Interarch Building Solutions Q1 FY27 earnings call

Interarch Building Solutions reported a robust Q1 FY27, with revenue growing 20.7% year-on-year to ₹460 crores. EBITDA increased by 24.6% to ₹39 crores, maintaining a stable EBITDA margin of 8.6%. However, Profit After Tax (PAT) remained flat at ₹28 crores, primarily due to lower other income as treasury funds were reallocated to strategic capital expenditure. Operating cash flow for the quarter was positive at ₹26.83 crores.

The company's order book significantly strengthened to ₹1,864 crores as of July 31, 2026, reflecting sustained customer confidence and market activity. Management aims for a quarterly revenue run rate of at least ₹600 crores for the remaining quarters to achieve the FY27 revenue target of ₹2,150-2,200 crores. Furthermore, the FY28 revenue projection was revised upwards from ₹2,500 crores to ₹2,700 crores, signaling strong future growth expectations.

Interarch is actively expanding its manufacturing capabilities to meet growing demand. The heavy structure plant in Andhra Pradesh is currently on trial production and is expected to commence commercial production by the end of August or early September 2026. Additionally, Phase 1 of the Gujarat pre-engineered building plant began operations on July 9, 2026, with Phase 2 targeted for completion by October 2026, contributing to a total capacity of 221,000 tonnes.

The company is strategically targeting high-growth 'new age industries' such as data centers, EVs, renewables, lithium batteries, and high-rise buildings, which now constitute approximately 35% of the current order book. To penetrate international markets, Interarch has formed a joint venture with a Canadian company to establish a 100% export unit for open web joist systems. This export venture is projected to contribute 10% of total turnover in 1-2 years and is expected to yield an EBITDA margin exceeding 20%.

A recently approved QIP of ₹250 crores will fund key expansion projects, including ₹150 crores for heavy structure in Andhra, ₹50-60 crores for Gujarat Plant 2, and ₹50-60 crores for the Canadian export unit. The company has already invested ₹240 crores in capex over the last two years and maintains a zero-debt position. The deployment of treasury funds for these capex initiatives explains the flat PAT despite strong operational performance.

While Q1 FY27 EBITDA margin was 8.6%, management aims to achieve 9.5-10% for FY27-28. This improvement is expected to be driven by internal efficiencies, better purchasing, reduced wastage, and a focus on more complex and higher-margin projects. Although initial expenses for new plant ramp-up might temper immediate margin increases, the company is confident in achieving its long-term profitability targets.

Interarch acknowledges facing near-term external challenges^🌐, including geopolitical events like the Iran war, fluctuations in steel prices, and manpower shortages. However, management asserts that these challenges are being effectively managed through proactive strategies and operational resilience. The company maintains a cautious approach to expansion, prioritizing sustainable growth and profitability over aggressive order intake.