M & B Engineering Q1 FY27 earnings call

M&B Engineering reported a robust Q1 FY27, with consolidated revenue from operations growing approximately 23% year-on-year to ₹291 crores. Profit after taxes (PAT) also saw a significant increase of 22% to ₹22 crores. The company's order book remained strong, standing at ₹1,053 crores at the end of Q1 FY27, marking a 25% year-on-year growth. This strong order book provides clear visibility for sustained growth in the coming quarters^⏳.

The company's two divisions, Phenix and Proflex, both demonstrated strong growth. Proflex contributed ₹77 crores, representing 26% of the total revenue, with a 25% year-on-year growth. Phenix accounted for ₹214 crores, or 74% of the revenue, growing 22% year-on-year. Geographically, domestic revenue constituted 90% of the total at ₹263 crores, while export revenue increased to ₹28 crores, making up 10% of the overall revenue.

M&B Engineering is actively expanding its manufacturing capabilities. The brownfield expansion of the Sanand facility, adding 20,000 tons per annum to its PEB capacity (from 72,000 to 92,000 tons), is expected to be commissioned in October 2026, with benefits realized in Q3 and Q4 FY27. Additionally, the board approved a ₹30 crore investment for a new heavy structural steel processing line at Sanand, which will add 10,000 tons to the existing 12,000 tons, becoming operational by Q1 FY28. The Cheyyar plant will also see a 20,000-ton expansion by Q3 FY28, bringing total PEB and structural steel capacity to 1,54,000 tons per annum.

Despite strong revenue growth, operating EBITDA margin for Q1 FY27 was 11.4%. The company noted that continued geopolitical tensions and uncertainty in West Asia led to a sharp increase in freight costs, impacting margins. While the reduction in US Section 232 sectoral duties from 50% to 25% is a positive, the high freight costs continue to exert pressure. Management indicated that export orders, even under current high freight costs, are expected to yield around 15% EBITDA margins.

M&B Engineering remains confident in achieving a revenue growth of over 25% in FY27 and an over 20% CAGR over the next three to four years. However, due to ongoing uncertainties in cost, management has deferred providing specific margin guidance for the full year, opting to wait for one more quarter for better clarity. The company aims to improve margins on a full-year basis and expects the additional Sanand capacity to further support operating performance in H2 FY27.

Out of the net IPO proceeds of ₹259.32 crores, ₹146.69 crores (57%) have been utilized as of June 30, 2026, with ₹8.88 crores utilized in Q1 FY27. The company is actively pursuing opportunities in steel-intensive construction, particularly in India's data center expansion (a ₹12-14 billion addressable opportunity over five years) and high-rise construction. M&B's dual capability in PEB and heavy structural steel positions it well to capitalize on these emerging trends.