Manaksia Coated Metals & Industries Limited — Q1 FY26 earnings call

Call held 23 Jul 2025

Management summary

Manaksia Coated Metals & Industries Limited delivered a strong Q1 FY26, marked by significant growth in revenue, profitability, and EBITDA. The company's strategic focus on value-added products and export markets yielded substantial returns, with exports contributing a record 57% of total revenue. Ongoing capacity expansions and technology upgrades, including Alu-zinc and a second color coating line, are on track to further enhance margins and market position, supported by a strengthened balance sheet.

Highlights

  • Consolidated total income witnessed a robust year-on-year growth of 29.97%, reaching INR 253.94 crores.

  • Profit Before Tax (PBT) recorded an impressive surge of 364.43% year-on-year, amounting to INR 18.70 crores.

  • Net profit also saw a significant rise of 359.70% year-on-year, standing at INR 14.01 crores.

  • EBITDA increased by 93.36% year-on-year, reaching an impressive INR 28.62 crores, with an EBITDA margin expansion of 370 basis points to 11.27%.

  • Export revenue climbed 182.28% year-on-year, contributing a record 57% of the total revenue.

Key financials

  1. Consolidated Total Income ₹253.94 Cr +30%YoY
  2. Consolidated PBT ₹18.7 Cr +364.4%YoY
  3. Consolidated Net Profit ₹14.01 Cr +359.7%YoY
  4. Consolidated EBITDA ₹28.62 Cr +93.4%YoY
  5. Consolidated EBITDA Margin 11.3%
  6. Consolidated EPS ₹1.42 +253.9%YoY
  7. Standalone Total Income ₹253.89 Cr
  8. Standalone Net Profit ₹14.1 Cr
  9. Standalone EPS ₹1.43

What they filed

Q1 FY27: revenue up 4.8%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue175 205 208 250 220 +26%187 −9%227 +9%262 +5%
EBITDA11 14 15 25 26 +136%16 +14%14 −7%28 +12%
Net profit2 5 5 14 14 +600%7 +40%5 +0%14 +0%
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.

Capital allocation

high confidence
  • Capex ₹50 Cr this quarter · ₹150 Cr (FY26) planned Mix of equity and debt, with an assumed average of close to 70% financing by debt and the balance by equity for new projects.
    • Alu-zinc Technology upgrade
    • 7-megawatt captive solar power plant ₹30 Cr
    • Second color coating line
    See, the total capex that we are doing in all three projects that are coming on stream in FY 26, which is the Alu-zinc Technology upgrade, the capex solar power plant and the second color coating line. The total capex would be roughly around, you can say close to about INR150 crores. Yes, out of this INR150 crores we would have already incurred capex of roughly around INR50 crores approx. And the remaining would be done as and when the project advances in the course of next three quarters. I think you can you can assume an average of close to 70% financing by debt and the balance by equity. Solar will be anywhere between INR30 crores to INR35 crores.
  • Debt 2.3× EBITDA
    • Repayment Funds from preferential warrants infused into the company and deployed towards reducing existing debt. ₹161.22 Cr
    At the end of FY 25, our net debt to EBITDA ratio stood at 2.3x. And we are well on track to bring it down to 1.7x at the end of FY26. This target is backed by strong EBITDA performance, improved earnings visibility, and healthy cash flows. With continued focus on operational efficiency and prudent capital allocation, we remain confident in our ability to strengthen the balance sheet while driving sustainable growth.
  • M&A JPA Snacks Merger · Announced

    To simplify balance sheet, P&L reporting, and other activities as the subsidiary has been non-operational for 4-5 years.

    Simplification of reporting and operations.

    The rational for amalgamation with JPA snacks is very simple. This is a subsidiary which was created almost a decade back, more than a decade back for a pilot project that the company had undertaken in the FMCG business. However, this subsidiary has been non-operational without any revenue since more than almost now four to five years. And hence in order to simplify our balance sheet, P&L reporting and all of the other activities that we as a company need to undertake as a listed entity, we felt it is beneficial to merge with the entities.
  • Liquidity Liquidity disclosed INR 13 crores pending to be received from warrant conversion, expected in coming three quarters.
    Only an amount which is approximately INR13 crores is pending to be received against the warrant conversion. It should be received in the coming three quarters.

Guidance & targets

Revenue

  • Peak Revenue Revenue · FY27 · High confidence INR 1,600 crores
    On the basis of capacities being added by us in both these projects, we can see in an ideal scenario, best case scenario, the peak revenue of the company touching close to INR 1,600 crores with this capacity expansion in FY27.

    — Karan Agrawal

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 11.27%
    I think pertaining to the guidance of revenue and profitability, we can confidently tell you that the performance achieved in Q1 is definitely something as a benchmark that we have set which we expect to continue towards the remaining quarters of the financial year.

    — Karan Agrawal

  • EBITDA Margin expansion from Alu-Zinc Profitability · Post Alu-Zinc upgrade · High confidence 30%
    I think the major EBITDA expansion that we are going to witness will be on account of the Alu-Zinc project or the Alu-Zinc technology upgrade that we are going to implement by the end of Q2 and going by the industry norms currently with the price realizations that Alu-Zinc is commanding. And the production costs being incurred for production of Alu-Zinc, we can safely say that an EBITDA expansion of 30% from the existing level is something that the company has the potential to realize.

    — Karan Agrawal

  • Sustainable EBITDA Margin Profitability · Post Alu-Zinc upgrade · High confidence 12-13%
    I think yes, the EBITDA margin expansion will happen with Alu-Zinc and looking at the product price that Alu-Zinc commands and the lower cost of production that Alu-Zinc incurs, we can safely say that the EBITDA margins anywhere between 12% to 13% is possible and sustainable at a good capacity utilization. This is very much possible.

    — Karan Agrawal

  • EBITDA Margin for next year Profitability · FY27 · High confidence 12-13%
    for current year, we can assume 11% EBITDA and in Q4 and in Q1 of next year, it seems both of your expansions are coming on stream. So, we can assume 12% to 13% EBITDA margin for next year. Is my assessment correct, sir? This guidance would be absolutely correct.

    — Karan Agrawal

  • PBT Margin expansion from backward integration Profitability · Post backward integration · High confidence 1.5-2%
    I think the backward integration by way of producing our own cold rolled steel would definitely give us access to expand our margins by another 1.5% to 2% on the PBT level.

    — Karan Agrawal

Debt

  • Net Debt to EBITDA Debt · FY26 · High confidence 1.7x

    From 2.3x today

    At the end of FY 25, our net debt to EBITDA ratio stood at 2.3x. And we are well on track to bring it down to 1.7x at the end of FY26.

    — Karan Agrawal

Capacity

  • Alu-Zinc line utilization Capacity · Within 60-90 days of commissioning · High confidence 75-80%
    On the Alu-Zinc line, definitely more than 60% because we are already at a run rate of about 1,20,000 tons per annum before the capacity has been added. So I think on the Alu-zinc plan we can safely assume that within a period of 60 days to 90 days of commissioning we can easily touch 75% to 80% utilization.

    — Karan Agrawal

  • Second color coating line utilization Capacity · After one quarter of successful commissioning · High confidence 70%
    And on color coating on the second color coating line I would like to say that well I think close to 70% utilization is a safe number or a conservative number that I can tell you we can reach after one quarter of successful commissioning.

    — Karan Agrawal

Exports

  • Export Revenue Percentage Exports · FY26 · High confidence 50% and above
    So57% is an all-time high, and yes, we see that we will be able to continue this kind of export performance. But on the conservative side, I would like to give you an answer by saying that we will be able to maintain 50% and above export of revenue for the year. This is the kind of projection we have.

    — Karan Agrawal

Other

  • Payback period for FY26 projects Other · FY26 · High confidence 4 years
    So I think on the projects that we have already in pipeline for FY26 we are looking at aggressive returns on the investments that we are doing and we're targeting something on the lines of 4 year payback for these projects.

    — Karan Agrawal

  • Payback period for solar project Other · High confidence 2.5 years
    The solar project is going to be faster because the savings against the cost of electricity is very high. So the payback for the solar project can be as early as 2.5 years.

    — Karan Agrawal

  • Annual power savings from solar plant Other · Per annum · High confidence INR 6-7 crores
    At the existing level of our power consumption. We are quite sure of saving anywhere in the range of INR6 crores to INR7 crores per annum.

    — Karan Agrawal

What to watch in Q2 FY26

Alu-Zinc line capacity utilization

Within 60-90 days of commissioning (Q3/Q4 FY26)
Current ~120,000 tons per annum run rate before upgrade
Target 75-80% utilization of enhanced 180,000 tons capacity

Why it matters

Key to realizing revenue and margin benefits from a major strategic upgrade.

On the Alu-Zinc line, definitely more than 60% because we are already at a run rate of about 1,20,000 tons per annum before the capacity has been added. So I think on the Alu-zinc plan we can safely assume that within a period of 60 days to 90 days of commissioning we can easily touch 75% to 80% utilization.

Risks & concerns

  • Chinese competition in export markets

    medium

    Management stated that global barriers against Chinese products and 'China plus one' policies are benefiting Indian exporters, helping them penetrate markets.

    Analyst acknowledged

  • Potential elongation of working capital cycle due to higher exports

    low

    Analyst's question regarding the impact of increased exports on working capital and debt was not fully addressed due to technical difficulties.

    Analyst not addressed

Q&A highlights

6 direct, 1 evasive
Revenue and OPM guidance for FY26 Direct
I think pertaining to the guidance of revenue and profitability, we can confidently tell you that the performance achieved in Q1 is definitely something as a benchmark that we have set which we expect to continue towards the remaining quarters of the financial year.

Management confirmed Q1 performance as a benchmark for the rest of the financial year, indicating sustained strong performance.

Asked by Aman Soni

Peak revenue potential and utilization for new capacities Direct
On the basis of capacities being added by us in both these projects, we can see in an ideal scenario, best case scenario, the peak revenue of the company touching close to INR 1,600 crores with this capacity expansion in FY27.

Provides a long-term revenue target post-expansion, indicating significant growth potential from new capacities.

Asked by Aman Soni

EBITDA margin expansion from Alu-Zinc upgrade Direct
I think the major EBITDA expansion that we are going to witness will be on account of the Alu-Zinc project or the Alu-Zinc technology upgrade... an EBITDA expansion of 30% from the existing level is something that the company has the potential to realize.

Quantifies the expected margin benefit from a key strategic project, highlighting the financial impact of technology upgrades.

Asked by Prathamesh Dhiwar

Sustainability and evolution of export market Direct
I'm very confident that we can maintain consistency and this kind of performance in the export side is sustainable... we will be able to maintain 50% and above export of revenue for the year.

Addresses the sustainability of the high export contribution and provides a clear target for export revenue percentage, reinforcing confidence in global strategy.

Asked by Meet Katrodiya

Breakup of EBITDA per ton for galvanized vs. pre-painted steel Evasive
We will definitely reach out to you, Meetji, with this breakup, and I request Mr. Mahendra Bang, our CFO, to prepare a note on this request and give a message to Mr. Meet.

This is a crucial operational metric for understanding segment profitability, and the company deferred providing this specific breakdown on the call.

Asked by Meet Katrodiya

Impact of increased exports on working capital cycle and debt Partial
Darshil ji, your voice broke up completely. We could not understand.

Working capital management is critical in capital goods, and the question about its potential impact due to higher exports was not fully addressed due to technical issues.

Asked by Darshil Jhaveri

Chinese competition and competitiveness in export markets Direct
all the countries in the world are resisting and creating barriers for Chinese products to enter their economies or their markets... which is helping Indian producers a great extent to penetrate. And grab market share and really implement that China plus one kind of a policy in favor of Indian exporting community.

Provides insight into the competitive landscape and how global trade policies are creating opportunities for Indian exporters, mitigating a key risk.

Asked by Tej Patel

Long-term vision regarding backward integration into steel production Direct
I think in the medium term we are not looking at backward integrating into steel production itself. But we definitely wish to become one of the leading and the top players in the downstream, product line of value added steel which is let's say not too capex heavy and the payback periods are quite - it's a very reasonable kind of payback period.

Clarifies the company's strategic focus on value-added downstream products rather than capital-intensive upstream steel manufacturing, aligning with a prudent capital allocation strategy.

Asked by Tej Patel

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Highlights

Manaksia Coated Metals & Industries Limited reported a robust Q1 FY26, with consolidated total income growing 29.97% year-on-year to INR 253.94 crores. Profit Before Tax (PBT) saw an impressive surge of 364.43% to INR 18.70 crores, while Net Profit increased 359.70% to INR 14.01 crores. EBITDA grew 93.36% to INR 28.62 crores, with the EBITDA margin expanding by 370 basis points to 11.27%, driven by strong demand and enhanced operational efficiency. Earnings per share improved by 253.86% to INR 1.42.

Strategic Capacity Expansion and Upgrades

The company is actively pursuing strategic expansion projects, including an upgrade of its galvanizing line to Alu-zinc technology, which will enhance capacity to 180,000 metric tons and is expected to stabilize by Q3/Q4 FY26 with 75-80% utilization. A second color coating line, adding 150,000 metric tons of capacity, is slated for commissioning by Q4 FY26, aiming for 70% utilization within one quarter. These projects are part of a total capex plan of approximately INR 150 crores, with INR 50 crores already incurred, and are expected to drive peak revenue close to INR 1,600 crores by FY27.

Export Market Dominance and Strategy

Exports contributed a record 57% to the total revenue in Q1 FY26, with export volumes soaring 166.14% and revenue climbing 182.28% year-on-year. Management expressed confidence in maintaining export revenue above 50% for the year, attributing success to long-term relationships with OEMs in Europe and the Middle East. The company leverages its port-based location on India's western coast for cost-effective export logistics and sees significant potential to grow exports further.

Alu-Zinc Technology and Market Opportunity

The company is transitioning to Alu-zinc coated steel, a premium product offering superior corrosion resistance (3 times that of regular galvanized steel) and commanding higher prices. This technology, relatively new to India, is expected to drive significant EBITDA margin expansion, potentially adding 30% to existing levels and achieving 12-13% sustainable margins at good utilization. The domestic demand for Alu-zinc is strong, fueled by infrastructure growth and government support, with key players including JSW Steel, Tata Steel, APL Apollo, and Jindal India.

Capital Structure and Funding

Manaksia Coated has strengthened its financial foundation by raising approximately INR 175 crores through preferential warrants, with INR 161.22 crores already infused. These funds have been used to reduce existing debt and support growth projects. The company aims to reduce its net debt to EBITDA ratio from 2.3x at FY25 end to 1.7x by FY26 end, with new projects expected to be funded by a mix of 70% debt and 30% equity. Approximately INR 13 crores from warrant conversion are still pending receipt.

Cost Efficiency and Sustainability Initiatives

A 7-megawatt captive solar power plant is under development in Gujarat, with an expected payback period of 2.5 years and annual savings of INR 6-7 crores. This initiative aims to reduce grid dependency, enhance cost efficiency, and lower the carbon footprint. The company also noted that pre-painted steel generates higher EBITDA per ton compared to galvanized steel, reflecting its higher value addition and contributing significantly to overall profitability.

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