Interarch Build.

Interarch Building Products reported a strong Q3 FY25 with revenue of ₹364 crores, a 15% year-on-year growth. EBITDA for the quarter stood at ₹35 crores, up 28% YoY, leading to an improved EBITDA margin of 9.7%. Profit After Tax (PAT) also grew by 28% YoY to ₹28 crores. For the nine months of FY25, revenue reached ₹990 crores (9% YoY growth), EBITDA ₹88 crores (20% YoY growth), and PAT ₹69 crores (23% YoY growth), indicating consistent performance.

The company's total unexecuted order book is robust at ₹1,305 crores, reflecting sustained demand. Management indicated that this order book is expected to be completed within the next 8-9 months, a shorter timeline compared to previous large orders which took 10-12 months. The bidding pipeline is substantial, with ₹2,500 crores in confirmed bids and another ₹1,500 crores under active discussion, totaling ₹4,000 crores.

Interarch is expanding its installed capacity from the current 1,61,000 metric tons per annum (utilizable 1,35,000 MTPA). An additional 40,000 MT capacity from Athivaram Phase-2 and Kichha Line-3 is expected to be operational by Q1 FY26, bringing total installed capacity to 200,000 MTPA. The company aims to utilize 75% of this new capacity in the next financial year and 100% in the following financial year. A new Greenfield plant in Gujarat, with a capacity of 40,000 tons and an estimated Capex of ₹80-90 crores, is planned to commence work after the monsoon this year and be operational by Q1 FY27.

Management reiterated its target to double turnover by FY27-28, aiming for a 20% sales growth in FY26, followed by 22% growth per year thereafter. This aggressive growth is supported by capacity expansion, diversification into new sectors like EV infrastructure, renewables, data centers, and multi-story buildings, and strategic tie-ups like the one with JSPL for heavy steel structures. The company also focuses on outsourcing production facilities to manage order intake beyond its own capacity.

EBITDA margins improved to 9.7% in Q3 FY25 and 8.9% for 9M FY25. Management expects margins to be sustainable and potentially improve further due to operational leverage as turnover increases. Fixed costs as a percentage of sales have dropped to 9.2% from 10% and are expected to decrease further. The company is also investing in automation and technology to enhance productivity and quality, addressing potential skilled labor shortages and improving overall efficiency.

The business mix for Q3 FY25 was predominantly Industrial & Manufacturing at 86%, with Infrastructure (including logistics) at 12%, and other building types at 2%. For 9M FY25, Manufacturing accounted for 75% and Infrastructure 23%. Interarch emphasizes its role as a 'capital goods partner' for sophisticated clients, with repeat orders accounting for over 70% of its business. The average order value has tripled from ₹4 crores to ₹12 crores in the last three years, driven by larger projects.

Interarch has established a dedicated export wing to capitalize on opportunities from Western countries and neighboring regions, particularly as clients seek alternatives to China. While export margins are 'slightly better' than the local market, high freight costs, especially to North America, temper the overall profitability. The company is focusing on higher volumes of simpler buildings in the export market to utilize production capacity.