Summary
BMW Industries Limited - Q3 FY26 Earnings Call Summary Friday, January 30, 2026, 4:00 PM
Event Participants
Executives 3 Harsh Bansal (Managing Director), Sanjeev Sancheti (Investor Relations, Uirtus Advisors), Vikram Kapur (Chief Financial Officer)
Analysts 3 Bhavesh (Individual Investor), Manjari (Individual Investor), Rohan Baranwal (Deep Investments)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Income | ₹162.16 crores | +9.9% YoY and +11.9% QoQ; driven by strong rebound in CRM segment dispatches. |
| Operating EBITDA | ₹38.55 crores | +6.8% YoY; reflects stable performance in conversion-based business model. |
| EBITDA Margin | 23.8% | -60 bps YoY; remains high due to current low raw material exposure in tolling model. |
| Profit After Tax (PAT) | ₹17.61 crores | +16.3% QoQ; sequential improvement on higher operating leverage. |
| Net Debt | ₹232.31 crores | Manageable levels with Net Debt/EBITDA at 1.63x and Debt/Equity at 0.3x. |
| ROCE | 10.1% | Reflects ongoing capital deployment for Bokaro project ahead of commissioning. |
| CRM Dispatches | +18.1% (QoQ) | Strong sequential rebound due to improved off-take and firm pricing. |
Geographic & Segment Commentary
- CRM Segment: Witnessed a strong recovery during the quarter with dispatches up 18.1% sequentially. Performance was supported by improved demand conditions and firm pricing from industrial customers.
- Pipes and Tubes: Current capacity utilization remains low at approximately 30% following recent expansions. Management expects to reach 60-65% utilization over the next two years as they integrate into customer supply chains and rationalize SKUs.
- Other Segments: Revenue grew 95.6% YoY to approximately ₹23.5 crores. This segment comprises smaller plants and miscellaneous revenue streams that are seeing structural improvement.
Company-Specific & Strategic Commentary
- Bokaro Greenfield Project: Achieved financial closure with a ₹500 crore debt tie-up from an SBI-led consortium (including HDFC and YES Bank). The ₹803 crore project is 70% debt-funded and situated on 45 acres of leased land in Jharkhand.
- Business Model Pivot: Transitioning from a high-margin conversion (tolling) model to an integrated downstream model. While this will introduce raw material costs (80% of revenue), it is expected to exponentially scale the top line.
- Product Diversification: The new facility will produce high-value-added products including Galvanized, Galvalume, ZAM (Zinc, Aluminum, Magnesium), and Color-coated sheets.
- Tata Steel Relationship: Reaffirmed long-term partnerships with the renewal of the TMT contract for 12 months (till Nov 2026) and ongoing multi-year CRM (5 years) and Tube (3 years) contracts.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue CAGR | ~75% (FY25-FY28) | Driven by phased commissioning of Bokaro and organic growth. |
| PAT CAGR | 35% - 40% (FY25-FY28) | Scaled volumes to offset the normalization of operating margins. |
| EBITDA Margin | ~11% by FY28 | Lower percentage margin reflects the shift to an input-intensive model. |
| PAT Margin | ~5% by FY28 | Targeted steady-state margin following full integration of Bokaro. |
| ROCE | >15% by FY28 | Expected improvement as Bokaro assets begin contributing to the bottom line. |
Risks & Constraints
| Risk | Context |
|---|---|
| Margin Normalization | Transitioning to an integrated model will bring raw material costs onto the P&L, structurally lowering EBITDA margins from ~24% to ~11%. |
| Execution Risk | The 75% CAGR guidance relies heavily on the timely commissioning and ramp-up of the Bokaro facility starting Q1 FY27. |
| Raw Material Volatility | Future model involves 80% raw material cost-to-revenue; however, proximity to Bokaro Steel Plant and Jamshedpur mitigates sourcing logistics. |
| Capacity Utilization | Pipes and Tubes segment is currently underutilized (30%); reaching the 60% target depends on customer supply chain integration. |
Q&A Highlights
Bokaro Project & Funding
- Question: What is the funding structure and interest cost for the ₹800 crore Bokaro project? (Rohan Baranwal)
- Answer: Funding is 70% debt and 30% internal accruals. ₹500 crore is already tied up at a competitive interest rate below 8% (Harsh Bansal).
- Question: When will Phase-1 commission and will it contribute immediate revenue? (Bhavesh)
- Answer: On track for April 2026 commissioning. Revenue will be “meaningful” but subject to a standard ramp-up phase through FY27 (Harsh Bansal).
Product Mix & Margins
- Question: Which products carry the highest margins? (Bhavesh)
- Answer: Color-coating (PPGI, PPGA, PP ZAM) represents the highest value addition. The plant setup allows flexibility to shift between finished products based on market deltas (Harsh Bansal).
- Question: How will you handle raw material price volatility in the new model? (Manjari)
- Answer: Exposure is limited to held inventory. The market moves in a “delta fashion” where HR coil price changes are passed through the value chain (Harsh Bansal).
Contractual Status
- Question: What is the status of the TMT contract renewal with Tata Steel? (Bhavesh)
- Answer: The contract has been renewed for 12 months. Volumes have stabilized, though at a slightly lower level than historical peaks (Harsh Bansal).
Key Takeaway
BMW Industries reported a steady Q3 FY26 with a 9.9% YoY revenue increase to ₹162.16 crores, supported by a healthy 23.8% EBITDA margin. The company is at a critical strategic pivot point, transitioning from a pure tolling/conversion player to an integrated downstream steel processor via its ₹803 crore Bokaro Greenfield project. This project has secured ₹500 crore in debt financing and is scheduled for Phase-1 commissioning in April 2026. While management cautioned that EBITDA margins will normalize to ~11% by FY28 due to the inclusion of raw material costs, they guided for a massive 75% revenue CAGR and 35-40% PAT CAGR over the next three years. The focus remains on ramping up utilization at existing pipe plants and executing the Bokaro expansion to achieve a targeted ROCE of over 15% by FY28. Management’s medium-term outlook remains aggressive, predicated on scaling volumes through high-value-added products like ZAM and color-coated sheets.
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