Summary
Interarch Building Solutions Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 4:00 PM
Event Participants
Executives 4 Anil Kumar Chandani (President, Corporate Finance and Strategy), Arvind Nanda (Managing Director), Manish Garg (CEO), Pushpendra Kumar Bansal (CFO)
Analysts 9 Deepashri Joshi, Devang Patel, Nikhil Purohit, Nishant Sharma, Raghav Maheshwari, Rahul Kumar, Rajat Baldewa, Raman K.V., Shubhankar Gupta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹522 crores | +43.7% YoY; driven by strong volume growth and execution of high-value manufacturing orders. |
| Sales Volume | 44,948 tons | +43.8% YoY; reflective of high capacity utilization nearing 90% across existing plants. |
| Order Book | ₹1,685 crores | +30% YoY; provides ~9-10 months of revenue visibility; includes new sectors like semiconductors and data centers. |
| Net Working Capital | 34 days | Maintained through tight operational controls despite longer cycle times for large EPC-style contracts. |
| Cash Balance | ₹200+ crores | Strong liquidity position with zero debt; board recently approved ₹100 crore QIP for capacity acceleration. |
| Capex (9M FY26) | ₹120 crores | Primarily utilized for Phase 1 of the New Gujarat plant and AP Heavy Structure facility. |
Geographic & Segment Commentary
- Manufacturing & Industrial: Remains the primary growth driver with significant orders from JSW JFE for specialized steelmaking and major semiconductor units for Micron/Tata in Sanand and Guwahati.
- Data Centers & Institutional: Emerging high-value segment representing ~15% of the current order pipeline; recently secured a ground+16 hotel project and an Encalm lounge contract.
- Heavy Steel Structures (HSS): Strategic focus on complex, high-rise, and large-span buildings; expanding capacity to 45,000 MTPA to compete as a Tier-1 player against site fabrication and imports.
- International Markets: Expanding footprint through the Moletek partnership; secured new orders from Myanmar and Ghana with active bidding in North America (USA/Canada).
Company-Specific & Strategic Commentary
- Capacity Expansion Acceleration: Board approved a ₹100 crore QIP to prepone “Phase 2” expansions by one year; aims to reach 240,000 MTPA PEB and 45,000 MTPA HSS capacity by early FY28.
- Market Positioning: Management emphasizes transition from a “fabricator” to a “capital goods” provider, offering a one-stop-shop for design, engineering, and project management.
- Value Engineering & Internal Efficiency: Focusing on waste/scrap management and improved procurement strategies to offset competitive pricing pressures and maintain margins near 9%.
- Sector Diversification: Moving beyond traditional warehouses into EV battery plants, semiconductor fabs, and multi-story steel buildings where speed of execution commands a premium.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY26) | ~₹1,900 crores | Revised upward from original target of ₹1,720 crores due to faster capacity ramp-up. |
| Revenue (FY27/28) | ₹2,500 - ₹3,500 crores | Target of ₹2,500cr by FY28 remains firm; new capacity could potentially push this to ₹3,500cr at full utilization. |
| Growth (FY27) | 12% - 15% | Lower percentage growth expected due to the high base effect of FY26, though absolute volume remains high. |
| HSS Completion | Q3 FY27 | Phase 2 of the Andhra Pradesh heavy structure plant targeted for completion by December 2026. |
Risks & Constraints
| Risk | Context |
|---|---|
| Steel Price Volatility | Management mitigates price risk by maintaining 2 months of physical inventory and 2 months of forward bookings with suppliers, effectively hedging 4 months of production. |
| Competitive Intensity | Increasing competition from listed peers and Tier-2 players; Interarch relies on its 43-year execution history and specialized engineering to defend market share. |
| Execution Lag | Rapid capacity expansion requires simultaneous scaling of design engineering and project management teams; any lag in hiring could delay order fulfillment. |
Q&A Highlights
Order Book Momentum
- Question: Why does the order book growth (3% QoQ) look muted compared to peers? (Rajat Baldewa)
- Answer: Order book is healthy but looks muted relative to sales because we executed ₹160 crores more in sales this quarter than last year. We cannot take orders beyond 9-10 months to ensure we meet client schedules. (Arvind Nanda)
Product Mix & High-Rise
- Question: Can you elaborate on the ground+16 building and data center capabilities? (Manish Garg)
- Answer: We are executing a 16-story hotel and have a history with data centers like Iron Mountain. 15% of our pipeline is now multi-story institutional/commercial buildings. (Manish Garg)
QIP Rationale
- Question: Why raise ₹100 crores through QIP when you have ₹200 crores cash? (Vishal Mehta)
- Answer: The QIP is to prepone the second phase of Gujarat and AP plants by 12 months. We want to be a serious player in Heavy Structures with 45,000 tons capacity today, rather than waiting for internal accruals in FY28. (Arvind Nanda)
Margin Outlook
- Question: Will margins improve with operational leverage as you scale? (Nishant Sharma)
- Answer: Leverage is offset by expansion costs into new sales teams and heavy structure capabilities. We expect margins to remain stable at current levels; any upside will come from internal efficiencies and exports. (Arvind Nanda)
Key Takeaway
Interarch Building Solutions delivered a robust Q3 FY26, with revenue growing 44% YoY to ₹522 crores, significantly outpacing its original annual guidance. The company is operating at near-peak capacity, prompting a strategic decision to accelerate its Phase 2 expansion via a ₹100 crore QIP. This move intends to increase PEB capacity to 240,000 MTPA and Heavy Steel Structure (HSS) capacity to 45,000 MTPA by early FY28, positioning Interarch to capture high-value demand in the semiconductor, data center, and high-rise commercial sectors. While the company maintains a zero-debt balance sheet and a healthy 34-day working capital cycle, management remains cautious regarding competitive pricing, focusing instead on internal productivity and export growth to sustain 9% margins. Looking ahead, Interarch has revised its FY26 revenue expectation to ₹1,900 crores and remains on track to surpass its long-term target of ₹2,500 crores by FY28.
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