MSTC

MSTC delivered a strong financial performance in H1 FY26, with standalone revenue growing 9.31% year-on-year to ₹195.96 crores. This growth was primarily fueled by the flagship e-commerce segment, which saw its income increase by 18.47% to ₹146.28 crores. Despite a softening in scrap prices, the company's PBT and PAT also saw significant increases, reaching ₹125.79 crores (up 12.81%) and ₹93.47 crores (up 11.96%) respectively.

The company is actively diversifying its e-commerce offerings, securing key contracts for new platforms. Notably, MSTC has been selected by the Central Pollution Control Board (CPCB) to develop an electronic trading platform for EPR certificates, which management views as a 'game changer.' Additionally, DGFT has chosen MSTC to establish an online platform for allocating tariff rate quotas for gold bullion import, with expectations to extend this to other commodities. These initiatives are expected to drive future revenue growth, albeit with initial development costs.

MSTC is making progress in developing various software applications and platforms. The Kendriya Police Kalyan Bhandar (KPKB) software application is in its final delivery stage. The company has also launched the Upkaran portal for equipment leasing and is planning its own travel portal, initially for the government sector, aiming to be operational by FY27 Q1. These developments leverage existing infrastructure and expertise, minimizing additional CAPEX.

A key focus for MSTC is securing long-term agreements with clients to ensure sustainable business. The company signed a 30-year MoU with Syama Prasad Mookerjee Port, Kolkata, for providing e-commerce services for leasing port property. Furthermore, MSTC has expanded its state government partnerships, including agreements with Chhattisgarh for sand mining block e-auctions and Karnataka for liquor shop license auctions, demonstrating the robustness and transparency of its e-auction process.

The joint venture with M/s Mahindra Auto, MMRPL, has shown sequential improvement in Q2 FY26 but has not yet achieved profitability. Management is closely monitoring its operational aspects, anticipating long-term benefits from EPR regulations on vehicle sourcing. The scrap business, which contributes almost 50% of revenue, has faced challenges due to softening prices over several quarters, and the vehicle scrapping initiative is progressing slowly due to data and incentive issues.

For H1 FY26, consolidated PBT stood at ₹122.16 crores and PAT at ₹89.84 crores. The company's dividend policy, as per Government of India guidelines, mandates a minimum payout of 30% of PAT or 4% of net worth, whichever is higher. Management indicated that CAPEX requirements for new developments like the CPCB platform and travel portal are not capital-intensive, with priorities including server maintenance and new business ventures.