Bmw Industries Ltd (NSE: BMW) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
Sanjeev Sancheti — Investor Relations
Harsh Bansal — Managing Director
Analysts:
Unidentified Participant
Rohan Baranwal — Analyst
Ronak Ostwal — Analyst
Madhur Rathi — Analyst
Presentation:
operator
Ladies and gentlemen, welcome to BMW Industries Limited Q4FY24 earnings conference call hosted by Arihant Capital Market Limited. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions at the end of the presentation. Should we need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Rohan Barinwal from Arihant Capital Markets Limited. Thank you. And over to you sir.
Rohan Baranwal — Analyst
Thank you. Good afternoon everyone and welcome to the Q4FY25 earnings conference call of BMW Industries Limited. Today from the management side we have Mr. Harsh Bunsen, the Managing Director, Mr. Vikram Kapoor, the CFO and the Company Secretary, Mr. R.K. singh, VP, VP Finance and Accounts and Mr. Sanjeev Sanchetti, the Investor relation from Eurates Advisors. Without further delay, we’ll hand over the call over to Mr. Sanjeev. Thank you. And over to you sir.
Sanjeev Sancheti — Investor Relations
Thank you Rohan. Good afternoon to all the participants. Before I hand over the call to Mr. Hajj Bansal for the opening remarks, I would like to draw your attention to the Safe harbor statement in the earning presentation. I request each one of you to kindly go through the presentation either now or before the Q and A starts so that you are well aware of the same. Request you to go through the safe harbor statement very carefully. Over to you Mr. Bansal.
Harsh Bansal — Managing Director
Good afternoon everyone. Thank you so much sir and welcome to our quarter four FY25 earnings call. I hope I am audible. Thank you for joining us and for your continued support in the company. Today I will walk you through the key highlights of our business operational and financial performance for the quarter. I will also provide a brief overview of our business model and strategic direction. BMW Industries is primarily engaged in value addition of semi finished steel products. A model that offers more margin stability and helps us navigate the inherent volatility of the steel sector. This focus has enabled us to maintain steady cash flows, enhanced operational resilience and effectively manage external risks.
Our long standing customer relationships spanning over three decades are a testament of the consistency and reliability of our offering. We differentiate ourselves through the integrated service model covering the full value chain strengthened by our strategic proximity to key customers and a dedicated long haul fleet. This structure improves our responsiveness and execution allowing us to deliver timely cost effective solutions. FY25 marks a pivotal year in our evolution shaped by several strategic developments that will influence our path forward. First, we successfully renewed our long term contracts with our key customers, extending it through FY29. This reaffirms the trust placed in us and our role as a dependable partner in the steel ecosystem.
In addition to this, we have reaffirmed our commitment to the growth in the tube segment and followed it up with further capital outlay. As was stated in the Quarter 3 FY25 earnings call, in order to rationalize our operations, we had mutually agreed to short close the contract for the small TMT production facility. Operating the facility at persistently low utilization levels due to inconsistent raw material supply from the customer was financially unavailable in the long run. Consequently, in consultation with the customer, the unit was decommissioned. Lastly, in a decisive step, the company has initiated a greenfield investment in Bukaro focused on downstream processing and manufacturing of coated and plated steel with a total investment of 803 crores over the next 24 months.
Phase one of the facility is expected to be operational by the end of FY26. We are also proud to be qualified under the government of India’s PLI 1.1 scheme for this investment. These milestones reflect a broader transformation at BMW industries. Historically rooted in value added steep conversion, we are now expanding further across the value chain. Combining our core capabilities with proprietary downstream initiatives will enable your company to be more agile, integrated and future ready. This transition, while gradual, reflects our commitment to long term sustainable growth through strategic foresight, disciplined execution and prudent capital allocation. Before we move to the Q and A, a brief snapshot of our financial performance in quarter four.
FY25 operational revenue stood at 157 crore reflecting a 14.4% year on year growth. For the full year revenue reached 629 crores, up 5.1% from the previous year. Operating EBITDA for the quarter was 33 crores with a margin of 21.2%. On a full year basis, operating EBITDA was 147 crores with a margin of 23.4%. I would like to clarify that the moderation in our operating EBITDA margin this quarter is not indicative of a decline in margins or efficiency. The decline in operating EBITDA margin from 24.5% in quarter 3 FY25 to 21.2% in quarter 4 is primarily due to a revenue of 12.5 crore from HRCR GP Coil Trading.
This activity was undertaken to gain market insights as part of our preparation for the upcoming Bukaru project and generated negligible margins excluding the impact of this training activity, the adjusted operating EBITDA margin from our core business was would have been approximately 23%. The adjusted core business revenue excluding the trading activity would have been 145 crores, a decline of around 2% quarter on quarter. Accordingly, the 1.5% drop in adjusted operating EBITDA margin is largely attributable to fixed expenses being spread over a lower revenue base. We reported a profit after tax of 17.6 crores for the quarter, translating to a PAT margin of 10.9% for FY25.
PAD stood at 75 crores, resulting in a margin of 11.8%. We are also delighted to announce that the Board has recommended a final dividend of 0.43 rupees per share, subject to shareholder approval. Net debt as of March 25 stood at 120 crores, up from 99 crores in FY24, primarily driven by an increase in long term borrowings to support ongoing capacity expansion. Notably, our cash conversion cycle improved significantly to 56 days in March 25 from 96 days in March 24. This improvement was driven by disciplined working capital management, specifically more efficient inventory utilization aligned with our ongoing capacity expansion and a sharper focus on maintaining lower trade receivables.
As previously indicated, we are pleased to share our medium term guidance. Over the next three fiscals, we anticipate consolidated revenue to grow at a CAGR of approximately 75% driven by the failed commissioning of the Bukaro Greenfield project and our organic growth operating EBITDA is expected to grow at a CAGR of 45% over the same period with the operating EBITDA margin stabilizing at 11% by FY28. As we progressively integrate the new and existing business lines, it is important to contextualize our margin outlook within the evolution of our revenue model. Historically, our conversion business model has delivered operating EBITDA margins in the mid-20s going to very limited raw material exposure.
With the transition to an integrated downstream steel processing model, our cost structure will change. Steel inputs will now form a part of our cost structure, resulting in raw material costs comprising over 80% of the revenue. Accordingly, consolidated operating EBITDA margins will moderate as the legacy business blends with a more input intensive model. However, this should not be viewed as a deterioration in performance, rather it reflects a conscious pivot towards scaling volumes, deepening the value chain integration, expanding our market reach and enhancing stakeholder value. We would encourage you to interpret margin trends alongside absolute value creation.
While margins may normalize, the top line is set to expand materially and PAD is expected to grow at a robust 40% CAGR over the next three years with a PAT margin expected to stabilize at around 5% by FY28, resulting in a return on capital employed of over 18%. In a sense, the evolution in margin reflects a stronger, more diversified and scalable business model. The focus therefore will be on long term growth, cash flow, resilience and incremental value unlocking. With that, I would now like to open the floor for sessions. Over to you Rohan.
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 their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Reminder to all the participants, you may press STAR and one to ask questions. The first question is from the line of Jeef Mehta, an individual investor. Please go ahead.
Unidentified Participant
Hello.
Rohan Baranwal
Hi Mehta sir.
Unidentified Participant
Hi sir. Am I audible? Very good afternoon sir. Firstly sir, what I believe is 100% of our revenue comes from the secondary steel servicing. Am I correct with respect to that statement?
Rohan Baranwal
Largely. Not 100 but largely yes.
Unidentified Participant
Okay, so just wanted to understand the trading component. The trading component is prevalent in this quarter only. Or it was in the quarter 1, 2, 3 as well.
Rohan Baranwal
No, it was in this quarter only.
Unidentified Participant
Okay sir. So going forward it would be matlab in the Next, let’s say FY26. How many quarters we can see the trading revenue versus before we start the actual production.
Harsh Bansal
I’m not, I don’t think I can give you a Paka answer on that. But not more than one quarter for sure.
Unidentified Participant
Got it sir. And sir, like with respect to our guidance, let’s say a 75% CAGR of top line over the next three fiscals. I just wanted to understand that it would be a consecutive like FY26V on the 75% FY27 another 75% or all the revenue will start coming from SY2829 itself as the capacity, you know.
Rohan Baranwal
Expansion. So it will happen staggered. We are doing like the first phase is only the color coded segment. So what is happening is we are starting with the highest value add and going backwards. Right. As we expand we are talking of a stagger here. So the revenue growth will be staggered over the next three years as will be the expansion.
Unidentified Participant
Got it. So the Bukaro extension is in FY26.
Harsh Bansal
If I’m not so method the expansion will happen over the next 24 months. The reason why we have given a guidance up to FY28 is because that will be the first year of full operations and so you will have certain plants coming online in FY25 certain more. Sorry, FY26 certain more in FY27 and we expect the plant to operate in fully commissioned mode in FY28 in a stabilized mode and that is why we have given a guidance of up to FY28.
Unidentified Participant
Okay, so have we purchased the land for the for those capex?
Rohan Baranwal
We are way beyond that. We also got the consent to establish and everything at a substantially advanced beyond that.
Unidentified Participant
Okay sir, so what we are seeing is we are expecting a set turn of approximately 4. However the PAT margins will contract to 5%. So won’t it make our business a lot commoditized based on the raw material price fluctuation?
Sanjeev Sancheti
Like we are not really. I’ll tell you why we are not getting into the upstream production of steel. It is all downstream and highly value added services which we are offering the product. So we are not going to be. Of course our omni cost is becoming an input which hitherto has not been an input but beyond that I don’t see to be a significant fluctuation and I’ll seek.
Rohan Baranwal
I didn’t quite Madhu Just to further clarify to what Sanjeev said in this sector most of the input variation is transferable to the customers so there is very little component that one has to absorb when you’re talking about value added.
Unidentified Participant
Got it. So we are aligned with all the tailwinds in the steel sector with respect to the government imposing let’s say duty on China. So is it in the line with the tailwind and the pli? Of course is the government announced. So this capex is in the line with those tailwinds. Right.
Harsh Bansal
So we are already. We’ve been very kindly granted the approval for the PLI as well and we’ve been registered for that. So this is in line with the government’s focus.
Unidentified Participant
Okay sir, answers all my questions. Thanks a lot.
Harsh Bansal
Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Bhavish an individual investor. Please go ahead.
Unidentified Participant
Congratulations on a good set of number a lot of positives for the company in the last five months. So good to hear that. And going forward what will be the debt profile for the company? Like you’ll be raising some Debt for the expansion at Bokaro. So how. How much? By how much the debt will increase.
Harsh Bansal
Thank you for the very kind words. In terms of the debt for Bukaro, our total project outlay over the next 24 months is expected to be about 800 odd crores. And our debt is expected to be in the range of 500 crores out of that. So if you. I mean that is. Those are the broad numbers. And I’ve also given you the top line etc numbers. So.
Unidentified Participant
I have heard your. Like I watched your interview with NDTV profit in the month of March. So you had already told them that you’ll be doing a 3,000 crore top line in the next 24 months. And with a pack with a margin of blended margin of 10 to 12%.
Sanjeev Sancheti
Bavet. I’ll stop you over there. I had not commented on the blended margin numbers. I had said that they will moderate with the effect of this. My formal guidance is over here. Then my pat guidance is at about 5%. And my top line guidance is for a CAGR of about 75% up to FY28.
Unidentified Participant
So we’ll be doing around 1000 to 1100 crores of top line in. In this year.
Harsh Bansal
You mean FY26.
Unidentified Participant
Yes.
Sanjeev Sancheti
We are not guiding immediately because we just putting up the project. But our guidance for the next three years remains what it is.
Unidentified Participant
Okay. So one suggestion if you don’t mind. Instead of raising a lot of debt you can issue equity shares and reduce our debt. Or you already have like 120 crores of debt. You can reduce that. And you can also borrow like 300400 crores by showing shares. And. And. And that will help you instead of. Instead of going for purely debt. So it will. It will only. It will only be bad in the long run. Like it will hamper the.
Harsh Bansal
Very well. Appreciate that. That suggestion babe. We will take it into active consideration. Thank you so much.
Unidentified Participant
Because a lot of companies have.
Sanjeev Sancheti
Yeah. But otherwise. Otherwise also if you look at. In spite of the expansion our difficulty is not crossing point six at any point in time. In spite of that.
Unidentified Participant
I agree. I agree. Buying can change anytime. So I just suggested that instead of like there is a lot of money in the market and the promoters already have like 74.36%. So even if you offload like 5.6percent in the first branch and then another 5,6 in the second tranche. So in the staggered manner you can reduce by 10 to 14% and get like. Like raise 400 to 500 crores. It won’t burden the company in the long run.
Sanjeev Sancheti
The idea is to when you conceive a project you start with a particular format of capital structuring. But of course we will look into actively into your suggestion.
Harsh Bansal
Thank you. Thank you so much.
Unidentified Participant
Because. Because recently company it’s not. It’s not related to your sector.
Sanjeev Sancheti
No. Appreciate. I’m really taking this as a very positive feedback and we’ll absolutely look into it. Thanks. I think we can move to the next question.
Unidentified Participant
Next question is with respect to your color coated steel. So can you elaborate more more about this color coded where it is used and which industries would it cater to.
Harsh Bansal
So it’s primarily in the project construction, housing. You know if you drive across any highway in the country today you and just look left and right you’ll see them covering warehouses, houses.
Unidentified Participant
That blue coated. You’re talking about. Okay. And. And. And you have mentioned enough PPT that you will be catering to defense as well defense and solar. So would it be from this plant or you’ll be setting up this plan.
Harsh Bansal
But some of the. Some of the products which may follow substitute to color coded.
Unidentified Participant
Okay, understood. That’s it from my side sir. But please consider raising my equity and not by debt. So it will be helpful for you and the shareholders as well.
Harsh Bansal
Thank you so much babe for your kind thanks.
Sanjeev Sancheti
Appreciate. Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Ronak Ostwal from RNGV Capital. Please go ahead.
Ronak Ostwal
Thank you for the opportunity. Good afternoon. So my question is that in last quarter you mentioned that you are in finalizing state of GPGC sheet agreement by has that been already signed or if not, what’s the latest update?
Harsh Bansal
Ma’ am, we had a disclosure a few weeks back where it was signed that has been signed? Yes, up to FY29 and I also mentioned it in my opening remarks.
Ronak Ostwal
And sir, one more question. Has there been any progress on long term contact discussion with the Tata Steam?
Harsh Bansal
This is the same. No. Is there any other long term contract you are referring to, ma’ am?
Ronak Ostwal
No, no. Last season, the contact you mentioned in last quarter.
Harsh Bansal
Yeah, it is already finalized up to FY29. I have also. We have also issued a formal disclosure to the stock exchanges. It will be available on the site.
Ronak Ostwal
Okay, sir, I might have been. And the next question is you scale down the 1 million ton capacity expansion to 7 lakh tons, right? Is there any change in that plan now or do you any see potential to revisit it?
Harsh Bansal
So we will revisit it as and when the time comes. But as of now we are sticking to the 700,000 number.
Ronak Ostwal
Okay. As for the utilization of pipe and tube capacity was still around 1 lakh, 74,000 tons out of 5,34,000 tons last quarter. Has that been improving? Quarter four.
Sanjeev Sancheti
So the quarter four number there you will see a substantial improvement in the utilization of pipes and tubes. And this is slower than we had expected and therefore we had scaled down our number.
Ronak Ostwal
Okay, sir Nosh.
Sanjeev Sancheti
But we are seeing a healthy growth and we are hoping it picks up even faster. So.
Ronak Ostwal
Okay, thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Bhavesh, an individual investor. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Again sir, a quick follow up. How much cash and cash equivalent do you have as on the 31st of March?
Sanjeev Sancheti
I think it’s, it’s there on the presentation.
Harsh Bansal
Equivalent is asking. You have to give. We haven’t reported that number. Just a minute. So I, I’m just can move to the next question. You just take it out.
Ronak Ostwal
41Cr is your cash, cash equivalent and investments. All three.
Sanjeev Sancheti
Yeah. So that investment is also cash equivalent. You’re right.
Unidentified Participant
Yeah. So it’s around 41 crores.
Sanjeev Sancheti
Yeah, you’re right.
Unidentified Participant
And, and what was your operating cash flow?
Sanjeev Sancheti
Yeah, operating cash flow from cash. Net cash flow from operating activity.
Harsh Bansal
Right, Net cash flow and operating.
Sanjeev Sancheti
Activity. Yeah, 125 Cr.
Unidentified Participant
So it’s decreased from the last year.
Harsh Bansal
If you, if you notice Bhaveji, last year’s net cash from operating was actually more than my EBITDA by 1.7 times.
Unidentified Participant
So because, because of the one last year we started.
Harsh Bansal
So we had actually got some long pending receivables. We had recovered and we had also.
Unidentified Participant
Inventory rationalization and a lot of inventory rationalization. So what happened was if you remember, if you have been following our company, we have been telling that we are working very very aggressively on reduction of the cash conversion cycle. So very large part of last year and that has continued this year. Hence this year also if you look at our cash conversion cycle, it is 85% of EBITDA which is a very high percentage by any standard.
Harsh Bansal
Right, right. Yeah, I can see that. Yes, it’s higher. That’s good then one last question. So this quarter the finance cost or the interest cost was around 1.3, 1.4 crores going forward will be Will it be the same amount or will it increase?
Unidentified Participant
So I think it will surely increase to reflect the borrowings. This is also lower because of certain paybacks that we have completed in quarter four. Certain debt which has been paid back and new loans which have been taken are still low.
Harsh Bansal
And there has also been. So there has been some capitalization which has happened because of which also the interests have come down.
Unidentified Participant
Okay, so. So this has improved your pack margins. So that’s the reason I wanted to ask going forward in the June quarter, will I feel a similar.
Harsh Bansal
No, no, it will not be 1/4. It will be similar to the previous quarters.
Sanjeev Sancheti
That’s right.
Unidentified Participant
Similar to previous quarters or 3 to 4 crores.
Harsh Bansal
Yes, yes.
Unidentified Participant
It will have an impact on the margins then.
Harsh Bansal
Operating margins on the back margins. Yeah.
Unidentified Participant
Okay. That’s it from. I said thank you so much sir.
operator
Thank you. Next question is from the line of Madhurati from Countercyclic Investments. Please go ahead.
Harsh Bansal
Please interrupt me. You’re not very clear. Hello. Much, much better. Thank you.
Madhur Rathi
What would be the IRR or payback period that we expect from the 700,000 metric capacity expansion that we are doing?
Harsh Bansal
So we expect IRR of 25% plus and a payback not exceeding maybe five years.
Madhur Rathi
Got it. And will you be getting any PLR benefits for this particular capex?
Harsh Bansal
That’s right. Like I mentioned, you know we have been registered for the Ministry of Steel PLI 1.1 scheme and we will be hoping we qualify to get those. So there’s the final clarification. We mentioned that our revenue will increase by 75% by FY28 and what was be the margin then? 5% stable state.
Madhur Rathi
We are doing more than that currently.
Harsh Bansal
Because presently I think if you have heard the call, our business is very low material, is not a raw material heavy business. So the margins will obviously be higher. But now we are going into actual CPA production where the input will be our primary steel, hence the margin is going to be.
Sanjeev Sancheti
So these are essentially different businesses and in the current business I don’t have any raw material cost and they are largely provided by the customer. I do have some raw material but not very major in the bokaro business. About 80% of my cost will comprise from raw material. So fundamentally there are two different businesses and therefore when you measure pat as a percentage of sales it will of course change.
Madhur Rathi
If I consider these are two different businesses. The 630 that we are currently doing that is more than 10% margin business and the incremental sir. So that incremental I would say around 500 Korea that will be doing that will be a 5% margin business. Is that understanding correct?
Harsh Bansal
Also, I think there is a. There’s a misunderstanding that you have, sir. It is 70% CAGR. It’s compounded annual growth rate up to FY28. That 75% is not on 600. It is over the next three FY’s every year. Which means that up to FY28 we will have a 75% CAGR. So in FY28, my top line will increase accordingly by FY28.
Sanjeev Sancheti
So for you to come to the top line, you have to. You have to increase the revenue by 70% every year up till you reach 28.
Madhur Rathi
Got it, sir. I thought it was cumulatively over the three years. Thank you so much and all the best.
Harsh Bansal
Thank you. Thank you.
operator
Thank you. A reminder to all participants, you may press Star and one to ask questions. Next question is from the line of Priya Avarwal, an individual investor. Please go ahead.
Unidentified Participant
Thank you for the opportunity, sir. So my question is that you previously mentioned target improved for ROE and ROCE with ongoing expansion. Have these improved in quarter four and do you expect further gain in FY26?
Harsh Bansal
So in the existing business we have seen a moderate improvement in these numbers because the ramp ups on the tubes division is happening. But of course they are not as much as we would have liked them to be. We do hope that this business will continue to show improvement of ROCE and ROE over the next FI as well.
Madhur Rathi
Okay, sir, and so one more question that what would be the optimum revenue potential if you achieve 60 to 70% of utilization across the pipe and the tube capacity?
Sanjeev Sancheti
Actually, just a second, Let me.
Madhur Rathi
Yes, sir, that’s it. Thank you so much, sir.
Sanjeev Sancheti
Thank you. Thank you, ma’ am.
operator
Thank you. A reminder to all participants, you may press Star and one to ask questions. Next questions is from the line of Jeev Mehta, an individual investor. Please go ahead.
Unidentified Participant
So coming back in the core business.
Harsh Bansal
May I please request you. Your line is not very clear.
Unidentified Participant
Hello. Am I audible?
Harsh Bansal
No, you are audible but not very clearly.
Unidentified Participant
Hello. Is it better?
Harsh Bansal
Better please. Yes.
Unidentified Participant
Yeah. So I just wanted to understand what would be our guidance in our core business, that is our fuel servicing business over the next, let’s say going forward.
Harsh Bansal
So you know, as indicated in the past, the EBITDA margins on the existing business will be around 20% to 24%. That’s a stable state.
Unidentified Participant
And with respect to the top line.
Harsh Bansal
The top line, like I just mentioned, to the caller before you. If you know the only place where we are left to ramp up is the pipes and tubes. And if that ramps up to the capacity, we expect maybe 850 crores or thereabouts.
Unidentified Participant
Got it. Okay. Thank you.
operator
Thank you. Thank you. A reminder to all participants. You may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. A reminder to all participants, you may press star and one to ask questions. As there are no further questions from the participants, I now hand the conference over to management for closing comments.
Harsh Bansal
Thank you so much, Arian Capital. Thank you so much, Sanjay. Thank you to all the investors who kindly took the time out to get on the call today, the enlightening questions. I’m sure that we will be able to keep your confidence up going forward. And please feel free to write to us in case there is any additional clarification or questions that we can answer for you. Thank you so much once again, Sandeep.
Sanjeev Sancheti
Thanks a lot, Ariant Capital and all the investors for taking out time for this call. Really appreciate and all the best. Thank you.
operator
Thank you. On behalf of arianes Capital Markets Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. It.