Summary
M&B Engineering Limited - Q3 FY26 Earnings Call Summary Monday, February 09, 2026 5:00 P.M.
Event Participants
Executives 4 Chirag Patel (Joint Managing Director), Keyur Shah (Chief Financial Officer), Malav Patel (Joint Managing Director), Sanjay Majmudar (Director)
Analysts 8 Aasim (DAM Capital), Aditya Soma (Ambit Wealth PMS), Aniket Madhwani (Steptrade Capital), Bhavya Dedhia (Kriis), Gaurav Shukla (Finvestors), Hitesh (Abakkus Asset Managers), Raj Sarraf (Finvestors), Shashi Kartik (Brighter Mind Equity Advisors), Vaibhav Shah (Equirus Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹352 crores | +7% YoY; Highest ever quarterly revenue driven by strong export traction. |
| EBITDA | ₹44 crores | +30% YoY; Growth supported by operational efficiencies and export mix. |
| EBITDA Margin | 12.4% | +220 bps YoY; Management targets ~12.75% for full year FY26. |
| Profit After Tax (PAT) | ₹25 crores | +44% YoY; Strong bottom-line growth outstripping revenue growth. |
| Unexecuted Order Book | ₹1,059 crores | +38% YoY; Comprises Phenix (77%) and Proflex (23%) divisions. |
| Export Sales (Q3) | ₹63.17 crores | Significant scale-up with North America as the primary growth driver. |
| Order Inflow (Q3) | ₹480 crores | +86% YoY; Includes a landmark single export order of ₹212 crores. |
| Phenix Volume | 20,228 MT | +4.5% YoY; Current capacity utilization at Sanand is 75%+. |
| Proflex Volume | 3,80,000 sqm | +10.8% YoY; Capacity expanding via new units from UAE and US. |
Geographic & Segment Commentary
- Phenix Division (PEB): Revenue driven by high-value international projects and robust domestic demand. The division secured its largest-ever export order of ₹212 crores from the US; Sanand plant is currently the only AISC and CWB certified facility in India.
- Proflex Division (Self-Supported Roofing): Maintained dominant 75% market share with significant opportunities identified in Indian Railways (RUBs and Vande Bharat depots). A new unit from UAE was commissioned in Jan 2026, with two more from the US expected in Q1 FY27.
- North America: Focused on the US Eastern Seaboard and Canada; while sectoral tariffs on steel (50%) remain a challenge, price arbitrage still favors Indian exports over local US manufacturing. Management is expanding the marketing network on the US West Coast via upcoming AISC certification for the Cheyyar plant.
Company-Specific & Strategic Commentary
- Capacity Expansion: Increasing PEB capacity by 40,000 MTPA total; 20,000 MT at Sanand (operational Q2 FY27) and 20,000 MT at Cheyyar (operational Q1/Q2 FY28) to reach a 3,00,000 MT target in 3-4 years.
- Strategic Sourcing: Actively diversifying the Proflex fleet by importing specialized manufacturing units from UAE and USA to increase installed capacity by 3 lakh square meters per annum.
- Market Positioning: Evaluating a third domestic plant in North India (near Lucknow/UP) to optimize logistics for the North and East Indian markets, where shipping from Gujarat or Tamil Nadu is currently unviable.
- Certification Advantage: Leveraging AISC and CWB certifications as a high entry barrier to the North American market; initiating EU market entry approvals following India-EU trade understandings.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Revenue | ₹1,250 crores | Confidence backed by strong Q4 domestic and export execution schedules. |
| FY26 EBITDA Margin | ~12.75% | Expected to be supported by a higher-margin sales mix in Q4. |
| FY27 Growth | Upper-Teen Growth | Directional guidance based on ₹280-300cr export carry-forward and new capacities. |
| Long-term Capacity | 3,00,000 MTPA | Targeted within 3-4 years across three plants to capture domestic/export growth. |
Risks & Constraints
| Risk | Context |
|---|---|
| Capacity Constraints | Sanand plant is currently “chock-a-block” at 75%+ utilization, limiting the ability to take simultaneous large domestic and export orders until Q2 FY27 expansion. |
| Tariff Volatility | 50% sectoral tariffs on steel in the US remain intact despite reciprocal tariff reductions; management must absorb some costs to maintain price competitiveness. |
| Logistics Costs | High transport costs limit the Cheyyar plant’s domestic reach to a 1,000km radius, making Northern/Eastern Indian projects economically unviable from existing facilities. |
Q&A Highlights
Order Strategy & Capacity
- Question: Why has the domestic order book dropped recently? (Aasim, DAM Capital)
- Answer: It is a conscious allocation choice; with Sanand at full capacity, the company must balance limited slots between the ₹212cr US order and domestic projects to ensure 9-month delivery cycles are met. (Malav Patel/Keyur Shah)
US Market & Tariffs
- Question: Does the recent reduction in reciprocal tariffs help margins? (Aditya Soma, Ambit Wealth)
- Answer: No, the reduction was product-specific; “sectoral tariffs” on steel remain at 50%. However, the trade deal improves overall investment sentiment in the US, which indirectly boosts inquiry levels. (Malav Patel)
Regional Expansion
- Question: Why not get all certifications for the Cheyyar plant? (Saumil Mehta, Kotak Mutual Fund)
- Answer: AISC certification is being initiated for Cheyyar to target the US West Coast via Pacific routes; CWB (Canada) is currently kept at Sanand as the primary Canadian market is on the Eastern Seaboard. (Chirag Patel)
Margin Outlook
- Question: Why did gross margins decline sequentially in Q3? (Hitesh, Abakkus)
- Answer: Q3 had a higher proportion of exports where tariffs were absorbed to retain the US customer base; Q4 is expected to see a significant margin rebound due to a better product and dispatch mix. (Sanjay Majmudar)
Key Takeaway
M&B Engineering Limited delivered a record performance in Q3 FY26, with nine-month revenues growing 33% YoY to ₹896 crores and EBITDA margins expanding to 12.4%. The company is successfully pivoting toward high-value international markets, evidenced by a 107% surge in 9M export revenue and a landmark ₹212 crore US order. Strategically, the firm is addressing its current “chock-a-block” capacity utilization at Sanand through a 40,000 MTPA expansion plan and the evaluation of a third plant in North India to capture untapped regional demand. While US sectoral tariffs currently necessitate some margin absorption, management remains confident in achieving a 12.75% EBITDA margin for FY26. Looking ahead, the company is positioned for upper-teen growth in FY27, supported by a robust ₹1,059 crore total order book and expanding presence in the US, Canada, and Indian Railway infrastructure sectors.
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