GMM Pfaudler Limited — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

GMM Pfaudler delivered strong Q2 FY26 results, showcasing double-digit growth in revenue and EBITDA, driven by robust order intake and strategic diversification. The company successfully integrated the SEMCO acquisition, bolstering its international presence and order book. While traditional European chemical and pharma markets remain subdued, new growth avenues in acid recovery, semiconductors, and heavy engineering (nuclear, green hydrogen) are gaining traction, supported by a strong domestic performance and a focus on comprehensive system solutions.

Highlights

  • Revenue of ₹902 crores, up 14% QoQ and 12% YoY.

  • EBITDA of ₹122 crores, up 20% QoQ and 27% YoY.

  • EBITDA margin at 13.5%.

  • H1 FY26 Revenue up 7% YoY, and H1 FY26 EBITDA up 21% YoY.

  • Order intake for the quarter was ₹878 crores.

  • Current order backlog stands at ₹2,146 crores.

  • SEMCO acquisition completed, adding USD 20 million to the backlog.

  • India order book increased by ₹90-100 crores QoQ.

Key financials

  1. Revenue ₹902 Cr +12%YoY
  2. EBITDA ₹122 Cr +27%YoY
  3. EBITDA Margin 13.5%
  4. Order Intake ₹878 Cr
  5. Order Backlog ₹2,146 Cr

What they filed

Q1 FY27: revenue up 16.4%, net profit up 120.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue805 801 807 795 902 +12%884 +10%944 +17%925 +16%
EBITDA93 96 83 101 122 +31%105 +9%75 −10%94 −7%
Net profit15 40 -28 10 39 +160%-11 −127%15 +154%22 +120%
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.

Guidance & targets

Order Backlog

  • India Order Backlog Improvement Order Backlog · over previous years (for starting next year) · Medium confidence 15-20%
    I would hope that at least a 15% to 20% improvement over previous years we would like to start with in terms of order backlog.

    — Tarak Patel, Managing Director

Debt

  • Leverage Ratio Debt · long-term · High confidence below one
    The debt ratio, I think we do not want to go. We said we would like to keep our leverage below one. And this is also our long-term guidance that we would like to give.

    — Alexander Poempner, Group Chief Financial Officer

Revenue Growth

  • International Revenue Growth Revenue Growth · Medium confidence lower than India
    I think international may be a little bit lower than that.

    — Tarak Patel, Managing Director

Heavy Engineering Revenue Growth

  • Heavy Engineering Revenue Growth Heavy Engineering Revenue Growth · this half year · High confidence 15%
    And from this half year, we are at what? Yes, I think that there is already like 15% growth or something like that. So, it is growing. We expect HE to do quite well this year also.

    — Tarak Patel, Managing Director

Market context

  • India Revenue Growth Revenue Growth · Medium confidence double-digit
    Yes, I think double-digit growth in India should be kind of something that we should aspire for.

    — Tarak Patel, Managing Director

Risks & concerns

  • Slowdown in traditional chemical and pharma industries in Europe

    medium

    Europe is still slow in traditional chemical and pharma, impacting the glass-lined business, though diversification is helping to mitigate this.

    Management acknowledged

  • Global trade and geopolitical uncertainties delaying investment decisions

    medium

    Uncertainty surrounding global trade and geopolitical issues is causing delays in investment decisions, particularly in Europe.

    Management acknowledged

  • Working capital deterioration (higher inventory and receivables)

    medium

    Working capital increased in H1, driven by higher inventory (especially in India) and receivables, though management expects improvement in H2.

    Management acknowledged

  • Potential for price wars if capacity is expanded aggressively in the glass-lined business

    low

    Management explicitly stated they do not want to add capacity in glass-lined to avoid a price war, indicating a cautious approach to expansion to maintain profitability.

    Management acknowledged

Areas of evasion (2)

  • precise quantification of future opportunities (e.g., nuclear, green hydrogen)
  • specific long-term growth numbers

Q&A highlights

3 direct
Impact of US Biosecure Act on reshoring and GMM Pfaudler's US business Direct
If that were to materialize, that would definitely help our U.S. entity, because we are one of the only manufacturers of glass-lined equipment in the U.S. in terms of a large scale and size.

Reveals potential future growth drivers for the US business based on geopolitical shifts and GMM Pfaudler's unique market position as a local manufacturer.

Asked by Kunal from Sunidhi Securities

Integration strategy for multiple mixing technology acquisitions (SEMCO, MixPro, Mixel, India Pharma) Direct
From a strategy perspective, there is an entire strategy being built around these four mixing platforms. We definitely want to combine them under one umbrella. There is a rebranding strategy going on. We want to bring the product portfolio under one group.

Provides insight into the company's M&A integration strategy and how it plans to leverage diverse technologies for global market share under a unified brand.

Asked by Sagar Shah from Spark Private Wealth Management

Outlook for domestic market, price undercutting, and capacity expansion in glass-lined equipment Direct
No, nothing right now. I think there is plenty of capacity that we have. We can very quickly add furnaces if we need. But I do not think that glass-lined is something that I think we have enough of capacity. I do not want to be in a situation where to fill capacity we have to start again kind of going into a price war.

Addresses concerns about competitive pricing and future capacity decisions in a core segment, indicating a focus on profitability over aggressive expansion that could lead to price wars.

Asked by Yug Jhaveri from Molecule Ventures

3 min read 7 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Diversification

GMM Pfaudler reported a robust Q2 FY26, with revenue reaching ₹902 crores, marking a 14% QoQ and 12% YoY increase. EBITDA grew even faster at 20% QoQ and 27% YoY to ₹122 crores, achieving an EBITDA margin of 13.5%. The company's strategic diversification efforts are yielding positive results, as growth in new segments and geographies is effectively offsetting the slowdown in traditional European chemical and pharma markets.

Record Order Intake and Backlog

The quarter saw strong order intake of ₹878 crores, contributing to a healthy order backlog of ₹2,146 crores. The India business performed particularly well, with its order book increasing by ₹90-100 crores QoQ and showing an upward trajectory. Management anticipates at least a 15-20% improvement in India's order backlog over previous years, providing good visibility for the next financial year.

Strategic Acquisitions and Integration of Mixing Platforms

GMM Pfaudler completed two key acquisitions: SEMCO in Brazil for USD 18.5 million (₹162 crores) and a JV in Poland for 11 million Polish zloty (₹25 crores). SEMCO alone added USD 20 million to the order backlog. The company is actively integrating its four mixing technology platforms (SEMCO, MixPro, Mavag, Mixel) under a unified umbrella, aiming to leverage their distinct expertise across global industry segments like metals, minerals, mining, chemicals, pharma, and biotech.

Growth in New Verticals: Acid Recovery, Nuclear, and Green Hydrogen

While traditional markets face headwinds, GMM Pfaudler is seeing significant traction in new areas. The systems business, particularly in acid recovery, secured a very large order last quarter and is negotiating several more large contracts for nitric acid production. The heavy engineering segment is expanding into nuclear (supplying heat exchangers for NPCIL) and green hydrogen (already executed an order for a German EPC), with management expecting approximately 15% growth in heavy engineering revenues this half year.

US Market Potential and Biosecure Act

The US market shows signs of improvement, with the 'Make in U.S.' initiative and the recently passed Biosecure Act presenting potential opportunities. Management noted requests for US-made equipment for US sites, which could significantly benefit GMM Pfaudler's US entity as one of the few large-scale glass-lined equipment manufacturers there. This could drive future investments in chemical and pharma within the US.

Working Capital Management and Pricing Stability

Working capital increased in H1 due to higher inventory (especially in India) and receivables, but management expects an improvement in H2. In the domestic glass-lined business, pricing has stabilized after a period of undercutting, and the Karamsad facility is running at full capacity with a 5-6 month backlog. The company is cautious about adding new capacity to avoid initiating another price war, prioritizing sustainable margins.

Pension Liabilities and FX Impact

Unfunded pension liabilities increased by approximately ₹30 crores over FY25, primarily due to changes in actuarial assumptions and FX impacts, as the plan itself is closed with no future additions. On the FX front, the significant USD-Euro depreciation in Q1 FY26, which caused a financial loss and increased tax rate, did not materially recur in Q2 FY26, leading to an improved tax rate for the international business.

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