Manaksia Coated

Manaksia Coated Metals & Industries Limited delivered a robust Q2 FY26, with consolidated total income growing by 27% year-on-year to ₹224 crores. This growth was driven by strong demand and improved realizations. EBITDA more than doubled to ₹29 crores, marking a 113% increase, and the EBITDA margin expanded significantly by 534 basis points to 13%. Net profit surged by 491% year-on-year to ₹14 crores, resulting in a net margin of 6%, while EPS increased by 347% to ₹1.43. The first half of FY26 also showed strong performance, with total income at ₹478 crores (up 27% YoY) and EBITDA at ₹58 crores (up 103% YoY).

The company is intentionally shifting its product mix towards higher value-added segments, particularly pre-painted steel, which contributed 92% of total sales in Q2 FY26. This focus on pre-painted steel, which offers a higher EBITDA margin per ton, is a key driver of profitability. Exports played a crucial role, contributing 85% of total sales in Q2 FY26, with export revenue growing by 151% year-on-year and export tonnage reaching a record 20,590 metric tons. Management aims to maintain export contribution upwards of 50% for the current fiscal year, selling largely to end-users (OEMs) across 43 countries.

The balance sheet showed significant improvement during H1 FY26. The interest coverage ratio improved to 3.62 from 1.89 as of March 31, 2025, reflecting higher profitability and lower finance costs. The current ratio increased to 1.67 from 1.35, and the debt-equity ratio improved to 1.19, down from 1.81 at the end of FY25. Total debt declined by 27% from ₹141.28 crores to ₹103.22 crores as of September 30, 2025, primarily due to repayment and strong cash generation.

Manaksia Coated Metals is progressing with multiple strategic projects. The aluminum zinc coating line conversion, scheduled for the current fiscal year (FY26), is expected to enhance capacity by 36% to 1,80,000 tons per annum and begin revenue generation within FY26. A second color coating line, expected to commission by early FY27, will expand coating capacity by 174% to 2,36,000 tons. Additionally, a 7-megawatt peak captive solar power plant, also targeted for early FY27, aims to offset 50-55% of grid power dependency and generate significant energy cost savings. Phase 3 expansion, including a second alu-zinc line and a cold rolling steel complex, is in the blueprint stage for FY28.

The company successfully raised ₹174.87 crores through two preferential allotments. Of this, ₹80.36 crores were collected in H1 FY26 (₹74.60 crores in Q1 and ₹5.76 crores in Q2), with a balance of ₹13.65 crores pending conversion. The proceeds from the recent fundraise of ₹134.55 crores (₹120 crores realized) are being utilized for debt reduction, higher working capital requirements, and CAPEX projects for the alu-zinc line and the second color coating line. Management is continuously evaluating options for future fundraisers to support its growth ambitions, particularly for horizontal expansion of alu-zinc capacity and backward integration.

The improvement in gross margins, from 20% to approximately 31%, is attributed to several factors. Higher capacity utilization led to a reduction in fixed costs per ton. A strategic shift from commoditized segments to more niche and customized end-uses, such as HVAC, refrigeration, and home appliances, contributed to better price realizations and margin profiles. Furthermore, the significant growth in exports, which accounted for 85% of sales in Q2 FY26, was a key contributor to the enhanced margins. The company's back-to-back business model for 75-80% of volumes helps mitigate raw material price volatility, with changes passed on to spot market customers every 15 days.