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    MBEL

    MBEL
    Construction·11 Nov 2025
    Management Summary

    M&B Engineering reported strong Q2 FY26 results with significant revenue growth driven by both Proflex and Phenix divisions, supported by a robust order book of Rs. 930.56 crores. While margins faced temporary pressure from forex losses and tariff absorption, the company maintains a full-year EBITDA guidance of 13% and targets 25% revenue growth to Rs. 1,225-1,250 crores, backed by ongoing capacity expansions.

    Highlights

    5
    • Consolidated revenue grew 49% YoY in Q2 FY26 to Rs. 306.85 crores and 57% YoY in H1 FY26 to Rs. 544.5 crores.

    • Outstanding order book reached Rs. 930.56 crores as of September 30, 2025, providing strong revenue visibility for 8-9 months.

    • H1 FY26 new order intake was robust at Rs. 672.20 crores, with subsequent orders including a USD 24 million export order and INR 98 crores domestic order.

    • EBITDA for Q2 FY26 stood at Rs. 36.82 crores, with a reported consolidated EBITDA margin of 12%.

    • Capacity expansion underway with 3 new mobile units for Proflex (1 operational by Dec 2025, 2 by Q1 FY27) and brownfield expansions at Sanand (Q1 FY27) and Cheyyar (FY28).

    Concerns

    3
    • Q2 FY26 margins were impacted by a foreign exchange loss of Rs. 2.15 crores (Proflex) and absorption of Rs. 2.85 crores in US export tariffs (Phenix).

    • Net working capital days increased to 79 days as of September 30, 2025, from 32 days as of March 31, 2025, primarily due to a reduction in trade creditors.

    • Domestic Phenix volumes saw a QoQ decline in Q2 FY26 due to heavy monsoon impacting site readiness.

    What Changed2

    vs Q3 FY26

    Guidance items14 → 6 (-8)Risks discussed4 → 5 (+1)

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue₹306.85 Cr+49%YoY
    2. 02H1 Consolidated Revenue₹544.5 Cr+57.0%YoY
    3. 03EBITDA₹36.82 Cr
    4. 04EBITDA Margin12%
    5. 05H1 EBITDA Margin12.9%

    Segment breakdown

    Revenue GrowthH1 Revenue GrowthSales Quantity
    Proflex Division57.0%45%366.675 lakh sq m
    Phenix Division47%61%15,809 lakh sq m
    Heatmap· 3 shared metrics

    Order Book

    high confidence

    Total Value

    ₹ 930.56 crores

    as of 2025-09-30

    quantified

    Inflow this qtr

    ₹ 394.58 crores

    Execution

    8 to 9 months to complete the total order book

    Composition

    Mix2 divisions
    • Phenix Division75.6%
    • Proflex Division24.4%

    Share of order book by division

    Pipeline

    other

    Sizable export order of USD 24 million and domestic order of INR 98 crores received after Sept 30, 2025

    Cancellations / Deferrals

    • cancelled:Loss of profit compensation for a cancelled large order from a Japanese PMC in FY23-24, booked as one-time income of Rs. 14.66 crores in Q2 FY25

    "The company has a very robust order book that provides strong visibility and will help achieve revenue targets, with execution timelines of 8-9 months for the total book."

    Source:
    Prepared remarks

    Capital allocation

    4
    medium confidence
    CategoryHeadline
    Capex

    ₹60 crores

    M&A

    Phenix Building Solutions

    acquisition · integrated · Consideration ₹NaN (undisclosed)

    M&A

    Phenix Energy Service Private Limited

    divestment · closed · Consideration ₹NaN (undisclosed)

    Liquidity

    Liquidity disclosed

    Cash flow is very comfortable despite increased working capital days due to reduction in trade creditors.

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    Export Sales
    Rs. 160 crores
    High
    Revenue
    Overall Topline Growth
    25%
    High
    Revenue
    Total Topline
    Rs. 1,225 - Rs. 1,250 crores
    High
    Profitability
    Combined EBITDA Level
    ~13%
    High
    Growth
    FY27 Growth
    20-25%
    Medium
    Working Capital
    Sustainable Net Working Capital Days
    55-60 days
    Medium

    H2 FY26 Revenue Achievement

    next quarter
    CurrentH1 revenue at Rs. 544.5 crores
    TargetH2 revenue of Rs. 675-700 crores to meet full-year target

    Why it matters

    To verify if the company can achieve its ambitious H2 revenue target, which is crucial for meeting the full-year guidance.

    So, Rs. 550 crores translates approximately 42% to 44% of the annual target that we have made, right? The remaining 55% to 60% will come in the H2 and that is a historical trend, right?

    How to verify

    key_financials.metrics[label='Consolidated Revenue']

    Risks & concerns

    5
    RiskSeverity

    US Sectoral Tariffs

    25% (Feb 2025) and 50% (May 2025) tariffs on steel/aluminum imports into US led to absorption of Rs. 2.85 crores for some Q2 export orders, impacting Phenix division margins. New orders factor in tariffs.Management acknowledged

    medium

    Rupee Devaluation

    Caused a foreign exchange loss of Rs. 2.15 crores on imports for the Proflex division in Q2 FY26.Management acknowledged

    medium

    Monsoon Impact on Domestic Execution

    Heavy monsoon in Q2 FY26 resulted in lower domestic Phenix sales/tonnage as project sites were not ready to receive material.Management acknowledged

    low

    Increased Working Capital Days

    Net working capital days increased to 79 days from 32 days due to a reduction in trade creditors (extensive payments for discounts and cyclically lower buyer's credit).Management acknowledged

    medium

    Competitive Export Market for Margins

    Arbitrage in the US market has reduced, leading to lower export EBITDAs (now higher teens vs. >20% earlier), requiring the company to be competitive on pricing.Management acknowledged

    medium

    Q&A highlights

    8

    “See, basically in our industry, because of the site conditions pertaining to the weather, 40% to 45% of the execution planned for the entire fiscal happens in H1 and the remaining, the majority part of around 60% happens in H2.”

    Analyst questioned the feasibility of achieving the full-year revenue target given the H1 performance, and management clarified the seasonal nature of their business and confirmed capacity/order book support.

    asked by Raman from Sequent Investments

    2 min read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.