Mold-Tek Technologies Limited

Mold-Tek Technologies reported a robust Q3 FY26, with profits increasing 6x compared to Q3 FY25. The company also saw a 20.2% improvement in performance quarter-on-quarter. The newly acquired subsidiary, Beryl, contributed $137,000 (INR 1.25 crores) to the bottom line from its two months of operation in November and December, though this was reduced to INR 20 lakhs after accounting for acquisition-related write-offs.

The acquisition of Beryl marks a strategic step, bringing 40 American employees and 15 years of experience in Florida. Beryl, which had a top line of $5.5 million last year, is expected to cross $6 million this year, adding 30% to Mold-Tek's top line. The integration involves outsourcing half of Beryl's design work to India, which is projected to boost Beryl's EBITDA margin from 8-10% to 30-35% within a year due to significant cost savings. Shares worth $0.5 million are also being issued to Beryl's CEO, Richard Leon, to ensure his long-term commitment.

The company is undergoing a strategic reduction of its automotive team size from 160 to 60 due to 'rough weather' and 'low traction' in the global automotive industry. The affected personnel are being retrained for poles, towers, and transmission lines, where demand is improving. This restructuring, expected to be completed by April 2026, aims to enhance cost control and efficiency. The MES division is also targeted to turn profitable, potentially adding INR 6-7 crores to the bottom line by pruning its losses.

Mold-Tek's civil engineering services, which account for 95-98% of its civil work, are a key growth driver. The company is actively involved in data center projects, receiving new orders every month or quarter. These projects are expected to contribute $2-2.5 million in top line growth from the civil side and $0.7-1 million from the mechanical side annually. Overall, civil engineering services are projected to grow at least 20% in the next financial year, driven by increased demand for substations, transmission lines, and poles related to data center construction.

Management projects a full-year FY26 revenue of INR 175-180 crores. For FY27, the company aims for a top line of INR 225-240 crores, combining standalone growth and Beryl's contribution. Over the next 3-5 years, Mold-Tek targets a 20-25% CAGR on the top line. The overall EBITDA margin is expected to reach 25%, with a minimum target of over 20%, driven by increased revenue, cost controls, and improved margins from Beryl.

The company is retaining its cash reserves for future acquisitions and the construction of its own campus in Nashik, which is expected to save INR 2-2.5 crores in annual rental costs. A share buyback is not currently being considered. The issuance of $0.5 million worth of shares to Beryl's CEO, Richard Leon, is underway, with a minimum 3-year lock-in period to ensure his continued service and commitment to Mold-Tek.

The company acknowledges past uncertainties in the US construction market during the first half of the year, which led to project delays, but notes a recent pick-up in civil project wins. The automotive industry's 'rough patch' and 'low traction' are impacting the BIW division, leading to strategic downsizing. Clarity on tariffs (now at 18%) is expected to revive the Interarch business, which was previously on hold, potentially adding hundreds of thousands of dollars to the bottom line.