Man Industries (India) Limited — Q3 FY25 earnings call

Call held 13 Feb 2025

Management summary

Man Industries reported a mixed Q3 FY25, with consolidated revenue declining 13% YoY to Rs. 738 crores due to export shipment delays. However, EBITDA saw healthy growth of 7% YoY to Rs. 84 crores, with margins expanding to a multi-quarter high of 11.4%. The company maintains a robust order book of Rs. 2,900 crores and a bid pipeline of Rs. 15,000 crores, expressing confidence in its FY25 and FY26 revenue guidance. New projects in Jammu and Saudi are on track for Q3 FY26 production, with significant CAPEX underway.

Highlights

  • Consolidated Q3 FY25 EBITDA grew by approximately 7% Y-o-Y and 13% Q-o-Q to Rs. 84 crores, with EBITDA margin at a multi-quarter high of 11.4%.

  • Consolidated Q3 FY25 Net profit grew by around 12% Y-o-Y and 7% Q-o-Q to Rs. 34 crores.

  • The company holds a strong order pipeline of Rs. 2,900 crores, executable within the next 6 to 12 months.

  • New projects in Jammu and Saudi are progressing in full swing and are on track to start production by Q3 FY26.

  • Successfully completed ERW plant assessment by MECON for API 5L X 70 grade and started exporting ERW pipes.

Concerns

  • Consolidated Q3 FY25 total revenue declined by 13% Y-o-Y to Rs. 738 crores, mainly due to export shipment delays on non-availability of vessels, which impacted revenue by approximately Rs. 66 crores.

  • Standalone 9M FY25 EBITDA was down by around 2% Y-o-Y to Rs. 226 crores, despite stable EBITDA margins.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹738 Cr
    YoY -13%
  • Consolidated EBITDA
    ₹84 Cr
    YoY +7% QoQ +13%
  • Consolidated EBITDA Margin
    11.4%
  • Consolidated Net Profit
    ₹34 Cr
    YoY +12% QoQ +7%

9M

  • Consolidated Revenue
    ₹2,323 Cr
    YoY -2%
  • Consolidated Net Profit
    ₹85 Cr
    YoY +5%

What they filed

Q1 FY27: revenue up 41.9%, net profit up 117.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue806 732 1,218 742 834 +3%830 +13%1,157 −5%1,053 +42%
EBITDA64 79 121 49 121 +89%128 +62%140 +16%143 +192%
Net profit32 34 68 28 37 +16%55 +62%51 −25%61 +118%
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.

Order book

high confidence

Total value

₹2,900 Cr

as of 2024-12-31 quantified

Execution

executed within the next 6 to 12 months

Composition

  • Value-added products (product)

Pipeline

other

Bid book pipeline

Cancellations & deferrals

  • deferred: Export shipment delay due to non-availability of vessels, impacting Q3 revenue by Rs. 66 crores.
The company has a strong order book and bid pipeline, indicating good future visibility and confidence in achieving revenue targets.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹150 Cr this quarter · ₹1,150 Cr (FY26) planned Rs. 790 crores from loans, balance from promoter's contribution and internal accruals.
    • New plant in Jammu (Stainless Steel) ₹550 Cr
    • New plant in Saudi ₹600 Cr
    Roughly we spent Rs. 150 crores. Our equity portion we already put in the Jammu and the disbursement now we will take because our LC exposure is already taken of more than Rs. 100 crores. So that's why now the account will be debiting. So out of Rs. 380 crores I think so the money will go very fast after two, three months once the shipment is done. ... We are tying up with the loans. As we give our guidance for the loan, I think somebody asked earlier, that's around Rs. 790 crores will be funded from the loan, balance will be from the promoter's contribution, our own contribution.
  • Debt Gross ₹135 Cr · 1.3× EBITDA
    Yes, the current debt, Mr. Darshil, the current debt is Rs. 135 crores, and we are having the cash by way of FDR, our last year balance sheet also and the current also is the position of Rs. 230 crores, so we are a surplus. ... There will be debt, the debt burden will be Rs. 390 crores for Jammu and Rs. 400 crores for Saudi what will be the guarantee. And they will borrow and there will be independent model of the business. ... Loans have not been started, both the loans are tied up, but we have not drawn anything till date. ... I am just doing a quick math. So we are talking about 1.25 net debt to EBITDA, 950 on about 780? Yes.
  • M&A Merino Shelters Acquisition · Announced
    Yes. Merino Shelters, as we already took an enabling resolution to sign the deed, etc. from shareholders, and now the deal is likely to be signed in the next 10 days. And we are in some advance discussion with our solicitor, and other money also is going to some amount in next 10 days as we execute the teal. And then accordingly we will announce the nature of the deal and everything is as per the regulation.
  • Liquidity Cash ₹230 Cr The company is in a surplus position with Rs. 230 crores in cash and FDRs.
    Yes, the current debt, Mr. Darshil, the current debt is Rs. 135 crores, and we are having the cash by way of FDR, our last year balance sheet also and the current also is the position of Rs. 230 crores, so we are a surplus.

Guidance & targets

Revenue

  • FY25 Full Year Revenue Revenue · FY25 · High confidence Rs. 3,300 crores
    Hence, we remain confident that we will meet our FY '25 full year revenue guideline of Rs. 3,300 crores.

    — R.C. Mansukhani

  • FY26 Standalone Revenue Revenue · FY26 · High confidence Rs. 4,000 crores
    And for FY '26, with current visibility and also the new project which we are planning to execute, we can achieve turnover of around Rs. 4,000 crores of top line.

    — R.C. Mansukhani

  • FY26 Consolidated Revenue Revenue · FY26 · High confidence Rs. 5,500 crores
    Total revenue which we are expecting at the consolidated level for FY '26 is Rs. 5,500 crores.

    — Sandeep Kumar Garg

  • FY27 Consolidated Revenue Revenue · FY27 · High confidence Rs. 6,000 crores plus
    And then full year '26-'27 would be our target is Rs. 6,000 crores plus.

    — R.C. Mansukhani

  • Jammu & Saudi Contribution (first six months) Revenue · FY26 (first six months) · High confidence Rs. 1,500 crores
    So, for the first six months we are expecting Rs. 1,500 crores addition from Jammu & Saudi

    — R.C. Mansukhani

  • Jammu & Saudi Contribution (full year) Revenue · FY27 · High confidence Rs. 2,000 crores plus
    and in FY27 we are anticipating Rs. 2,000 crores plus additional revenue

    — R.C. Mansukhani

Volume

  • FY26 Volume Growth Volume · FY26 · Medium confidence 20-25%
    So volume growth, because of the market is soft in few months, lasts one year. So volume growth we are anticipating around 20%, 25% more.

    — R.C. Mansukhani

Profitability

  • EBITDA Margin (Overall Average) Profitability · FY26 · Medium confidence 12%
    Because once we stabilize everything, that is why very conservative side we are estimating same EBITDA of 12% as an overall average

    — R.C. Mansukhani

  • Jammu Plant EBITDA Margin Profitability · FY26 · Medium confidence 20-25%
    like Jammu plant we are expecting EBITDA margin to be in the range of 20% to 25%.

    — Varun Mehta

What to watch in Q4 FY25

Merino Shelters deal signing

next quarter
Current Deal likely to be signed in next 10 days
Target Deal signed and announced

Why it matters

Completion of this deal is a strategic move that could impact the company's portfolio and future growth.

Yes. Merino Shelters, as we already took an enabling resolution to sign the deed, etc. from shareholders, and now the deal is likely to be signed in the next 10 days.

Risks & concerns

  • Export shipment delays

    medium

    Non-availability of vessels led to a decline in Q3 FY25 consolidated revenue by approximately Rs. 66 crores.

    Management acknowledged

  • Impact of US tariffs

    low

    Company has very little presence in the USA (2-5% of turnover), so new tariffs are not expected to have a big impact, but the degree will be examined.

    Management downplayed

Q&A highlights

8 direct
Debt levels for new projects (Jammu & Saudi) Direct
There will be debt, the debt burden will be Rs. 390 crores for Jammu and Rs. 400 crores for Saudi what will be the guarantee. And they will borrow and there will be independent model of the business. But our consolidation, we will get the benefit of the consolidation of the revenue in coming years.

Clarifies that the debt for new projects will be on the books of independent subsidiaries, with Man Industries providing guarantees, thus not directly increasing Man Industries' debt initially.

Asked by Darshil Pandya

Total CAPEX for Jammu and Saudi projects Direct
Roughly Rs. 550 crores total. ... Saudi Rs. 600 crores. ... So, 550 plus 600, Rs. 1,100-1,150 Crores of CAPEX.

Provides a clear breakdown of the significant capital expenditure planned for the new projects.

Asked by Amar Maurya

Funding mix for CAPEX Direct
We are tying up with the loans. As we give our guidance for the loan, I think somebody asked earlier, that's around Rs. 790 crores will be funded from the loan, balance will be from the promoter's contribution, our own contribution.

Details how the large CAPEX will be financed, indicating a mix of debt, internal accruals, and promoter contribution.

Asked by Amar Maurya

Status of Merino Shelters deal Direct
Yes. Merino Shelters, as we already took an enabling resolution to sign the deed, etc. from shareholders, and now the deal is likely to be signed in the next 10 days.

Provides an update on a previously discussed strategic initiative, indicating imminent progress on the deal.

Asked by Ayush Jalan

Reason for improved EBITDA margins in Q3 FY25 Direct
Mainly due to the product mix change, we have some orders which have better profit margins which is reflecting into our bottom line. ... Because this is mostly the value-added products depends on project to project, so that's why EBITDA margin has improved.

Explains the driver behind the multi-quarter high EBITDA margin, attributing it to a favorable product mix with higher-margin value-added products.

Asked by Varun Mehta

Impact of US tariffs on the company Direct
No, this USA new tariff, it is not going to impact our industry because our most of the market is in the Middle East, around 75% we have business to Middle East, export business, and the balance in India. It is not going to make impact to us because USA we do not have much presence, very little presence, maybe hardly 2%, 3%, 5% of our turnover.

Addresses a potential geopolitical risk, clarifying that the company's limited exposure to the US market minimizes the direct impact of new tariffs.

Asked by Darshil Pandya

Status of new project loans and cost of funds Direct
Loans have not been started, both the loans are tied up, but we have not drawn anything till date. We will start drawing after I think LC due payment will be required. Currently, all the investment is made from our internal resources, internal accruals that portion we have been spending on the project. ... And rate of the interest etc. you know the SOFR is 200 basis point roughly.

Indicates that while loans are tied up, the company is currently funding CAPEX through internal accruals, suggesting financial flexibility, and provides a benchmark for future cost of debt.

Asked by Harsh Nilesh

Net debt to EBITDA target for FY27 Direct
I am just doing a quick math. So we are talking about 1.25 net debt to EBITDA, 950 on about 780? Yes.

Provides a specific long-term financial leverage target, indicating management's comfort level with debt post-CAPEX completion.

Asked by Raj Mahadeviya

3 min read 6 chapters

Detailed narrative

Q3 & 9M FY25 Financial Performance Overview

Man Industries reported a consolidated revenue of Rs. 738 crores for Q3 FY25, marking a 13% year-on-year decline, primarily due to a Rs. 66 crore impact from export shipment delays. Despite this, consolidated EBITDA grew by 7% year-on-year and 13% quarter-on-quarter to Rs. 84 crores, achieving a multi-quarter high EBITDA margin of 11.4%. Net profit also saw a healthy increase of 12% year-on-year and 7% quarter-on-quarter, reaching Rs. 34 crores. For the nine-month period, consolidated revenue stood at Rs. 2,323 crores, a 2% year-on-year decline, with net profit growing 5% to Rs. 85 crores.

Robust Order Book and Future Outlook

The company maintains a strong order book of Rs. 2,900 crores, which is expected to be executed within the next 6 to 12 months. This provides significant revenue visibility. Furthermore, Man Industries boasts a substantial bid book pipeline of Rs. 15,000 crores, indicating strong potential for future order inflows. Management is confident in achieving its FY25 full-year revenue guideline of Rs. 3,300 crores and projects standalone revenue of Rs. 4,000 crores for FY26, with consolidated revenue targeted at Rs. 5,500 crores for FY26 and over Rs. 6,000 crores for FY27.

New Projects in Jammu and Saudi Arabia

Man Industries' new projects in Jammu (stainless steel) and Saudi Arabia are progressing as planned. The Jammu project, with a total CAPEX of approximately Rs. 550 crores, is expected to commence full production from October onwards in Q3 FY26. The Saudi project, involving a CAPEX of Rs. 600 crores, is also on track to start operations within six months, targeting Q3 FY26. These projects are anticipated to contribute Rs. 1,500 crores in the first six months of FY26 and over Rs. 2,000 crores annually by FY27.

Capital Expenditure and Funding Strategy

The total CAPEX for the new Jammu and Saudi projects is estimated to be between Rs. 1,100-1,150 crores, with approximately Rs. 150 crores already spent. The company plans to fund Rs. 790 crores through loans, with the remaining balance coming from promoter contributions and internal accruals. While loans for these projects are tied up, no funds have been drawn yet, as current investments are being made from internal resources. The company currently holds Rs. 230 crores in cash and FDRs, indicating a surplus liquidity position.

EBITDA Margin Improvement and Product Mix

The improvement in Q3 FY25 consolidated EBITDA margin to 11.4% was primarily attributed to a favorable product mix, with a higher proportion of value-added products carrying better profit margins. Management anticipates maintaining an average EBITDA margin of 12% for FY26. Specifically, the Jammu plant, focusing on stainless steel pipes, is projected to achieve an even higher EBITDA margin in the range of 20-25% once it stabilizes production.

Merino Shelters Deal Update

The company provided an update on Merino Shelters, stating that an enabling resolution for the deal was passed by shareholders. The deal is now expected to be signed within the next 10 days, with further details to be announced as per regulatory requirements. This indicates progress on a previously discussed strategic initiative.

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