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.