M & B Engineering Ltd (NSE: MBEL) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Malav Patel — Joint Managing Director
Keyur Shah — Chief Financial Officer
Chirag Patel — Joint Managing Director
Analysts:
Unidentified Participant
Krishna Patel — Analyst
Aniket Madhwani — Analyst
Hitesh — Analyst
Aditya Soma — Analyst
Vaibhav Shah — Analyst
Mihir Mehta — Analyst
Somil Mehta — Analyst
Raj Sara — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to the nine month and Q3 earnings call of M&B Engineering 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 Star then zero on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Krishna Patel from ey. Thank you and over to you.
Krishna Patel — Analyst
Thank you Yashashvi and good evening everyone. Welcome you all to MNB Engineering Limited’s Q3 9 month FY26 earning conference call to take us through the results and to answer your questions. We have with us the management of MNB Engineering represented by Mr. Dirak Patel, Joint Managing Director Mr. Malav Patel, Joint Managing Director Mr. Sanjay Majumdar, Director and Mr. Kiwusha, the Chief Financial Officer. Please note that the discussions that we may have today may contain certain forward looking statements relating to the future events, future performance. Numerous factors could cause actual result to differ materially from those in the forward looking statements.
Please note the audio of this earnings call is the copyright material of MLB Engineering cannot be copied, rebroadcasted, attributed in press media without specific written consent of the company. Now I would like to hand over the call to Mr. Malav Patel, the joint MD for his opening comments. Thank you and over to you sir.
Malav Patel — Joint Managing Director
Thank you Krishna for the introduction. Good evening everyone and welcome to the earnings conference call of MNB Engineering Limited to discuss our performance for the third quarter and nine months ended December 2025. It has been a strong period for the company and I’m pleased to share the highlights with you today. I trust you have reviewed our financial results and the investor presentation available on the stock exchanges and on our website. I will first cover the key financials and operating highlights for the quarter and nine months period and then outline developments across our Phoenix and proflex division along with our outlook.
Let me begin with the financial performance. I am delighted to report that MNB Engineering has delivered its highest ever quarterly and nine month revenues during Q3 FY26 revenue from operations stood at 352 crore a healthy 7% year on year growth. For the nine months period ended December 2025 revenue rose to 896 crores reflecting a very strong 33% year on year growth and underscoring the momentum in our business, our international Business continues to scale well. Consolidated Export sales during Q3FY26 were 63.17 crore and exports for the nine month period stood at 119.95 crore demonstrating sustained traction in overseas market and with North America as the key growth driver, our visibility on future growth remains robust.
As of 31st December 2025, the unexecuted order book stood at Rupees 1059 crore up by 38% year on year. Of this the Proflex division accounts for 23% which is 240 crores while the Phoenix division constitutes 77% standing at 818 crore. Within the Phoenix order book, export orders contribute rupees 316 crores, highlighting the growing contribution of high value international projects. Order inflows during Q3FY26 were particularly encouraging at rupees of 480 crores month marking an 86% year on year increase. This sharp growth in order intake reflects strong demand, higher win rates and our ability to convert our pipeline into firm orders.
Our execution track record remains a key strength. The Phoenix Division, with over 15 years of operation has completed more than 1600 projects and installed over 6.9 lakh metric tons to date. The Proflex Division, with a 23 year history has executed over 8400 projects and installed more than 19.9 million square meters. This scale coupled with consistent delivery has helped us build deep long lasting relationship with customers across sectors and geographies. Let me now turn to our international strategy and capacity platform. Our Sanan TB plant is currently the only facility in India with the AISC certification, a prerequisite for most general contractors in the United States.
Combined with a dedicated marketing setup in the eastern US and the credibility we have built by supplying pre engineered buildings and structural steel for large scale industrial buildings, this gives us a clear early mover advantage in a very large and attractive market. While sector specific duties are currently weighing on margins, returns from this market still remain comfortably ahead of the domestic Indian market. The recently announced trade deal between India and the US which reduces reciprocal tariffs, is a positive structural development and should over time improve sentiment and support more competitive economics. Even though the specific sectoral duties are yet to change.
We are also actively leveraging the CWB approval obtained for our Saanen plant which is mandatory for exports to Canada. This positions us to deepen our presence across North America. In parallel, we have initiated the approval process for our Sanan plant for entry into the EU market. The recently concluded trade understandings between India and the EU should help us fast track our access into that region. During Q3 FY26 we secured the single largest export order to date valued at Rupees 212 crores from the United States. This is a strong endorsement of our engineering capabilities, reliability and competitiveness on a global stage.
While we remain extremely positive about the long term opportunity in the Indian market, we will continue to expand our geographic reach. Our strengthening international franchise is expected to structurally improve our margin profile and allow us to benefit from both domestic and global growth cycles. During nine month FY26 we incurred capital expenditure of rupees twelve crores primarily towards augmentation and operational strengthening. These investments are calibrated to our medium term growth plan and are focused on enhancing throughput, efficiency and delivery timelines. Let me briefly highlight the developments in the ProPrex division. Our new unit source from the UAE was received in December 2025 and is commissioned in January 2026.
The remaining two units from the US are expected to be commissioned in Q1 of FY27. Once fully operational, these additions will increase Proflex’s installed capacity by approximately 3 lakh square meters per annum, positioning the division to capture incremental demand and further improve service level to our customers. Coming to our guidance, we remain confident of delivering our FY26 outlook. We expect the top line to be around 1250 crores with EBITDA margin in the vicinity of 12.75% supported by a strong Q4 across the domestic and export markets. Looking ahead to FY 2027 we see a solid foundation for continued growth.
We expect to carry an unbilled export order book of Approximately anywhere between 280 and 300 crores at the end of FY 2026 to be built in FY 2027 alongside additional PEB and Proflex capabilities capacities that will be added available for a major part of the year. We will be in a better position to provide more specific guidance for FY 2027 at the time of our Q4 FY26 result call. In summary, MNB Engineering is entering its next phase of growth with three clear levers, a healthy and a diversified order book, proven execution capabilities backed by decades of experience and targeted investments that are expanding our capacity and global reach.
We remain focused on disciplined execution, profitable growth and value creation for all our stakeholders. With this, I would now like to hand over the call to our CFO Mr. Kehur Shah to take you through the detailed financial performance of the company. Over to you.
Keyur Shah — Chief Financial Officer
Thank you Malavai and good evening everyone. A warm welcome to the earning conference call of MNB Engineering Ltd. I shall summarize the consolidated financial highlights for the quarter and nine months ending on 31st December 2025. Let me begin with the key highlights for the quarter ended December 2025. During the quarter revenue from operations was at 352 crores with a growth of 7% from 328 crores in quarter 3 of FY25. During the quarter EBITDA was at 44 crores a healthy growth of 30% from 34 crore in Q3 of FY25. EBITDA margin was at 12.4% as compared to 10.2% in quarter 3 of financial year 25.
During the quarter PAT was at 25 crore, a growth of 44% from 18 crore in Q3 of FY25. Now let me take you through the performance for the nine months ended December 2025. During nine months of financial year 26 the company recorded a revenue of 896 crore a growth of 33% from 675 crore in nine month period of FY25. During nine month period of FY26 the company recorded EBITDA of 114 crore a growth of 26% from 91 crore in nine months period of FY25. EBITDA margin was at 12.77% as compared to 13.5% in nine month of FY25.
During nine months of FY26 the company recorded PAT of 66 crore a growth of 35% from 49 crore in nine months of FY25. PAT margin was at 7.3% as compared to 7.2% in nine months of FY25. During nine months Of FY26 the company recorded export revenue of 120 crore up by 107% Y on Y basis. Out of the total net IPO proceeds of 259.32 crore, company has utilized 130.31 crore so far, that is 50% of the funds have been utilized as on 31st December 2025. During the quarter 2.77 crore was utilized. That concludes with my update on the financial highlights of the company.
I shall now request the moderator to open the floor for question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much Ladies and gentlemen, 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 remove 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. We’ll take our first question from the line of Gaurav Shukla from Finvestors. Please go ahead.
Unidentified Participant
Good evening, sir. Congratulations for good set of numbers.
operator
Gaurav, may I request you to use your handset mode please. The audio is not very clear.
Malav Patel
Yeah.
operator
Yes. Please go ahead.
Unidentified Participant
Good even, sir. Congratulations for good set of number.
Malav Patel
Yes, sir.
Unidentified Participant
Just. I want to ask about FY27 growth rate. In which respect I want to say that Phoenix mode or prop mode. Which sector should be growing FY27.
Keyur Shah
Well, Gaurav, obviously as Malav said in his opening speech we have an unexecuted order book of almost 280 to 300 crores which will be billed. We have about 20,000 tons of additional capacity coming in in Sanand. And then obviously Proflex. Maybe we have three lines which will be fully operational. Why? We think that a little more precise guidance we need. Because there are few more orders which are under negotiation and in pipeline. But you can definitely expect a very sound higher teen growth. But this is more as an indication. We will be more specific definitely by end of Q4.
Unidentified Participant
Okay, sir. And sir, new unit just. I have heard that new unity uae. Sir, please throw some light on that.
Malav Patel
Chair unit. You mean to say new unit? Yes. Yes. What would you like to know about that? Only money.
Keyur Shah
What is your question? What is the question?
Unidentified Participant
You have said in opening the marks that a new unit is established in uae.
Malav Patel
Yes. Yes. We bought a new unit for Proflex from uae. From. We are not setting up a new unit in uae. It’s a equipment that we bought for Proflex business from uae.
Keyur Shah
It is a manufacturing equipment that we have bought while one from UAE and two we have ordered from the United States. The One from the UAE has already been commissioned in January of 2026. And the two other additional manufacturing units which we are importing from the US shall be commissioned in Q1 of FY27.
operator
Thank you. Before we take the next question would like to remind participants to ask a question. Please press star n1 on your phone. Next question is from the line of Aniket Madhwani from Step Trade Capital. Please go ahead.
Aniket Madhwani
Yeah. Hello sir, I’m audible. Yes, I just wanted to do clarification on the capacity expansion. You were adding around 20,000 tons per annum at Stan Sanand and 20,000 tons per annum AT3 hours. So is it operational as of Now.
Keyur Shah
No, no, no. So as we clarified, Sanand plant expansion is underway. We have already started doing all the work required and we are targeting to make IT operationalized by Q2 of FY27. Chair Plant Expansion we will immediately take up thereafter so that it becomes operational in somewhere around Q1 or Q2 of FY28. This is a plan.
Aniket Madhwani
Okay. After the salon plan gets operational, you will start expanding it.
Malav Patel
Here. We have started only before a year actually. So Chair is a brand new facility where we are working on building up the capacity utilization to its optimum level which we feel should come next.
Aniket Madhwani
Okay, so. So in FY27, what level of utilization you will be achieving? I mean at both facilities, the existing.
Keyur Shah
SAN and overall existing utilization between both the facilities is on an average around 65 to 70%. Sanand is 75 plus. Standand is absolutely choco block. Chair is nearing 50%. But chair will pick up in the coming quarter. So next year chair should become 70. Yeah, around 70. 75%. And then the new capacity, of course it takes a little time. But that new capacity, once it comes in, obviously we should be able to ramp it up quickly. In terms of utilization utilization next year average about 65. 70% utilization overall.
Aniket Madhwani
Overall it will be around 65 to 70%. And in Q3, what volume did we achieved in Phoenix and Proplex segments?
Keyur Shah
Volume? Yes.
Malav Patel
One minute. 3. 80,000 square meter. That is in proflex. Okay. Visa vis 343,000. In Q3 of previous year, 346.
Keyur Shah
380,000 this quarter.
Malav Patel
3 which is in ton. In Phoenix it is in tonnage which is 20,228 ton. Visa vis 19.362of previous year quarter three.
Keyur Shah
Nine months cannot be both.
Malav Patel
If you want nine months, I can give you nine months bigger. 10 lakh 68000 square meter in proflex. Visa vis 827,000 square meter of previous year nine months. And in Phoenix, 51,908 metric ton for this year nine months. Visa vis 38,811 metric done for the previous year’s nine months we have 51.9 51 908. Visa vis 3 38, 811. Okay.
Aniket Madhwani
And regarding margins, when are you expecting to stabilize in person? I mean still we have achieved around 11% in this quarter operating margins FIP.
Keyur Shah
So you know, we. I think what Malav clearly says that this year’s target was around 12.75% or thereabout. And we are on track. You see now Given particular quarter, what happens the dispatches happens as per the dispatch schedule and the project completion schedule of the customer. So a particular quarter sales mix may not be optimum. We are requesting you that in our line of business, a quarter to quarter up annual they can get so that. So Therefore by implication, fourth quarter will be much stronger because there are some very good orders which are going to be executed with a very decent higher margin.
So overall around 12.75 to 13. Now if you see today in US which is our major market, although there is a tariff reduction on the overall reciprocal regime, the sectoral remains. So unless I think that next year also around easily around 13% or little higher could be a good measure. But as we said, we are not giving any guidance for next year. But currently.
operator
Thank you. Thank you. Aniket, I request you to join back the queue please as we have other participants waiting for their turn. Thank you. The next question is from the line of Hitesh from Abacus Asset Managers. Please go ahead.
Hitesh
Yeah, hi, I just want to confirm on the domestic side our revenues have declined by roughly 10% on a Y o y basis. Would that number be correct?
Keyur Shah
Can you get back with the question please? You got disconnected in between Hitesh.
operator
Please use your handset mode.
Hitesh
Yeah, I’m on handset. I’m just saying on the domestic side our revenues have declined 10% on a yoy basis. Is that number broadly correct?
Keyur Shah
Because export has increased domestic domestic. Talking of total K division wise, I think totally exports have gone up. Capacity limitation was there in Sanand. So whatever we had to push first in exports that is used. But overall domestically order book is very very strong.
Malav Patel
Yes. And see in order book we are see, we have to always take care of the capacity because we cannot book the order which are beyond our capacity and because our orders are to the tune of nine months cycle. So if we know that within that nine months this order is not going to be serviced, we should not take that order. So we always be have to be selective in the order booking. And as and when we are cap, we have booked the capacity. We have to. We have to make wait for the further.
Hitesh
See, basically we have utilized the Chennai Tamil Nadu facility.
Keyur Shah
The thing is. I’ll explain you better, right? As we speak, only my Sanin facility has the required certification. Correct. And that capacity is not enhanced yet. Next Q2 of next year that capacity will be enhanced by 2020. That’s what we communicated, right. So I have to balance between my domestic and export output from that limited 72,000 tonnes of standard Capacity which is currently existing. So if my export execution is higher then it will have to be compromising. We will be compromising on the domestic output. So that’s how that balance will always remain.
But it may keep shifting on a quarter, on quarter basis because my capacity, additional capacity is not in place yet.
Malav Patel
And one more thing it is, I would like to add one more thing. Say my. If you look at my three, three months figure, I have gotten growth of 57% whereas domestic also I have got growth of 46%. So it is not like numbers are totally different. 46, visa is overall 57 and the nine months figure we have achieved 33% overall growth whereas my domestic has grown by 27%. So it is end in end. Only thing is we have to keep.
Keyur Shah
Shuffling between domestic capacity, available capacity.
Hitesh
I understand that. I totally understand. My only point was that couldn’t we have used the Tamil Nadu facility where our capacity utilizations are lower, as you said, would we have used that in this quarter?
Chirag Patel
Yeah. So Chirag here. See if I have a job in say north of India or west of India, it would not be feasible to ship out the material from the Chennai plant. So for Chennai it is not that I can ship a job that is going on in north of India, right, Because of the transport cost. So that though our order book for north and west is high and the approval of projects have come through, that doesn’t mean that I can ship those projects from chair facility. So we limit to about 800 to 1000 km what can be addressed from the Southern Plan or JR.
Hitesh
Thank you.
operator
Thank you. Next question is from the line of Aditya Soma from Ambit wealth pms. Please go ahead.
Aditya Soma
Yeah, hello sir. Am I audible?
Malav Patel
Yes. Yes.
Aditya Soma
Yeah. So hello and congratulations on a great set of results. So what I’m seeing is if you look at exports, right, exports was close to 10% of revenue in FY25. It is for this quarter close to 20%. When we look at the total order book, it’s close to 30% and in terms of order inflow it’s close to 50%. So what is the guidance going forward in terms of like order book from exports? Because and secondly in terms of after the reduction in tariffs, what can we expect in terms of margins?
Keyur Shah
See going ahead also the export market remains robust. As I spoke in my speech, as we speak, there is a good pipeline of inquiries from the U.S. and the Canadian markets. So the inflow will continue. The quantum of size or the size of projects made vary. But we are quite confident about the order inflow that will be coming in in the current quarter as well as Q1 of 27. Right. Secondly about the tariff tariff reduction that is mainly in the reciprocal which is product specific tariffs. Right. Which is different between different countries. India pay 50% house, 25% was the reciprocal tariff and 25% was the penalty for using the Russian oil.
So what has been reduced is this 50% to 18% but it’s product specific. Where we fall is the sectoral tariff which is on iron, steel and copper which is flat on the entire world. Whatever country is exporting into the US market. So that remains intact at 50%. There is no change in the tariff that is applied to businesses like us in the steel sector. Right. But this reduction in the reciprocal tariff will definitely end up or result into a positive sentiment in India as well as in the us. So you know the investment cycle will also go up in the US that will indirectly bring us a larger scope of business in the coming time.
So the current tariff reduction does not directly affect our business in the us. It remains at the same level.
Aditya Soma
Sure. So and secondly I wanted to know are we looking at an AISC and CWB certification for the chair plant as well in the short to medium term.
Keyur Shah
AISC we are initiating in anytime in this quarter for the JR plant and CW cwb We will keep specific to the sand plant.
Aditya Soma
Sure. And last question from my end. So if you look at one of our peers has crazed is planning to raise a QIP to you know front load a lot of CapEx because of the kind of demand that they are seeing. So are we looking at kind of investing more in terms of CapEx or front loading? Some of the CapEx. CapEx maybe through some of any means of financing.
Keyur Shah
So no, I’ll tell you I know what you are getting but see currently we have about 120 crores capex spending out of the IPO proceeds. So we are focused on that first. Secondly we are increasing our overall capacity by 40,000 tonnes. As you are aware 20,000 will come in 27 and another 20,000 in 28. So our long term strategy is to definitely look at in India a third plant. We are evaluating various options but at this point in time while absolutely we are clear that we will have to put incremental capex in India there is no such plan or no such thought that comes our mind that we might need additional capital.
If I have to borrow, I have enough propensity to borrow but will not be you know thinking of any such thing like UIP etc. But yes capex definitely we are very clearly evaluating the third plant options part.
Aditya Soma
Of the country in the southern part, northern part. Yeah that makes sense. Yes, yes. Yeah that’s it from my side sir.
operator
Thank you, thank you, thank you, thank you. Next question is from the line of Vaibhav Shah from Equuriz Securities Please go ahead.
Vaibhav Shah
Yeah thank you very much for the opportunity sir. So pre tariff price arbitrage between our and local US supplier was somewhere around 1200 USD which was narrowed down to USD 400500 so now with the reduction of this receivable terror what kind of price arbitrary improvement we are expecting.
Keyur Shah
Yeah so as Malo just explained we are part of sectoral tariff which is aluminum, steel and copper and there is no reduction so the arbitrage and the pricing remains the same. If this sectoral tariff gets reduced or any variation comes we will see that that time but currently we are at the same level which were. Which we were in Q3 as well as our Q2.
Vaibhav Shah
Okay secondly sir you have previously guided for the capex of rupees 600650 million for FY26 but with the nine month FY26 capex of rupees 120 million now what kind of capex do you envisage for full year FY26 as well as FY27?
Malav Patel
See whatever we have guided is first phase under the IPO which is SANA and then which is under progress well in under as per the schedule. So so we, we. We need. We want to conclude this and it will be operational within say end of the Q1 or early Q2 of the next year so this CAPEX will take place. This is related to my first phase of Sanand plant 20,000 capacity expansion under the IPO.
Chirag Patel
So to be a little more specific about 60 odd crore would be for the Sanand expansion 12 crores is spent because IPO has happened only in the August right. We have placed orders Civil construction is undergoing major part of the capex will happen in Q3 and something Q4 and something in Q1. Major in Q1 sorry my mistake major in Q1 exact figure I will ask you to work out but another 15 to 20 crores will go in the Q4 and then rest 31st 30 days to 4030 to 40 crores will come next year out of phase one.
Phase two be Chalu Hojay we will. We expect the total capacity to be in the range of about 80 crores next year.
Vaibhav Shah
Okay got it. And lastly sir in the Phoenix segment could you give some sense on the realization? So how does it look like for the current outstanding order book that is for both domestic and exports. So like in FY25 the domestic realization was around 1 lakh 10,000 rupees and exports would be somewhere around 2.5 lakh rupees. So how does it look like for our current outstanding order book for both domestic and exports?
Keyur Shah
Yeah Vaibhav, based on the current order book for domestic and exports the range would remain the same for the sales price range will remain the same broadly 110 for local and about 250,000 for international but you know it’s not directly comparable. So in international there is lot of element of bought outs so from project to project bought outs can be different and then today as a DDP delivered price also the tariff part has been added so you know we had tariff on the sales price and then tariff becomes the direct cost also to that extent.
So I would say that it can vary on international front from project to project domestic. Maybe this is a product kind of pricing. There would be an element of erection and implementation services which can add another about 15 to 20 rupees per kilo on the domestic side.
Vaibhav Shah
Understood? Understood. Thank you very much for answering my question. I will get back in the day.
operator
Thank you. We’ll take our next question from the line of Aseem from DAM Capital. Please go ahead.
Unidentified Participant
Hi, good evening. So I had a couple of questions on the domestic PEB business. So first of all can you just tell me what was the domestic order book for peb as of Q2 end and what is it now as of Q3?
Malav Patel
835 yeah say Q2 and was 930 crores of the order book which were bifurcated between 230 odd crores was proplex 122 crores from export so and the remaining was in domestic right now currently the the breakup is like 1059 is shared by 240 crores by proflex818 by phoenix which is further broke down like 316 crore export and balance in domestic. So domestic also there is good numbers and as well as export has increased.
Unidentified Participant
Sorry what was the Proflex number for Q3? 240 crores, right?
Malav Patel
240.
Keyur Shah
240 crore.
Chirag Patel
240.
Unidentified Participant
Okay then so the numbers for the domestic PEB order book would be 580 odd crores as of Q2 500 crores as of Q3 so about a 80 crore drop in orders But I was just seeing your domestic PEB revenue booking. I think that has increased from 190 to 220. So basically the incremental revenue QoQ is 30 crores, but the domestic order book number is down 80 crores. Can you help me understand what I’m missing here?
Keyur Shah
See, when we book an order, we book our capacity to execute that order also, right? So if I have booked an order which is the big one, 212crore export, right? So a part of my, my capacity I would have allocated for that order and therefore during that time my domestic order obviously will go down. My intake has to go down because I will not be able to able to service that. So we keep on continuously see our capacity availability versus capacity booked and free capacity. Now if you see here, we have already declared two decent sized jobs for domestic, both are domestic and the domestic pipeline is also very good.
And those two jobs you have already declared, which are about 110 crores in value and a good amount of pipeline is also there. So based on my availability of capacity allocation and the location of the job, this number will vary from time to time and quarter to quarter. But there is no such directional conclusion that, you know, there is some reduction on the domestic order flow. In fact, the pipeline is very solid even on the domestic front and we are struggling, to be very honest, some of it might be required to be outsourced as well.
That is the situation.
Unidentified Participant
So I think you’re consciously, I mean given the capacity constraint, you’re consciously focusing more on exports, reducing your focus on domestic, even if it is temporary, right? So that is the broad understanding from what he just said and to an earlier question as well.
Keyur Shah
No, no, no, no. It’s a conscious effort.
Chirag Patel
No, no, it’s not like that. As I said, for example, my Sananda has 6,000 tons, right? Per month. Now if I allocated to this international job, say to 2,000 per month for say three months, for say example is a 6,000 ton job. So then I only have remaining part of the capacity that I can allocate to the domestic job. So as I said, we clearly foresee, well ahead in time that what is my current capacity availability and the capacity that I can allocate to different jobs. So, so as I, as we said that it will differ from time to time based on the capacity allocation that we have done from both the plants.
Unidentified Participant
Sure, sure, I understand that. I mean, there’s just a limited point that I was trying to think about is that, you know, given that your peers, your listed peers are being more Aggressive in the domestic market. I just hope we don’t lose market share just because you’re prioritizing exports given your capacity constraint.
Keyur Shah
No, it is not a conscious effort. Neither it is that we are prioritizing it. See we have to weigh many many factors when we are bagging or choosing a certain project. It is based on the prestige of the project, the customer long term relationship. So there is many factors which will drive and govern our decision on which order to take and which not. So it’s. It will continuously be shifting within a quarter as well as quarter to quarter. So there is no conscious effort. Neither there is any priority. Nay, but Asim, I will add one thing which is very important.
We are not under pressure to take any job at any margin just to fill up the capacity. We have this luxury of having a very strong exposure to good margin giving markets also. So margin is one of the important criteria rather than just going for growth in terms of top line. Having said that, please understand we are looking at the third facility in India. Probably we are going to expedite its announcement as soon as we are able to have some location. So India remains absolutely on top priority. Having said that, a little bit of conscious effort towards maintaining a date decent margin is more important rather than only top line for the sake of growth.
If I have to summarize our strategy then this is what it is.
Unidentified Participant
Understood sir. Thank you. Thank you very much for answering my questions.
operator
Yeah, thank you. Next question is from the line of Minit Mehta from Ashika Group. Please go ahead.
Mihir Mehta
Hello. Am I audible?
Keyur Shah
Yes, yes.
Mihir Mehta
So I was looking at your cost of materials as a percentage of sales across last eight quarters and it is quite volatile. I assume the main cost is steel. So can you help me with what type of steel is there like it is ongoing in cost of material. Why this huge swing from year on year end quarter on quarter for cost of materials.
Malav Patel
Yeah, so see cost of material. See when you look at peb, PEB consists of various part like primary, secondary sitting and all. So each part has a different cost factor. So in annual things everything is boiled down through average. And because most of the jobs gets closed during the start and close during the year so it gets average out. But each component has a different cost component attached to it. So whatever material has been used accordingly the cost applies. Second thing is when we do export, export is also having a factor of U.S. buyout. And U.S.
buyout is a very means, very, very value buy very big item. So whenever this takes place, delivery of U.S. buyout takes place. That also increases my cogs.
Chirag Patel
So overall rather than seeing for a quarter, it would be better to see for a consolidate for a nine month or a six month kind of period. So which will then if you see that then the cogs will almost remain the within the range. But from a pure production point of view, I would say we are working in the gross margin region of around 30 to 33 34%. That is the gross margin in terms of a pure sales minus RMC at the production.
Mihir Mehta
Okay, got it. And secondly, most of the players in this PAV industry are looking for Canada market. Like you do see a lot of growth from Canada market. Like have you started any getting orders from Canada market or you are waiting for some certification over there? I assume you have the certification.
Keyur Shah
We already have the Canadian Welding Bureau certification. Our Sanon plant is certified by this authority. As we have communicated earlier, the CWB certification is is mandatory to supply any building materials into the Canadian market. Right. As we understand right now, Phoenix Sanan is the only plant which is certified by cwb. If there is any recent development then we need to investigate on that. But since we got this CWB certification in June, I think May or June of 2025, we have received about five orders executed. About three and two are underway.
Mihir Mehta
Going forward. Is let’s say that between us and Canada like is there Canada more beneficial in us like being the capacity being limited at Sudana. So can you cater to more Canadian market or US market? Can you give color on that?
Chirag Patel
I think I’m sure the US would be leading because it’s a much larger market. Right. And we have been present in the US market since more than five years now. And we have a good coverage of the geographical areas in the US it’s larger than Canada as of now because see AISC certificate I’ve had since 2020. So we will be slowly adding the Canadian presence. But right now as we speak on the eastern seaboard, especially on the Southeast American markets, we already have a good number of marketing people. We have a good reasonable size of network of general contractors.
So US will always be leading as far as North American business goes even in the coming time.
Mihir Mehta
And like tariffs won’t impact like no more higher realization in Canada because of tariffs or something Or Canada also I have status for India.
Chirag Patel
Canada is tariff. I think it is 25% but the pricing is better than the US and my margins are better than us but Canada also is as a growth for Canadian market. They are also facing this tariff that major produce is going to into the US market, right. Because they are also having tariff and they are also their industrial growth or the growth of exports from Canada to U.S. might suffer because of the tariff. And therefore obviously Canada will grow for us. Meaning there is still good opportunity but it will not be as big as US because US is a very, very big market and well established and better established for us.
And we will be expanding in the next year as well geographically in the US.
Mihir Mehta
That’s great sir. Congratulations on great set of numbers. That is from my side.
Keyur Shah
Thank you Vinit.
operator
Thank you. We’ll take our next question from the line of Somil Mehta from Kotak Mutual Fund. Please go ahead.
Somil Mehta
Yeah, yeah. Thanks for the opportunity. So it’s two questions from my side. Given the near term capacity constraints which I’m sure will be rectified in the foreseeable future, any new orders, what you’re going to build, is it fair to assume that they will be at a higher single digit margin or double digit margins? Given we’ll have to be very judicial in terms of what kind of orders we want to take it purely in the near term.
Keyur Shah
Yes. Yes. See Soumil, as Sanjay Bai rightly said earlier, our endeavor is always on the bottom line, right. We work towards getting the right projects which will serve my business objectives. And one of the large major objectives is serving the bottom line and the growth in the bottom line. And today we are in fortunate position that our order book is at that stage wherein we can command our price. Right? So obviously that is going to be our focus in the coming time. We may be a little bit more picky in the coming months when it comes to order intake.
Somil Mehta
Sure. Second question, Chirag Bhai is why not have all the export approvals even at the Cherryyar plant? I understand Sanand has all the approvals, has few of them. But going forward, how should we look at approvals even for the South India part?
Chirag Patel
No. So as from jr, we are starting with AISC because my presence in US is much higher as earlier discussed during the call that we will then start once I have the chair facility been approved, I will start my sales and marketing activity on the west coast of the US where my shipment from the Pacific route will happen to the western market. The Sanan is going through the Atlantic route which will help the eastern and the southeastern markets that we are currently operating. Canada major market is on the eastern seaboard, right in the center and on the west coast of Canada.
There are not large industrial units. The major industrial units are based out of the eastern part of the Canadian market. So currently we are targeting PWB only for Sanan and going forward if we see that demand is picking up we will obviously take. It is not that much of an issue and we will obviously take up for the chair. But AISC we have already started and we should be getting the approvals and probably Q2 or Q3 of this year.
Somil Mehta
Okay. And sure. And my last question in terms of there were news flow that railways is going to at least shut down all the crossings and eventually any any update over there, any preliminary indication, any any any thoughts over there. Because that seems to be a very large opportunity which obviously we have built in the capacity but it is not translating into the revenues which we had earlier and we charge. I mean obviously things are beyond our control. But what is the thoughtful is over there and where are these.
Chirag Patel
Yeah, so so you rightly said railways. The railway under bridge which are called rubs about 11,000 rural rubs are going to be converted in the coming maybe 5 to 10 years with an average size of about 1500 square meters which will. Which will relate to of about 1.65 lakh square meter. 1.65 crore square meters. Right. There are many workshops for Vande Paras, many rail yards, many stations that are going to convert it. But as you as we know that once the approval comes from railways for a certain project it takes time for the civil work, it takes time for the execution.
So total addressable market only for railways for this rub the Vande Bharat depots, the line sheds that we are seeing at between 2 crore square meters to around 2.25 square meter. 2.25 crore square meter is a huge opportunity and for all these areas we have been. Our product has been approved. So going forward there will be good amount of conversion that will happen and good amount of order intake will happen from the railway. So Tanil bhai just to add typically takes a much longer time. So you know this opportunity we are talking of potentially over a period of maybe next five years.
It doesn’t happen overnight. Railways take time. But that opportunity is now becoming very very clear and it is I think progressing well. Yes.
Somil Mehta
No fair point. My only question was maybe three. The opportunity was always there. What I want to understand is 3/4 back the kind of interaction level and the interest which was there from the railways is it at similar levels or things are moving at a much advanced stage is what I wanted to understand.
Chirag Patel
No, they are at similar. If we. If I tell you currently my railway related inquiries is anywhere between 5 lakh to 5.5 lakh square meters across all the zones. There are about 19 zones in Indian Railways across all the zones. These are the pending live inquiries that we are having. And because it is self supported roofing system that has been already been a part of the inquiry and a part of the design, this will get converted to the orders in the coming time. This will come through EPC contractors to us.
Somil Mehta
Got it? Got it. Okay. So thank you so much and all the best for subsequent quarters.
Malav Patel
Thank you.
operator
Thank you. Next question is from the line of Hitesh from Abacus Asset managers. Please go ahead.
Hitesh
Thanks. Sir. You know, on a sequential basis our share of exports is largely same. It’s around 22% or marginally higher. But our gross margins are significantly down by 3,4%. How do we explain that? Are we making did we make less margin in exports in this quarter?
Keyur Shah
See, basically of course the hit of tariff on the sectoral has suppressed our margin to an extent. See, as a business call, you know, at our business, the stage at which Phoenix is in the US market it is more important for the company to retain and or grow the customer base. Right? That is my top priority at the stage at which I am today. For that to happen, I have to absorb some extent of the tariff while I am able to give a competitive price to the US customer. Right? So the US customer has to find my commercial offer of at least a certain advantage to him to be able to shift from a US manufacturer to an Indian supplier.
Right. So while focusing on expanding the customer base, I will. It is a give and take situation. Right. I have to absorb a little bit of a tariff to make my price attractive enough for a US consumer. So that’s how this reduction or suppression is coming in the margin. That is true. Sequentially this particular quarter, whatever exports were made, bulk of them were at a lower margin in the sense that the product mix or the sales mix Q4, we have lot of dispatches at a much better margin. So what happens over a period of one year or six months, margins normalize.
So you are right. Sequentially we will have a better margin in Q400%.
Hitesh
Okay, sir, thank you.
operator
Yeah, thank you. We’ll take our next question from the line of Shashi Karthik from brightermind Equity Advisors. Please go ahead.
Unidentified Participant
Hello. Hello.
operator
Yes, we can hear you. Please go ahead.
Unidentified Participant
Okay. Good afternoon. Thank you for giving the opportunity. The first question I is in which geography we are seeing more, you know, development in terms of growth. I mean pan India.
Malav Patel
You mean to say which region?
Unidentified Participant
Yeah, which region In India domestic market.
Malav Patel
Domestic As I earlier said for our pre engineered building business, the sweet spot is 800-1000km. So my Tanan plant is able to cater to the north and northwest, the central west Central and the west, which is Gujarat, which is our major market. Then south is able to deliver to the three or four southern states, east and a part of north, probably up, Western UP and those projects will not be viable to be shipped out from from Phoenix, both the plants. So currently as you as I said, west would be the strongest region for us.
Unidentified Participant
Okay. As we are seeing lots of development in southern parts India in terms of semiconductor set up in northern India in terms of electronics market set up apart from south India. So are we, you know, serving these markets? As you mentioned, north is Uttar Pradesh is quite distant from your plant. So are we looking at the southern part, I mean Tamil Nadu and where we are actively engaged?
Keyur Shah
Yes, yes. One of the reasons being putting up a manufacturing unit in Tamil Nadu was to be able to have a physical presence and be in close connect or a vicinity with the potential customers right from Tamil Nadu. We can very efficiently and economically supply and deliver our projects to customers in all the four southern states which is Andhra Pradesh, Tamil Nadu, Telangana and Karnataka. So Tamil Nadu is one of the meaning southern regions are one of the potential regions where we see a lot of long term growth for the business we are in. So therefore, as we earlier said, so our third plant will be in the north India nearer to probably Lucknow, Western up, Central UP or towards eastern UP which we can cater to the northern market as well as the east market and UP area.
So that is how our Phoenix business is there. Proflex we are okay to take orders across India. So we concentrate across all the states except the seven eastern states and probably Kashmir and the London, Jammu Kashmir and those areas. Other than that, our presence is there across all the other states.
Unidentified Participant
Okay, that’s very pleasant to hear. I mean apart from that which industries we are seeing incremental demands building up apart from renewable energy sectors.
Chirag Patel
Currently we are seeing a good demand from the automotive. We have also given there are live inquiries from large data centers which I will not be able to diverse the name. We also have currently got a sizable order from a defense company in the domestic market. International defense company, International defense company in the international in the domestic market. So we are seeing positive traction for coming out of data center electronic ems manufacturing, renewable energy and renewable energy and semiconductor projects that are happening largely by Tata in Dolora. Some inquiries are going on so we’ll be able to Convert it into orders in coming times.
Unidentified Participant
Okay, so what about the current competitive intensity in the industry as many players are building their capacities and obviously doing some fundraise to front load the capacities and all the competition.
Keyur Shah
Yeah, because the demand is quite robust, competition will be there and a lot of people are setting up their plants. But our almost now two decades of experience, the execution of the project, the deliverable, deliverable of our projects to our long customers and the repeat clientele is going to help us though the competition is there and there would be enough work for everyone. So competition, competitive pressure will be there, but there is enough work for everyone. And newer application areas for steel constructions are coming in as we speak. Right. Earlier a couple of years back, you know, the data centers which a couple of companies set up were made out of concrete like conventional construction methodology.
Right. Now what investments are coming in are made by mostly international companies like Microsoft, Amazon, etc. Which have been used to using steel as their prime material for construction. So when these companies are setting up data centers over here, obviously that shift from concrete to steel is going to happen. But it is still a new field. You know, Indian companies are also investing in data centers. This is just an example I am giving you that newer applications are coming into, falling into place which will also increase the demand of steel construction. So while capacities are being increased, there will be enough demand from existing application areas as well as the newer ones that are coming in.
Unidentified Participant
Okay. Okay. Is there any internal, you know, vision for next five years in terms of getting at the market share or the revenue that we are looking at?
Chirag Patel
Internal C. Okay, so we have a very clear cut three year plan and we are also very clear about five years. So in three years we want to build up our PEB capacity between all the three plants. This is three to four years of vision document. We should be about 300,000 tons in terms of our capacity between the three plants over next three to four years. And out of that export should be minimum. I would say 20 to 25% rest all will be domestic. And then Proflex we want to maintain our predominant market share of 75%.
And if the agree and railways they accelerate, proflex can be easily 2x. There’s not a problem. But we’ll have to wait and see.
Unidentified Participant
That’s all from my side. Thank you.
Keyur Shah
Thank you.
operator
Thank you. We’ll take our next question from the line of Bhavya Daria from Chris. Please go ahead.
Unidentified Participant
Hello, am I audible?
Malav Patel
Yes, please go ahead.
Unidentified Participant
What is the split between Phoenix and Proflex? For this quarter.
Malav Patel
Yeah, I will tell you.
Chirag Patel
Revenue. Yes.
Malav Patel
Yeah. This quarter proplex has contributed 69.79 crore whereas Phoenix 281.72 crores making 2351 crore.
Unidentified Participant
Okay, okay, okay. And on our current order book which is I think executable in the next eight to 10 months and also the current order bid pipeline, do we see there could be 100 to 200 basis points EBITDA margin expansion going ahead?
Chirag Patel
You’re talking of this quarter? No, current.
Unidentified Participant
I am talking about next 12 years vision. Do we see a margin expansion, EBITDA margin expansion?
Chirag Patel
I would say around 1% is realistic over 1 year period maybe, but 2% is a little more ambitious given the current context and given the fact that our product mix will continuously move in. But this is not a guidance, this is the general statement we will come back to with more specific numbers by Q4.
Unidentified Participant
Okay, okay. And the order that we recently won the largest export order of 2 and 2 crores. What could, what would be the margins in that? Like what could be the margin profiles in it?
Chirag Patel
In this order? Particularly we will not share order wise margins. Not correct. We will not.
Unidentified Participant
Okay. Okay. Thank you. Thank you.
operator
Thank you. We’ll take our next question from the line of Raj Sara from Finvestors. Please go ahead.
Raj Sara
Yeah, so if you can please quantify the order pipeline for export and domestic market with order conversion rate.
Malav Patel
Sorry, sorry, we didn’t get you order.
Raj Sara
Books are order pipeline. You already gone through the order book in the presentation.
Chirag Patel
No, no, very difficult. I can just give you a general idea Raj. Our order pipeline. See currently we are handling inquiries worth about 17 to 18 lakh square meters in Proflex and about a hundred thousand active inquiries of about 100 to 150,000 metric tons in Phoenix.
Raj Sara
Okay, so though you have repeatedly told that you will be very clear on Q4 about the number for FY27. But how Lemon investor like me can just quantify seeing the current capacity concept in Short term how FY27 number could be?
Keyur Shah
I think Raj, we were pretty clear about the direction I said we will be in upper teens in terms of growth. But we are working on quite a few projects and we will be little more specific by end of Q4.
Raj Sara
Okay, so just last question from my side sir. As we know that the S2 is the strongest half. So if you can be very specific about which is our strongest quarter, is it Q3 or Q4?
Keyur Shah
Generally it will be between Q3 Q4 because see we have to deliver as per the project delivery schedules. But generally you can say about 55 to 60% could be H2 and about 40, 45% would be H1. It will keep shifting between Q3 and Q4 and the primary reason is again monsoon. Yeah.
Raj Sara
Okay. So we have seen sir monsoon in Southern part in Q3, early Q3 I think. Right. Okay. So generally or PEB company are actually having a great larger Q4 numbers in comparison to other quarters. So that’s why I’m asking seeing the Last last year Q3 Q4 numbers. So Q3 was strongest quarter previous year. So how I can conclude this?
Keyur Shah
No. So there is no direct correlation again as I said. But yes, this year Q4 would be quite strong in terms of top line but stronger in terms of bottom line as compared to Q3. So clearly.
Raj Sara
Okay. Thank you very much. Thank you very much. And I just wish you a good year ahead for FY27 even beyond that. Thank you.
Keyur Shah
Thank you much. Thank you.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments. Over to you sir.
Keyur Shah
Thank you everyone. On behalf of the management of MNB Engineering Ltd. We thank you all for joining us on our post earnings call today. We hope we have been able to address majority of your queries. You may reach out to me or our investor relations partner ENY for any further queries that you may have and they would connect with you offline. Moderator, we can now close the call. Thank you all.
operator
Thank you sir. Thank you management team. On behalf of MNB Engineering Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Keyur Shah
Thank you.