company is actively expanding its manufacturing capabilities to meet growing demand. The greenfield Mundra facility in India has successfully commenced operations, enhancing domestic production capacity. Furthermore, the Egypt facility is progressing steadily and is expected to become operational by the end of June 2026. Management anticipates a ramp-up for Mundra within six months and for Egypt after six months of becoming operational, targeting an immediate 40% utilization for Egypt, eventually reaching 80%.
Diversified Demand and Healthy US Order Book
Everest Kanto is benefiting from strong demand across its diverse market segments. The India business is experiencing robust growth in both CNG and industrial gas applications, including higher value-added sectors like semiconductors and defence. Internationally, the US business maintains steady momentum, backed by a healthy order pipeline, with a quantified order book of US$75 million, which is expected to be executed over the next 18 to 24 months.
Challenges in Dubai Business and Fuel Price Volatility
Despite overall positive performance, the Dubai business faced continued pressure throughout FY26, operating at approximately 50% capacity. This was primarily due to the challenging geopolitical situation in the Middle East, which impacted shipments. Additionally, the company acknowledges near-term fuel price volatility as a factor to monitor, though management believes its impact on India's CNG passenger vehicle sales will not be substantial, given the competitive positioning against petrol.
Capital Allocation and Positive Outlook on GST Case
The company continues to invest in strategic growth, with ₹162 crore in Capital Work-in-Progress (CWIP) allocated to projects in Egypt, USA, and India that are yet to be capitalized. In terms of shareholder returns, the Board has recommended a dividend of Re. 0.70 per share for FY2026. Management also provided a positive update on the GST case, stating that representations have been made to the government for HSN clarification, with a resolution expected within 6 months to a year.