Detailed Narrative
Strong Revenue Growth and H1 Performance
M&B Engineering reported robust financial performance in Q2 FY26, with consolidated revenues growing 49% YoY to Rs. 306.85 crores. H1 FY26 revenues also saw a significant 57% YoY increase, reaching Rs. 544.5 crores, driven by strong growth in both the Proflex Roofing (57% YoY Q2) and Phenix Pre-engineered Building (47% YoY Q2) divisions. This performance positions the company to achieve its full-year revenue target of Rs. 1,225-1,250 crores, representing a 25% growth.
Robust Order Book and Future Visibility
The company's outstanding order book stood at a healthy Rs. 930.56 crores as of September 30, 2025, with Phenix contributing Rs. 703.51 crores and Proflex Rs. 227.05 crores. New order intake for H1 FY26 was Rs. 672.20 crores, further bolstered by subsequent orders including a USD 24 million export order and INR 98 crores domestic order. Management indicated that the current order book provides 8-9 months of execution visibility, with PEB projects typically taking 6-8 months and Proflex 3-5 months.
Margin Pressures and Management Actions
Q2 FY26 EBITDA margins, reported at 12%, faced pressure from a Rs. 2.15 crores foreign exchange loss on Proflex imports due to rupee devaluation and the absorption of Rs. 2.85 crores in US export tariffs for Phenix. These tariffs, which increased from 25% to 50%, impacted earlier negotiated orders. Despite these headwinds, management expects full-year EBITDA to be around 13%, with export margins remaining in the higher teens, as new export orders have factored in the tariff impacts.
Strategic Capacity Expansion
To meet increasing demand, M&B Engineering is actively expanding its capacity. Three new mobile units for the Proflex division are being added, with one from UAE becoming operational by December 2025 and two from the US by Q1 FY27, each adding 1 lakh sq m per annum. Additionally, brownfield expansions are planned for the Sanand plant (20,000 MTPA by Q1 FY27) and Cheyyar plant (20,000 MTPA by FY28), which will increase Cheyyar's capacity to 52,000 tons.
Working Capital and Liquidity Management
Net working capital days increased to 79 days as of September 30, 2025, from 32 days in March 2025, primarily due to a reduction in trade creditors resulting from extensive payments for discounts. Management stated that cash flow remains comfortable and aims for a sustainable working capital cycle of 55-60 days. The company's CAPEX for FY26 is projected at approximately Rs. 60 crores, with another Rs. 60-70 crores planned for FY27.
Market Dynamics and Segment Performance
The roofing segment (Proflex) is experiencing strong tailwinds from railways, warehousing, and SME sectors, with order book increasing 150% over recent months. The Phenix division saw significant export growth in Q2, contributing Rs. 54 crores, though domestic volumes were affected by heavy monsoon. The company continues to focus on complex, higher-value projects in India, which contribute to better realizations compared to peers.