Detailed Narrative
Strong Q4 and FY25 Performance with Robust Margins
Tega Industries reported its highest ever quarterly revenue of ₹542.8 crores in Q4 FY25, marking a 6% increase over the previous year's corresponding quarter, and achieved a strong EBITDA margin of 29%. For the full fiscal year 2025, the group's total revenues reached ₹1,681.8 crores, an 11% increase compared to FY24 revenues of ₹1,514.9 crores. The annual EBITDA stood at ₹387.4 crores, maintaining a healthy 23% margin, consistent with the previous year.
Order Book Strength and Execution Outlook
As of March 31, 2025, Tega Industries holds a substantial order book of ₹1,029.2 crores, with ₹591.2 crores identified as executable within the next year. Management noted that a significant portion of the ₹120 crores NMDC order, won in June/July 2024, is slated for execution in FY26. While some consumable orders from Q4 FY25 were deferred to Q1/Q2 FY26, management clarified these are timing difference📎s and not lost orders, maintaining their firm guidance for consumable growth.
Segmental Performance and Growth Drivers
The consumable business segment contributed 85% to the group's FY25 revenues, growing 11% YoY to ₹1,430.1 crores. The equipment business, while smaller, showed strong growth, increasing 5% YoY to ₹251.7 crores in FY25 and a significant 35% YoY and 45% QoQ increase in Q4 FY25 revenue to ₹79.3 crores. Management expects the equipment business's share to grow to 20-25% of overall revenues in the future, with McNally contributing similarly as it expands globally over the next 1.5-2 years.
Strategic Capex and Project Updates
Tega Industries spent approximately ₹170 crores on fixed assets in FY25. Key capital expenditure plans include $30-35 million for the Chile project and ₹30 crores for the Dahej debottlenecking project. Crucially, all statutory approvals for the Chile project have been secured, and commercial production is now anticipated by the middle of next calendar year (2026). This expansion is expected to support robust demand from gold and copper mines.
Working Capital and Liquidity Management
The company experienced an increase in inventory and receivables in FY25, leading to weaker operating cash flow generation relative to EBITDA growth. However, management assured that Tega is a 'cash surplus company' with sufficient cash flows, expecting the realization of debtors and inventory to strengthen cash flows in subsequent quarters. Finance costs have also decreased due to debt repayment and lower interest rates, a trend expected to continue.
Market Outlook and Risk Mitigation
Management highlighted robust demand for gold and copper, driven by geopolitical tensions, central bank purchases, and declining grades for gold, and clean energy requirements for copper. While acknowledging heightened uncertainty from geopolitical tensions and supply chain issues, Tega believes it is equipped to mitigate these risks. The company also stated that tariffs in the US market would not materially impact its business, as competitors face similar conditions.