GMM Pfaudler Limited (NSE: GMMPFAUDLR) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Raveen Kanabar — Manager, Corporate Finance
Tarak Patel: — Managing Director
Alexander Poempner — Chief Financial Officer
Analysts:
Sameer S. Thakur — Analyst
Presentation:
operator
Saving. It. Sam. It. Sam. It. It. Everything. It. Sam. Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 conference call of GMM Fodler Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. I now hand the conference over to Mr. Ravin Kanagara. Thank you. And over to you sir.
Raveen Kanabar — Manager, Corporate Finance
Thank you Russuya. Good evening ladies and gentlemen. A very warm welcome to all of you into the Q3 and 9 months FY26 earnings call of GMM for Limited the earning presentation was uploaded on the stock exchanges today and is also available on our website. Hope all of you had a chance. To go through it. From the management today we have with us our Managing Director Mr. Tarak Patil and our Group CFO Mr. Alexander Kaudugar. We will give you a brief overview of the performance of the company after which we will get into the Q and A. Before we begin with the overview of brief disclaimer, the presentation was uploaded on the stock exchanges and also on our website including our call discussions that will happen now contains or may have certain forward looking statements regarding our business prospects and profitability which we are subject to several risks and uncertainties. The actual results could materially differ from those in such forward looking statements.
I will now hand over the call to Mr. Taran Patel to provide you with an overview of the performance. Over to you Tarav.
Tarak Patel: — Managing Director
Thank you Ravin and good evening everybody. So as you can see we are continuing with the momentum again this quarter. It’s been a stable quarter in terms of revenue and profitability. However, it’s been a good quarter in terms of order intake. If you look at our last three quarters of this financial year, Q1, Q2 and Q3, you will see that of course order intake has been significantly higher and that obviously puts us in a much stronger position for the next financial year in terms of revenue. Our nine month revenue is up 8% year on year and our EBITDA grew by 14% on a nine month basis.
Our margins have also been stable or slightly improved over the previous same period order intake like I mentioned to you, 961 crores which was 9% up this quarter but 20% year on year and subsequently our nine month order period also saw growth of about 16%. What is also very comforting is that today our backlog stands at 2,205 crores, the highest it’s ever been, which is 27% higher than previous year. We expect Q4 to be a strong quarter in India in terms of revenue and shipment. And we also expect Q4, the momentum to continue with order intake which then hopefully will put us in a very strong position for next year with a 30% higher backlog for the big financial year.
Of course there would be both improvements and growth in revenue and in profitability as well. Having said that, the global environment continues to remain challenging as many of you will know and would have investments in chemical companies. The chemical outlook still remains quite soft and the worrying areas or the geographies for management today is Europe, which is of course slow. India continues to improve driven by investments in pharma, oil and gas, nuclear. So we have diversified there. Chemicals remain weak due to overcapacity and uncertainties in global trade. Europe, like I said, remains slow and uncertain, especially in our traditional markets of chemicals and pharma.
However, our systems business has seen significant order intake driven by increased defence spending. In Europe, American markets are recovering and seeing improvements and also with South America, Brazil, Senco and Mixpro in Brazil we are seeing growth driven by metals and minerals and rare earths and oil and gas. China continues to be challenging for us and we are now implementing cost saving measures and strategic investments to make sure that China recovery is on track. I would also like to mention here that you will see in one of the slides in our presentation that what’s also very encouraging is that now 50% of our order intake over the last nine months and the corresponding backlog comes from non traditional industries.
So when I say non traditional industries, I mean these are orders not from chemical and pharma. So as a company you can see that our diversification strategy is now gaining momentum. It’s something that we’ve been speaking on for a long time and today we are in a stronger position. We are able to show growth even in spite of the challenging conditions only because we have this diversification strategy. Lastly, I would also like to talk a little bit about two exceptional items in this quarter. One I think most of you will be very aware of, this is regarding the new Labor Code.
There is some provisions to be made as the new Labor Code got implemented in Q3. The other one time expenditure is for our facility in Germany. As you would have known, over the last few quarters we have been consolidating our cost structure across the globe in our last line business, our manufacturing footprint. This started with our shutdown of our Hyderabad facility and the land which was substituted subsequently sold off. And we will receive the proceed this month 55 crores. And then we also shut down our UK facility in Q4 of the last financial year. This continues and our block line capacity today as what we have across the world needs to be consolidated.
And the next initiative in this front is to reduce about 30 people in Germany. We have signed an agreement with the works council there that will see 30 people, 14 of them have already left this quarter and the balance 16 will leave over a year’s time and the provision for that has also been taken entirely in this quarter. I would now like to hand over the call to Alex. Alex will give you a little bit background about the financial numbers and maybe a little bit more details about these two one time impacts. Over to you Alex.
Alexander Poempner — Chief Financial Officer
Thanks a lot Tarak. Hello everyone. As already started by Tarak, I would like to say or focus especially on the two exceptional items. The first one as Tarak mentioned, due to the consolidation of our global footprint, of our global glass line setup, we started a further cost reduction improvement program at our site of Hauteller GmbH in Germany. And this resulted in a exceptional impact this quarter of 44 crores. This covers the it’s mainly severance payments for staff already left and staff which was agreed to leave now in the coming financial year. So this is a full downsizing staff reduction program to really adjust our footprint to the future requirements.
The other one time exceptional impact is coming from the new labor code in India. I assume everybody already is aware of this. Also several other companies face this. It resulted in an impact of 13 crores this quarter and this was also fully provisioned for and you see it in our income statement that said both together classified as exceptional and therefore have a one time impact on our result. I think these are the two key areas from my side I now would like to hand over back to Ravin. But yeah, probably will have further questions.
Raveen Kanabar — Manager, Corporate Finance
Thank you Alex Ruduja. You may now open the line for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sameer Thakur from Ambit Capital. Please go ahead. I’m sorry to interrupt you Mr. Sameer, but we are unable to Hear you clearly, sir.
Can you please check? Please go ahead.
Sameer S. Thakur
Yeah. So my first question is how should we think about the margins and return on capital employed for the non traditional end markets? Is it comparable to your traditional end markets or is it lower or higher? Anything on that.
Tarak Patel:
So when I say non traditional markets, you must keep in mind that these are markets that we have been serving for quite some time. So they are not new, brand new markets. You know, our heavy engineering business serves definitely non traditional markets because their markets are oil and gas, petrochemical, fertilizer and now nuclear as well. Our systems businesses serve markets like defense, space and other stuff are mixing business. So generally we feel that in terms of diversification, there are two or three things that we look at. One is of course our ability to engineer and manufacture these goods.
So that’s something that we have as a usp, as a company. So that continues. But these new verticals or these new businesses that are helping us diversify are now entering or helping us grow from non traditional industries. So most of our growth, most of our business, maybe 70% of our business maybe 80 to 24 months ago, maybe even more came from chemical and pharma. And while the chemical market kind of went down over the last couple of years, it was important for us as a company to diversify as a long term strategy. If you want to see continuous sustainable growth.
The more you diversify, the more at least the buffer that you have because all the verticals and all the industries hopefully will not go up or go down at the same time. So that’s the thought process behind the diversification. And many of our products can also be used in non traditional markets. So we’re trying to improve our penetration in the new market areas. In terms of margin profile, they remain quite similar. If anything, once we move up the value chain and we give process technology like we do with our systems business, you will see margins improving there.
Right. Again in terms of return on capital. The other thing that I would like to just mention here, that these factories and these businesses are not heavy in terms of assets. They don’t have large manufacturing sites and facilities and footprint. They are pretty much buying and assembling and putting it all together and selling it to the customer. Right. So it’s a combination and I think, I hope that kind of answers your question.
Alexander Poempner
No, no, definitely. I have to echo, I think the new businesses, they should be at least as attractive as the current ones. Regarding the roce and we gave long term ROCE guidance in our last capital markets day. We are currently not there, but we are confident that we will rank up continuously.
Tarak Patel:
Yeah. And I think as a strategy, the way I would hope people think about this is that a company that was famous and only known for glass line today has 50% of its business coming from non glass line, non pharma, non chemical. Right. So a lot of people talk about diversification, but you can see now with the orders that we have, the size of the orders that we have. So a large order in defense, close to $30 million. A large order from nuclear, close to about $15 million. Right. So these are large orders where we would not be getting these orders if we were not capable or we didn’t have the kind of capabilities to kind of support these large projects.
Right. So that shows that over time that we have diversified. And this initiative or the strategic initiative is going to be very important for us over the next few years as well.
Sameer S. Thakur
Okay, thank you. Second is, what is the reason behind this lower EBITDA margin? Sequentially, I believe Senko is margin negative. It’s not wrong. So if you can provide some details on that.
Tarak Patel:
Sorry, margin negative. Senko. No, the Senko is from.
Sameer S. Thakur
No, Accretive. Accretive? Yeah, accretive.