Summary
MSTC Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 12, 2026 11:30 A.M.
Event Participants
Executives 4 Ajay Kumar Rai (Company Secretary), Bhanu Kumar (Director Commercial), Manobendra Ghoshal (Chairman and Managing Director), Subrata Sarkar (Director of Finance)
Analysts 4 Anant (Mount Intra Finance), Deep Modi (Equirus Securities), Prashant (Individual Investor), Yash Naik (KamayaKya Wealth Management)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹250.86 crores | +12.95% YoY; growth primarily driven by the e-commerce segment following business consolidation. |
| Other Income | ₹51.81 crores | -2.92% YoY; includes interest and miscellaneous income, slightly lower than ₹53.37 crores in the previous year. |
| EBITDA | ₹199.95 crores | +9.61% YoY; growth maintained despite rising operational expenses (9-month basis). |
| Profit Before Exceptional Items | ₹192.29 crores | +9.70% YoY; reflective of core operational growth excluding one-time gains from FSNL divestment. |
| PAT (Standalone) | ₹145.89 crores | +10% YoY (adjusted); reported figure is lower than last year’s ₹335.91 crores which included ₹273.5 crores from FSNL sale. |
| PAT (Consolidated) | ₹141.21 crores | Reflects a share of loss of ₹4.68 crores from the MMRPL joint venture. |
| Employee Benefit Expenses | ₹72.91 crores | +9.04% YoY (9-month); includes a one-time cost of ₹2.38 crores due to an increase in gratuity limits. |
| Cash and Liquidity | Surplus Cash | Management noted high free cash flow generation; dividend policy remains at 30% of PAT or 4% of net worth. |
Geographic & Segment Commentary
- E-commerce Segment: Revenue grew 9.26% to ₹216.23 crores on a 9-month basis. Key drivers remain iron ore and coal auctions, but growth moderated to 4% in Q3 due to high base effects and timing of state government auctions.
- MMRPL (Joint Venture): Located in Noida (closed) and Kalyan (new), the recycling unit is seeing reducing losses (₹1.05 crore loss this quarter vs ₹1.65 crore last quarter). Performance is improving due to tighter inventory controls and increased feedstock volumes driven by OEM compliance.
- Strategic Disinvestment: The company successfully completed the divestment of its 100% subsidiary, FSNL, in the previous fiscal cycle, resulting in a significantly higher base for last year’s reported PAT.
Company-Specific & Strategic Commentary
- CPCB EPR Exchange: MSTC is developing India’s first electronic trading exchange for Extended Producer Responsibility (EPR) certificates. Five categories are operational, with three to four more categories expected; trading is slated to begin in FY 2027.
- Gold Bullion Platform: Selected by DGFT, MSTC successfully completed the first tranche of gold bullion allocation via a transparent electronic platform. Management plans to expand this methodology to other commodities like silver.
- Travel Business Launch: A new unified B2B/B2C travel booking platform is scheduled for launch in April 2026. The company is seeking entitlement from the Department of Expenditure to capture government employee travel bookings.
- Real Estate & Minerals: Successfully auctioned prime properties for HMDA and 12 limestone blocks for the Tamil Nadu government. Also conducted the first sand block allocation for Chhattisgarh using a new methodology.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Double-digit growth | Targeted for FY 2027, driven by the stabilization of the CPCB EPR exchange and travel platform. |
| EPR Exchange Revenue | Material contribution in FY 2027 | Expected to stabilize by Q2 FY 2027 after a 5-6 month gestation period for software adoption. |
| Dividend Payout | Minimum 30% PAT or 4% Net Worth | Adhering to DIPAM guidelines; Board to decide on additional surplus distribution. |
| MMRPL Profitability | Sequential improvement | Management expects the JV to reach a “positive side” in the coming quarters due to cost rationalization. |
Risks & Constraints
| Risk | Context |
|---|---|
| Growth Volatility | E-commerce growth slowed to 4% in Q3; management cautions against quarter-to-quarter analysis as revenue depends on government policy and auction timings. |
| Gestation Risks | New platforms (EPR Exchange/Travel) have a 5-6 month period where user adoption and policy refinements could delay revenue realization. |
| Joint Venture Losses | MMRPL remains loss-making, though losses are narrowing; performance is sensitive to competition from the unorganized recycling sector. |
Q&A Highlights
E-commerce Growth Deceleration
- Question: Why did e-commerce growth moderate to 4% in Q3 vs 13% in Q1? (Saurabh Ginodia)
- Answer: Q1 benefited from a spillover of sales from the previous year. Auction services are sensitive to state government factors and should be viewed on a 9-month basis where growth remains at ~10% (Bhanu Kumar).
Future Growth Drivers
- Question: What are the top three drivers for the next 24 months? (Yash Naik)
- Answer: The CPCB exchange for EPR trading is the primary new driver. Traditional segments like iron ore and coal will continue to provide the volume base (Manobendra Ghoshal/Subrata Sarkar).
Travel Platform Monetization
- Question: What is the revenue model for the new travel business? (Yash Naik)
- Answer: Revenue will come from multiple streams: platform fees per ticket, advertisement revenue, and revenue sharing. Government business requires a 4-5 month approval process from the Ministry of Finance (Bhanu Kumar).
Capital Expenditure and Assets
- Question: Why did property, plant, and equipment increase by ₹150 crores? (Prashant)
- Answer: This represents the investment in the new Corporate Office at the World Trade Center, New Delhi. This hub is intended to improve liaison with government stakeholders and centralize project management (Subrata Sarkar).
Key Takeaway
MSTC Limited maintained steady momentum in Q3 FY 2026, delivering 9.7% growth in profit before exceptional items. While reported PAT appeared lower YoY, this was due to the high base of the FSNL divestment in the previous year; on an adjusted basis, PAT grew roughly 10%. The company is transitioning toward a digital-exchange-led model, highlighted by the upcoming launch of India’s first EPR certificate trading platform and a new travel engine for government and private sectors. Operational highlights include successful gold bullion allocations for DGFT and narrowing losses at the MMRPL joint venture following the closure of the high-cost Noida unit. Management remains focused on an asset-light strategy, utilizing surplus cash for DIPAM-compliant dividends. Looking ahead, the company expects revenue to accelerate in FY 2027 as new software platforms stabilize, though it remains alert to the inherent volatility of government-driven auction timings.
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