M & B Engineering Limited

M&B Engineering reported a strong Q3 FY26, with revenue from operations growing 7% YoY to INR352 crores. For the nine-month period, revenue surged 33% YoY to INR896 crores. Q3 EBITDA saw a healthy 30% YoY growth to INR44 crores, with margins expanding to 12.4% from 10.2% in Q3FY25. Nine-month EBITDA grew 26% to INR114 crores, though the margin slightly compressed to 12.7% from 13.5% in 9MFY25. PAT for Q3 increased 44% to INR25 crores, and for 9M, it grew 35% to INR66 crores.

The unexecuted order book stood at INR1,059 crores as of December 31, 2025, marking a 38% YoY increase. The Proflex division accounts for 23% (INR240 crores) and Phenix for 77% (INR818 crores), with Phenix export orders contributing INR316 crores. Order inflows during Q3 FY26 were particularly strong at INR480 crores, an 86% YoY increase, including the single largest export order of INR212 crores from the United States. The current order book is executable over the next 8-10 months, with an unbuilt export order book of INR280-300 crores projected for FY27.

The company's international business continues to scale well, with consolidated export sales during Q3 FY26 at INR63.17 crores and 9M exports at INR119.95 crores, a 107% YoY growth. North America remains a key growth driver, supported by the Sanand PEB plant's AISC certification, which is a prerequisite for the US market, and CWB approval for Canada. The company is also initiating the approval process for its Sanand plant for entry into the EU market and plans to initiate AISC certification for the Cheyyar plant in Q2/Q3 FY27, positioning it for deeper presence across North America and Europe.

M&B Engineering is actively expanding its capacity to meet growing demand. INR12 crores of capital expenditure was incurred in 9MFY26 for augmentation and operational strengthening. The Sanand plant expansion, adding 20,000 tons of capacity, is underway and targeted to be operational by Q2 FY27. A new Proflex unit from UAE was commissioned in January 2026, with two more units from the US expected in Q1 FY27, which will increase Proflex's installed capacity by approximately 3 lakh square meters per annum. The Cheyyar plant is expected to reach 70-75% utilization next year, with overall utilization projected at 65-70%.

While the domestic PEB order book saw a slight dip from INR580 crores in Q2 to INR500 crores in Q3, management clarified this was due to capacity allocation for large export orders, and the overall domestic order book remains strong. The company sees a significant opportunity in the Indian railways sector, with a total addressable market of 2-2.25 crore square meters for projects like RUBs, Vande Bharat depots, and line sheds. Current railway-related inquiries are substantial, ranging from 5-5.5 lakh square meters, indicating a robust pipeline for future growth, though execution takes time.

Beyond traditional sectors, the company is witnessing incremental demand from automotive, large data centers, international defense, EMS manufacturing, renewable energy, and semiconductor projects (e.g., Tata Dholera). The shift from concrete to steel in new-age constructions, particularly for data centers by international companies, presents a significant growth avenue. Despite increasing competition and capacity additions in the industry, management believes there is enough work for everyone, and their two decades of experience and execution track record provide a competitive edge.

Out of the net IPO proceeds of INR259.32 crores, INR130.31 crores (50%) have been utilized as of December 31, 2025, with INR2.77 crores utilized during Q3 FY26. The remaining INR120 crores from IPO proceeds are earmarked for ongoing capex, including INR15-20 crores in Q4 FY26 and approximately INR80 crores in FY27 for Phase 1 completion and Phase 2 initiation. The company's long-term vision includes building 300,000 tons of PEB capacity across three plants within the next 3-4 years, with exports contributing 20-25% and maintaining Proflex's 75% market share.