Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
M & B Engineering Ltd (NSE: MBEL) Q4 2026 Earnings Call dated May. 12, 2026
Corporate Participants:
Malav Patel — Joint Managing Director
Keyur Shah — Chief Financial Officer
Analysts:
Krishna Patel — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to MNB Engineering Limited Q4FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing STAR and then zero on your touch tone telephones. Please note that this conference call is being recorded. I now hand the conference over to Ms.
Krishna Patel from EY. Thank you. And over to you ma’. Am.
Krishna Patel — Analyst
Thank you Farah and good afternoon everyone. We welcome you all to MNB Engineering Limited Q4FY26 earnings conference call to take us through the results and to answer your questions. We have with us today the management of M and B Engineering represented by Mr. Chirag Patel, the Joint Managing Director Mr. Malav Patel, Joint Managing Director Mr. Sanjay Majumda, Director Mr. Kehushka, the Chief Financial Officer. Please note that the discussions that we may have today may contain certain forward looking statements relating to future events and future performance.
Numerous factors could cause actual results to differ materially from those in the forward looking statements. Please note the audio of the earnings call is the copyright material of MNB Engineering and cannot be copied, rebroadcasted, attributed in press or media without specific written consent of the company. Now I would like to hand over the call to Mr. Nalav Patel for his opening comments. Thank you. And over to you sir.
Malav Patel — Joint Managing Director
Thank you. Thank you Krishna for the introduction. Good evening everyone and welcome to MNB Engineering Limited’s earnings conference call for the fourth quarter and full year ended 3-31-2026. We concluded our board meeting earlier today and I trust you had the chance to review the financial results and investor presentation uploaded on the stock exchanges and on our company’s website. I will begin by highlighting the key performance drivers for the quarter and the full year followed by an update on our business segments and our outlook for the coming year.
FY26 has been a landmark year for MNB Engineering reflecting strong growth over across our key operational and financial metrics. Revenue from operations grew 27% year on year to 1259.7 crore in. In FY26 while Q4FY26 revenue increased by 16% to 363.7 crores. This performance was broadly in line with our guidance and was supported by a robust order book, strong execution capabilities and healthy order inflows across a diverse portfolio of businesses enabling us to deliver projects efficiently and on time.
EBITDA for FY26 increased by 17% to 157.2 crores and profit after tax grew by 20% to 92.6 crores. While we delivered healthy annual growth, profitability came under a little bit of pressure in the year, particularly in Q4 FY26 due to macroeconomic headwinds and foreign currency volatility. I would also like to highlight a positive development on the tariff front. This is the US tariff. The sectoral import tariff in the US market has recently been reduced by 25%. This is a meaningful improvement and we expect it to enhance competitiveness and improve traction in the US market going forward.
During FY26 we incurred capital expenditure of 33 crores primarily towards capacity augmentation and operational strengthening in line with our mid term growth strategy. Looking ahead, our estimated CAPEX for the year is around 100 crores reflecting our continued commitment to expanding capability and scale. As of 3-31-2026, ARAN executed order books stood at 1083 crore representing a 35% year on year growth and providing strong visibility for future execution. Of this, the Proflex division accounts for 20% or 212 crores while the Phoenix division contributes 80% or 871 crores.
Within the Phoenix Order book, export orders account for 279 crores or 32% with the balance coming from domestic orders. We also achieved our highest ever order inflow of 1,539 crores up 28% year on year. This reflects the increasing adoption of pre engineered buildings and the continued shift from conventional methods. During March 2026 we received a major domestic order worth 73.18 crores in the Phoenix Division for the design, engineering and supply of pre engineered building. This shall be executed over the next five months.
More recently in April 2026 we received another domestic order worth 71.95 crore for a similar scope to be completed in seven and a half months. The Phoenix division delivered a revenue of 985 crores in FY26, a growth of 29% driven by a strong demand in both domestic and export markets. Export revenue rose sharply to 165.6 crores up 156% year on year reflecting our expanding international presence, strengthening market demand and improved scalability. Our focus remains on North America which is catered to by our Sanon plant.
This is currently the only PEB plant in India with the AISC certification, a key requirement for most general contractors in the United States. The Sanan plant also holds the CWB certification, the Canadian Welding Bureau, which is mandatory to supply into the Canadian market. In addition, we have built a strong marketing presence in the eastern United States and are steadily strengthening our position by supplying PEBs and structural steel for large industrial buildings. This combination of globally recognized certification and on ground market presence gives us a clear early mover advantage in one of the world’s most attractive markets.
The Phoenix Division has now been operating for over 15 years, has completed more than 1650 projects and has installed over 7.1 lakh metric tons till date. We are also in the process of adding approximately 20,000 metric tons of capacity in our Sanon facility which is expected to be commissioned in Q2 FY27. Once this expansion is completed, total installed capacity at Sanon will increase to 92,000 metric tons per annum. Thereafter, we plan to begin expansion at the JR plant which is in Tamil Nadu with the aim of making it operational by Q1 or Q2.
Of FY28, the Proflex division reported FY26 revenue of 275 crores, growing 23% and continues to lead the self supported routing segment in India. The Division has now completed 8,600 projects over 24 years of operations and has installed more than 20.3 million square meters till date. Reflecting the strength of our execution capabilities, scale and long lasting customer relationships. We received one new unit from the UAE in December of 2025 which was commissioned in January 2026. The remaining two new units from the US are expected to be commissioned in Q2 FY27.
Once these additions are fully operational, Proflex’s installed capacity will increase by approximately 200,000 metric tons per annum, strengthening our ability to meet growing demand and improve turnaround time for FY27. We remain confident of delivering top line growth of around 25% year on year supported by the strong order book already in hand and the continued rise in demands for pre engineered buildings and self supported roofing systems across different sectors. At the same time, we expect some near term challenges.
The impact of the Iran conflict is likely to be reflected in the short term, particularly through margin pressure and execution delays. Labor availability constraints which are typical in the first quarter along with monsoon related challenges in Q2 may also result in softer performance in the first half of the year. However, as our historical trend suggests, the second half of the year has consistently been stronger for us. We therefore encourage our investors to assess our performance on a full year basis rather than a quarter by quarter.
In summary, we remain focused on disciplined execution delivering high quality projects, leveraging our expanded capacities and strengthening our presence across the domestic and export markets. With a comfortable order book, a visible BIC pipeline, improving execution momentum and targeting capacity investments, targeted capacity investments, we are confident of sustaining our growth trajectory. With that, I now will hand over the call to our CFO, Mr. Kehur Shah to walk you through the financial performance in a greater detail.
Over to you Kehur.
Keyur Shah — Chief Financial Officer
Thank you Malavoy and good afternoon everyone. A warm welcome to the Earnings Conference call of MNB Engineering Ltd. I shall summarize the consolidated financial highlights for the quarter and full year ending 31st March 2023. Quarter 4 of financial year 26 vis a vis Quarter 4 of financial year 25 gave a revenue from operations stood at 364 crore reflecting a 16% growth compared to 314 crore in QI. FY25 Q4 FY25 EBITDA for the quarter was 43 crores, marginally lower by 2% versus 44 crore in Q4 of FY25 EBITDA margin stood at 11.9% compared to 14% in the corresponding quarter last year.
Profit after tax was 27 crore, a decline of 5% from 29 crore in Q4 of financial year 25. Now full year 26 visa vis 25 revenue from operations for full year 26 to date 1260 crore registering a strong 27% growth over 989 crore in FY25 EBITDA increased to 157 crore up 17% from 135 crore in FY25 EBITDA margin was 12.5% as against 13.6% in FY25 PAT increased to 93 crore, a 20% growth over 77 crore in FY25 PAT margin stood at 7.4% compared to 7.8% in the previous year. The reduction in margin in Q4 and FY26 are due to forex loss.
Net loss of 3.9 crores and 6.04 crores respectively in Q4 and FY. Booked as other expense in Q4 due to sharp rupee depreciation which includes unrealized loss of 3.83 crores over 20%. Steep increase in steel prices in domestic market which hit the procurement cost of uncovered Aram raw material and sharp increase in export freight cost due to war impact. If we remove forex loss, adjusted EBITDA will be 13% in Q4 as well as financial year. Full financial year 26 export revenue came in at 166 crore representing a significant 156% year on year growth.
Net working capital stood at 39 days as of March 26 as compared to 33 days of March. Out of the net IPO proceeds of 259.32 crore, 137.81 crore has been utilized so far. That is 53% of the funds have been utilized as on March 31, 2026. During the quarter, 7.5 crore was utilized. Capex incurred in FY26 was 33 crores and capex planned to be incurred in FY27 is around 100 crores which will include capex for salon plant expansion part Capex for chair plant expansion which will be incurred in H2 and other regular capex.
That concludes with my update on the financial highlights of the company. I can now request the moderator to open the floor for Q and A session.
Malav Patel — Joint Managing Director
I will just add very quickly Kur just one very important piece. The total other income of 5.29 crores in Q4 and 15.67 crores for the full year actually includes 2.69 crores in Q4 as operating other income and about 9.63 crores on a whole year basis as operating other income which is primarily our export incentives and other operating income which we include as our operating income. This is just an additional data over to you moderator. Let’s open the house.
Questions and Answers:
Operator
Sure, sir. Thank you very much. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may enter STAR followed by one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may enter STAR and two participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Disha, please go ahead.
Unidentified Participant
Hello.
Malav Patel
Yes. Am
Unidentified Participant
I audible, sir?
Malav Patel
Yes.
Unidentified Participant
Yes. Thank you so much for this opportunity. Firstly, my question was on the EBITDA margins. You mentioned that we saw some pressure due to the war impact. So how do you see the margins overall for FY27 given the geopolitical. Yeah.
Malav Patel
So Disha, we have been actually internally working on this. First and foremost, let’s understand there are a lot of moving pieces which are still not under our control. While of course the management endeavor will be to make sure that whatever best we can do in terms of margins is fructified. But we feel that this is a bit premature for us to give any margin guidance for FY26 27 for three very clear reasons. One, the whole costing currently as you know steel prices have gone up by 20% just in last quarter.
Then the freights are very uncertain on the export freight availability of containers and freight it keeps on fluctuating very widely. FX we are not able to control exactly. While of course we have a good export order book of about 280 crores, we are hopeful of a continued stronger margin profile
Keyur Shah
But we want to wait and watch for at least one more quarter before which we will give any specific margin guidance
Malav Patel
At least till the conflict ends. And there is more clarity. Yes, because too many, too much of volatility and uncertainty factors which are becoming misleading. So we want to avoid giving you any guidances far as that goes. But growth as far as top line goes. I clearly mentioned in my speech that you know we are quite hopeful and confident about at least 23 25% growth because our order book is strong going forward as well as the pipeline, the kind of capex that is happening in the country and our increased focus in the export market we are quite confident about achieving the top lines that I’ve just mentioned.
Unidentified Participant
Okay, fair enough sir. And so coming on to your export mix, given you mentioned the tariff situation in North America is much better. How do you see the overall export revenues this year and what sort of pipeline do we have currently and what sort of order inflows are we expecting this year? Very
Malav Patel
Honestly speaking Disha, whatever plan we have is a top line for the current fiscal. You we already have that much work on hand. So going forward while there is pressure because of inflationary factors in the US the order closing has become a little bit longish. While our team is constantly endeavoring, being in touch with our end users, generating inquiries. The closure of the orders or the inquiries is not coming in as quickly as it used to four months back.
Unidentified Participant
But we
Malav Patel
Are quite hopeful the exercise is on, we are there on the ground and trying to fetch for new orders with the new tariffs. The reduction of course it is going to be a very balanced approach. We are going to try and improve our margin as well as create a good order book going forward. So it is going to be a good balance and this reduction in tariffs has definitely given us more opportunity to do that.
Keyur Shah
But I think we should be doing at least around 300 crores in this year on the exports as against 165. Yeah
Unidentified Participant
Okay, that is really good to know. And what sort of margin differential do we see in export projects and domestic projects? If you could just give more detail on that
Malav Patel
So currently Disha, it’s a current cost structure and pricing structure we are looking at about 16, 17% EBITDA on the exports. Visa is currently about 10, 11 that we are getting in the domestic market.
Unidentified Participant
Okay. And so just on the pipeline for the domestic front any sort of number we have while exports. I understand it’s going to be a bit challenging for you to give me a number for. But for domestic do we have any sort of number for the order pipeline that we’re currently chasing
Malav Patel
On a pipeline? See generally it is meaning one thing. I must say that our market has shown some real resilience because the pipeline or the inquiries on hand that we’ve had in the last three months are probably topping the remaining part of the year that just passed. We are quite confident given the pipeline that we have that going forward as well it will actually be depending more on my appetite to grab new orders. Right. Rather than market whether Capex is happening or not. So I think we are in a good situation in a lot of ways.
But these costs need to come under control. We’d be all the more confident about the order intake.
Keyur Shah
Just to add to that, this is Aditya. As of now the pipeline would be in excess of 1000 crores. From inquiries going on coming
Malav Patel
From different industries, different sectors. Yes, domestic.
Keyur Shah
To put
Malav Patel
Things in perspective like Aditya said you can consider about 1100 crores of pipeline.
Unidentified Participant
Okay. And so this 20,000 metric ton capacity that we’re adding in Sana which we are on track for commissioning by 2Q. We don’t see any delays.
Malav Patel
Q2 Q2, Q2 has been the plan and we are going to stick to it.
Unidentified Participant
Okay, that is great to know. Thank you. So that is it from my side and wishing you all the best.
Operator
Thank you. Participants with questions may enter star and one on their handsets. The next question is from the line of Hussain Baruch Wala from Carnelian Capital. Please go ahead.
Keyur Shah
Your
Operator
Voice is very feeble sir. Could you please speak up?
Keyur Shah
Yeah.
Operator
Yes sir. Please go ahead.
Keyur Shah
Yes sir. If you can just give us the breakthrough of the volume in terms of exports for the full year and and for the domestic that would be great sir.
Malav Patel
What we did last year you mean. Yeah. What is that? This is.
Keyur Shah
Yeah. No, no, no.
Malav Patel
So.
Keyur Shah
So export turnover for financial year 26 is 7045 tons
Malav Patel
Out
Keyur Shah
Of. Okay. Total 73 000. 7000
Malav Patel
Is export. Yes.
Keyur Shah
7000 is export. If you can give us the break of the other expenses that have shot up. I think you said about the Forex part. But what were the other reasons? If you can give us some breakup on that.
Malav Patel
Pardon, Other. I think mainly it is the expense. Yeah. Almost 50 crores plus is due to act. Okay.
Keyur Shah
There are three expenses, major expenses which is export duty, custom duty, export freight, sea freight and transportation which we incur in this USA after delivery to the site. So
Malav Patel
These are the three major expenditure which comes to around 40 to 45 crores out of the total.
Keyur Shah
Okay. And the last part which was the. Which has shot up is one of the reasons in export. Sorry. On the Forex side we lost 4 or 5 crores. On the logistics front, how much was the additional impact because of the war? If you can quantify that, see out of 6 crore of forex, 3.839 crore is of the last quarter and out of which 3.83 crore is unrealized loss. What is mean is this is based on the rate as on the 31st of March 26th. Right. Which was 94.728. So this is the impact of war on the forex.
Malav Patel
Yes,
Unidentified Participant
3.8 crore is the impact of war on the Forex
Malav Patel
From end of February till let’s say in a month. So
Keyur Shah
Just wanted to understand under Andy Wonder, on the Phoenix side, I think the volume growth for this quarter was quite weak. Any spilling reason on the PB side I think the volume group was. When you look at the year, on year volume growth, it was just 8% growth. So what was the prime reason for such a low volume growth in this quarter?
Malav Patel
I’ll. I’ll give you a couple of examples. See the input materials right after the war started. See generally January, February, March. But all the input materials which go into my manufacturing process, starting with the raw materials, you know, delivery started getting hampered. Right. And I would have lost about 10, 15% volume which I can account to the war situation. Gas supplies. Yeah, the mills were closed because the mills use humongous amount amounts of gas in the production process. Right.
So multiple factors. And that is one of the reason, one of the major reasons why we were not able to deliver the volume that we projected originally.
Keyur Shah
Okay. So raw materials availability was one of the key concerns as well as the raw material cost has gone up.
Malav Patel
Right. In our production process also we use gas. So there were days when we did not have any gas. Right. So all this trickled down to loss of production and the eventual volume.
Unidentified Participant
Still we achieved 8% growth with all these.
Malav Patel
Yeah. So rather than a 15% growth, we got 8% growth. That was the result.
Keyur Shah
And when you Say sir, next year I think 25% guidance that you have given. So in that what, how much, how much volume growth that you are factoring in?
Malav Patel
Volume. Hamara, Phoenix May for pre engineered buildings will go from 72 to 90,000.
Keyur Shah
Okay.
Malav Patel
Right. And. And in proplex it will go to 17 to 1725 lakhs. 17.25 lakhs square
Unidentified Participant
Meter.
Malav Patel
Phoenix May 85 to 90,000. That’s the volume growth we are planning about 20, 25%.
Keyur Shah
Got it. Got it. So if the war would not have been there, you were expecting around 15 volume growth here in this quarter as well. But because of the war you were able to only do 8%.
Malav Patel
Yes. Correct.
Keyur Shah
Got it. And is there any slowdown in the demand? If you can highlight on that one on the PEB side, is there any slowdown? So
Malav Patel
As I said in the for the earlier question from Disha, there’s enough traction in the market. Capex is still happening. You know. We have not seen any slowdown in the number of inquiries over the kind of projects. Even a warehousing developer is continuing with his development. And even a gigafactory is being built today. You know. So we are not seeing any slowdown so far.
Keyur Shah
Even, even at higher scene prices people are ready to buy.
Malav Patel
Yes. Oil and gas. Let’s see how things pan out.
Keyur Shah
Got it. Got it. Okay. Okay. That’s it for my head. Thank you. Thank you.
Malav Patel
Yeah. Thank you.
Operator
Thank you. The next question is from the line of Shivankar Gupta from Equity Capital. Please go ahead.
Malav Patel
Yeah. Am I audible? Yeah, got it. Got it. So just I think first question is on the order book itself. So the PPG says that order info was at around 390 crores. Out of which 75 was from domestic. Right. Which means observer order book would be 313 crores. Right. So just want to understand. I’ll correct you. The total order book in Q4 was about 388 crores. Majority of that was from the domestic market. We just highlighted one of the large orders that we got in Q4 which was somewhere in the 70s of crores.
Keyur Shah
Okay. Okay. Got it. Good. So I think I got it wrong.
Malav Patel
From the Indian market.
Keyur Shah
Okay. Majority from Indian market. Yes. Okay. Okay. I’m just going to understand first just building onto Hussain’s question. So export export on over this year is 7,000 tons out of 73k tons. Right around 910 last year.
Malav Patel
Yes. FY26. Correct. FY26.
Keyur Shah
Correct. Yes. So I just want to understand how has this number trended over the last three, four years from 21 to 24, from 22 to 25 fi.
Malav Patel
And
Keyur Shah
Then how do you see it moving in the coming
Malav Patel
Foreseeable years? Is there some estimate you’ve taken?
Keyur Shah
Yes, yes sir. For export we say we have 2400 ton done in 2526. It is 7400 ton and we expect 10,000 ton to be exported in 27, FY27.
Malav Patel
Going forward, the target is to maintain at least a 20, 25% growth. Yeah. Yes, easily.
Keyur Shah
Easily.
Malav Patel
Of course. Domestic. I
Keyur Shah
Have to give a disclaimer under normal operating conditions. Yes.
Malav Patel
And I will. And Kur can also give you share the numbers which we achieved as far as export goals further than FY24. Right. He will give you that number. That was very
Keyur Shah
Nominal number.
Malav Patel
You can say that our major traction started two years back. Right. And today we stand at 7,000. Next year we are targeting somewhere around 10,000. So anywhere between 20 and 25% growth we are going to chase.
Keyur Shah
Okay, okay. I mean that’s helpful. That’s helpful, sir. So I think you also mentioned that Q4
Malav Patel
You were expecting 15% growth rate. We saw 8%. Just wanted to understand. So along with let’s say the gas impact which you mentioned, the gas that you’re using in the production process, what were the other
Keyur Shah
Second other impacts of this war which have led to this? Let’s say like if you had to allocate one
Malav Patel
And major was the steel mills were not delivering on time because they also operate on gas. Right. And mills Bandviti. In the month of March, entire month of March, two major suppliers in India were shut down. Right. We were relying only on one other steel supplier. And that disrupted our material inflow. So that was another major, major reason. Even beyond gas, I would say.
Keyur Shah
Okay, okay, sir. So. So just, just kind of wanted to understand the supply side of the raw material. So going forward, are we planning to stick to these two main suppliers or are we more, let’s say no more fragmented in terms of our supply side, how is it
Malav Patel
We generally rely on these three suppliers who have been delivering on time till date. But that was an extraordinary situation. Very often, right sir, they are the
Keyur Shah
Largest.
Malav Patel
We are talking about Tata, jsw. But
Keyur Shah
Anyway, our things are normal now
Malav Patel
That’s another thing. But supplies are in place.
Keyur Shah
Steel prices have been increased in India in the last quarter by 20% plus frankly thanks to
Malav Patel
MIP. MIP. Because import price, minimum import prices are linked to dollars and freight and everything. So domestic mills immediately jack up the pricing. Correct.
Keyur Shah
Okay, okay, got it, got it. Most of that’s helpful and I think, I think that those were my questions mainly. Thank you for answering so nicely.
Malav Patel
Yep, thank you. Thank you.
Operator
Thank you. The next question is from the line of Anurag Patil from Quest Investment Managers. Please go ahead.
Keyur Shah
Thank you for the opportunity. So, sir, on the data center side, what is the actual scope of work for us?
Malav Patel
See, the quantum is, I can say in a very simple language that it will lead to a very humongous quantity coming in in the next five to seven years. But still, you know, the Indian companies, the Indian developers who are into data center development, you know, they, they contemplate between iron, steel and concrete, Right? Because they’re still exploring. The subject is new for them. Of course, they have International Tires, international consultants working on this. So actual number I will not be able to give you because it is still in a very, very nascent stage.
There’s only one or two companies which have actually executed data centers. One of them is Adani and the other one I think is Hiranandani or Raheja in Donone. Actual data centers they put in place. Right. But a lot of them are yet to come in the market. Now, what technology they use, how quickly they are going to come up with it, that is still, you know, premature to say.
Keyur Shah
Just to add to perspective, one data center thumb rule average is roughly around 12 to 15,000
Malav Patel
Tons.1 data center would be Bharat Steel. Yes. To put things in perspective,
Keyur Shah
Okay. But specifically with regard to data center concrete versus steel, how do we fare? Basically, if you can shut some light on that side,
Malav Patel
Again, you know, it is in a very, very premature stage because we are currently in fact working on a couple of inquiries for data centers. And the quantum would be around 50 to 60, 60,000 tons. Now, actual designs we are still in the process of understanding and we really are unaware of yet of what is going into making it with concrete. So once we actually execute a couple of them, I think we will not be able to give you that answer. But steel has its advantages. It is much quicker, it has a much faster turnaround time.
And the developers, if not today, will tomorrow see this difference in execution speed and which will be the winner again for steel construction.
Keyur Shah
Okay. Okay. And second question, sir, on the chair facility, we want to increase our utilization in FY27, but do we have enough order group from the South India region to ramp up that.
Malav Patel
Or it’s in a very final stages of closure? We have enough. We have good amount of work on hand which we can deliver in the next six to eight months. Currently we are working on orders which will come into execution beyond that.
Keyur Shah
Okay, that is from
Malav Patel
My side. Thank you. Thank you. Thank you.
Operator
Thank you. The next question is from the line of bandit Shah from Abacus Asset Management. Please go ahead.
Keyur Shah
Hi sir. Thanks for the opportunity. Sir, just one question. I had. We had given the guidance of 85000 tons. This is 20 volume growth. Secondly, we have even spoken that the steel prices have gone up by 20% quarter. I understand the order in hand will take six months for the completion. But can this 25
Malav Patel
A little bit more.
Keyur Shah
Assuming seven months of. Seven to eight months of completion,
Malav Patel
It will take around eight, eight, eight and a half months. So
Keyur Shah
The new orders. If the current steel prices are at the same level then the new orders will be at the increased price
Malav Patel
Coming at a higher price. Yes.
Keyur Shah
So that effect will be seen in FY27 or FY28.
Malav Patel
Partly in this year, partly in the next year.
Keyur Shah
So there can be a situation that 25 revenue growth we cannot face that based on the pricing
Malav Patel
Could be. You’re right. Bangalore. Correct
Keyur Shah
Answer. Secondly, on the just exports front. So now the direct situation directs are reduced to 25. So currently we are paying 25, right? Yes.
Unidentified Participant
Yeah.
Keyur Shah
So. So while it was 50, we were meeting the same margins around 16 17%. So despite the status going down, we are not increasing the margin.
Malav Patel
Going to try for. As I said in my earlier answer, I am going to try and balance out my margin improvement and getting new orders. But thereby increasing my customer base. I am being a little pessimistic while giving you the margins. Right. Because my input costs and all are still not exactly in my control. Right. I may book something today but I don’t know what the. The freight rates are going to be tomorrow. So I did not want to give any margin guidance whether it was for export or domestic. But this is just to throw a number at you.
We have spoken this number. But I still till I do not have control on my input cost, we will not be able to commit or give any guidance about these numbers.
Keyur Shah
So our export work is like. We ship from here to our. To a company in the US and then US company sells all over the places. Correct. So how do we manage a freight cost? Like if we want to protect ourselves in the current situation. So is there any strategy in place to protect that freight?
Malav Patel
Since since this steep increase in the last month and a half since the war began, we have started adding a little bit of more cushion. Right. What increases happen now? There was a $2,000 of war surcharge which the shipping line started imposing over and above the regular freight rate. Right. So when such an increase, you can never plan for such an increase. Right? You can maybe provide for a little bit of cushion. But now today when I’m quoting for a job, I am adding adequate question so that you know, if at all the oil prices go up even beyond what they are today, then I’ll be covered to an extent.
Operator
Once the participants line has been disconnected, we’ll move on to the next question. The next question is from the line of Aniket Madhwani from Step Trade Capital. Please go ahead.
Keyur Shah
Yeah, hello, I’m audible.
Malav Patel
Yes sir,
Operator
Please go ahead.
Malav Patel
I just want the clarification on the export side. So previous quarters we have seen the export contributed around 18% or so. And still we are on that number only. I mean we can see here 20% of this quarter’s revenue has been contributed by exports. So going forward do we
Keyur Shah
Look to increase this number? I mean if we even look at the order book, 280 year is from export size. Am I correct?
Malav Patel
Yes, yes. That is. That is our current year’s number that we have targeted.
Keyur Shah
Current year 275
Malav Patel
To 300 crores is what we are aiming at. And
Keyur Shah
Regarding volume. Yes. See currently export has contributed about 13% of the total turnover. Top line. As far as the financial year 26 is concerned, we aim it to maxim maximum up to 20%. So it will be gradually we will be increasing. Like say we, as we said, 10,000 tons in the next year. Say if we put 80 by 10,000 out of 85,000, what will be it will be around 14, 15%. Right? Is
Malav Patel
Your question Q4 versus Q3. This is one reason is revenue recognition. You can’t recognize the revenue till it reaches the correct part. Yes, you do. So the cut off was somewhere around February 10th or 12th. Shipments we have not been able to recognize as revenue this year.
Keyur Shah
Correct. Okay,
Malav Patel
So data amount was different. I mean
Keyur Shah
It will be booked now. This quarter. This
Malav Patel
Quarter. Okay. So this quarter will be in the terms of export.
Keyur Shah
So now it will be consistently good. I think
Malav Patel
Because this large order that is coming into execution, execution that will go on for another seven months. So we’ll be consistently delivering a second quantum month on month. Okay. And, and
Keyur Shah
May I know the amount that
Malav Patel
Got deferred? It would be difficult but goods
Keyur Shah
In transit would be around 8 to 10.
Malav Patel
Yeah, we’ll have to check. We’ll have to check. We’ll, we’ll check. That number and get back. Yeah
Keyur Shah
And what is the current capacity utilization and after the the phoenix the planets and get the commission what will be the utilization rate?
Malav Patel
See currently the salon plan last year executed meaning utilized about 70 any I think 75 76% which is the peak right after 20,000 tons expansion which is undergoing right now in the current fiscal with the outcome that we have planned it will be somewhere around 65 to 68% Chennai Chiar plant last year we did about 50 to 55% this year we will be crossing 68 to 70%.
Keyur Shah
Got it.
Malav Patel
Because of our product mix 75% would be the peak and regarding the raw material of course I mean company have plans to hedge against the steel prices or the gas prices in our country there’s no hedging possible
Keyur Shah
So Niket just to add as we have been explaining we three try to cover the raw material main raw
Malav Patel
Material still to the maximum extent possible for the given order inflow plus anticipated orders which are at the final stage problem you can cover with all your calculations you can’t go beyond 80 85. What is covered means we either place a form order either it has to be in my inventory or it has to be already ordered at the committed price by this big steel mill this is the state. This is the only way you can hedge. Yeah and it is.
Keyur Shah
We have found it to be the most effective. Correct. Because in no quarter you will see such a steep volatility that’s the real pain point.
Malav Patel
This is a. This is an extraordinary situation. You know we. We can never plan for this such situation. You know so. So I mean. I’m sorry to interrupt
Operator
Sir could you please return to the question queue we have several participants. Thank you Participants As a request please limit your questions to two questions per participant. We have many participants awaiting their turn the next question is from the line of Vaibhav Shah from Icarus Securities. Please go ahead.
Keyur Shah
Yeah thank you very much for the opportunity. I have just one question so what is our total employee strength at the FY26 end and how will it grow over FY27 and 28 and it will be really helpful if you could break it by the segment or the plant wise
Malav Patel
Employee strength. If we call white collar professionals it would be around 440 in Phoenix and about 150 to 160 in Proflex. This is the professionals workers the workers would be total both plants put together 1600. 1600.
Operator
Thank you. The next question is from the line of Arvind Arora a Square capital, please go ahead.
Keyur Shah
Yeah, so you mentioned like 80% contract in the current product book is like we have and 20% is open. So is it like we had and that that’s how we protect our margin or do we have price escalation closing our contract with the client?
Malav Patel
No, no. See our fixed price contracts because execution time wise it is anywhere between six months and 12 months, you know they don’t go beyond a year. And the industry trend is such that it is only based on fixed price contracts. So the moment we bag any of the orders, we secure this 80, 85% matt material either through our hard inventory in transit material or we will secure that 85% of the new order quantity with the mill. At least the price is fixed. Only thing that remains Open is that last 15, 20% of RM which generally is booked when my engineering and design gets finalized.
Keyur Shah
Okay, understood. And sir, in the inception you mentioned like there is an difficulty in the conversion to order in from last three to four months. So is it like because of these issue that you have mentioned or this is like some other issue at a company level or this is a theme at the industry level?
Malav Patel
I think you’re talking to export conversion inquiry into orders, right? This is, I think this was in context with export
Keyur Shah
Order.
Malav Patel
You’re talking about the timeline between inquiry and order closure. That’s what you’re wanting to know?
Keyur Shah
Yes.
Malav Patel
Yeah, yeah. See generally, generally in the US market it takes around six to eight weeks. Okay. What we have experienced in the last two months that eight weeks has become 12 weeks
Keyur Shah
Or even 16 or
Malav Patel
Even 16 because the larger the project becomes, the financial closures etc, etc, you know, take a much longer time. And in the scenario of rising cost, you know, the end users generally take their own time, make sure that all the resources are in place before they would get into any order closures with vendors like me,
Keyur Shah
Inflation in US inflation.
Malav Patel
So oil and gas prices, petrol prices have gone up to $4 and in some cases in California $7. So all these factors are weighing down on order closures and other matters.
Keyur Shah
Will there be any short term impact in the closing the order like due to. There might be a speculation from company side like to wait for three months to like so that the price could decrease or something like that.
Malav Patel
Meaning let’s say for example I am a customer who is not hard pressed on putting my new project up, would probably choose to wait for two months and see and see how the prices are going. That is a possibility, yes.
Keyur Shah
And so on the data center scene like when announced on the street, like as you said, right now it’s not possible. And there are certain works which is going on. So any timelines by then you can announce something.
Malav Patel
It’s an ongoing process and these are very, very large projects. And a lot of engineering goes into it. So the customer himself takes a very long time putting all the specifications in place. And then when it comes to me, my engineering department takes equal amount of time determining the design and the quantum of steel that is going to go in the building. Right. So it is a process. And the day we have that clarity, we will be more than happy to share it with you.
Keyur Shah
Okay, Understood. Thank you, sir. And all the best.
Malav Patel
Yeah. Thank you. Thank you.
Operator
Thank you. Participants, please limit your questions to only two questions. The next question is from the line of Ankur Gulati from Genuity Capital. Please go ahead.
Unidentified Participant
Thank you. And second 12.
Keyur Shah
My plane EBITA is 12.48%. And if you consider this forex which is half a percent, so that put together makes 13%
Malav Patel
Other income. The
Keyur Shah
Other income is
Malav Patel
As I said Ankurji, that other income has two components. Other operating. That other operating we include. We also include the other income. But even if we exclude the other non operating income, then also it will be in the range of about 12 and a half percent.
Unidentified Participant
If you can help us.
Keyur Shah
EBITDA is always with other income. Total other income, as we mentioned in the P and L. Right. So it is 11.9% what you are calculating, right? That is. That is we. You removed non operating income, right? That is to the tune of what 5.
Unidentified Participant
That
Keyur Shah
Is to the tune of 6 crore for full year. Right.
Unidentified Participant
So I’m looking at.
Keyur Shah
You remove that other income which is non operative to the tune of crore. That’s why you get 11.91%. Correct.
Malav Patel
And then you add your forex part, it will become about 12.5. Yeah.
Unidentified Participant
And this forex losses because of what hedge?
Malav Patel
No, no, this sudden rupee depreciation. And translation, mainly translation. You close your accounts at 95 rupees.
Keyur Shah
The post war situation in February, the dollars increased drastically from 8,990 to 9,470. And these have resulted into conversion of all the liability at 9478 which is notional. Right. But we have to account it for in the books of accounts as per the accounting stage standard which is to the tune of 3.83 crores. And this is the result.
Unidentified Participant
Okay. And sir, when does the lower tariff start? When in the quarter. Last quarter. What it’s implemented,
Malav Patel
It’s it’s implemented. So I think it came into effect sometime in April. I forget the exact date. I think it was around the 6th of April. So after that whatever our consignments reach will have an import imposition of 25 sectoral tariff
Unidentified Participant
And. Sorry to
Operator
Interrupt sir, but could you return to the question queue
Unidentified Participant
And I one more last one please. Okay. Yeah, yeah, yeah. So export 17 to. Let’s assume 17 or 14. This will now start showing up in Q2 because delivery. Right.
Keyur Shah
So 15
Unidentified Participant
To 17 of export and whatever the domestic is, let’s say 1112. That is something which will see in Q2. Is that fair?
Keyur Shah
As I said, you are broadly right. But we have not. We have decided not to give any specific guidance till we get much more clarity. Yes.
Malav Patel
Because my input costs are still not in my control
Keyur Shah
Domestic.
Malav Patel
So
Keyur Shah
That 1112 is a very very
Malav Patel
Good way of saying. But there is nothing like 12 in domestic.
Unidentified Participant
Okay, I’ll solve that in few. Thanks. Thank
Malav Patel
You uncle.
Operator
Thank you. The next question is from the line of Devang Patel from Samitra Capital. Please go ahead.
Unidentified Participant
I have a question on the working capital. If I see the operating cash now it’s -36 crores. Within that there’s an outflow of 179 crores. Because of trade and other issues. If I look at the issues in the balance sheet it’s of 47 crores. But in the cash flow the number is much higher. So the question is what explains the outlook on otf? Are there any? One option is
Keyur Shah
My working capital cycle is mix of the assets current assessments as well as current liabilities. As I we have put it into the presentation that is coming to 39 days for financial A26 right now. Now what. See now what happens See if you. If you see working capital changes which is affecting my cycle. Working capital changes is impacted by my payment to creditors or my in bill inventory building which is again payment to creditors. Now guys, now if you remember my IPO includes 65 crores of GCP that is general, general corporate expenses which is mainly used for the working capital.
Now as that fund is available I will obviously make the payment to carry tax. So which will result in two way. It will impact my working capital cycle adversely as well as it will impact my cash outflow from operations. Because. Because if I’m paying to my creditors. Because
Malav Patel
You are using long term sources
Keyur Shah
Of the fund. Right. And GCP is not part of the working capital inflow impairing my total cash outflow from operations.
Unidentified Participant
Okay, I got a point on payables on the receivables. I’ll connect with you offline. I just have a quick question on the tariff reduction order previous quarter. Now that the tariff has reduced, do you get to retain the benefit or is it passing
Malav Patel
A part of it? A part of it because that was the original clause in our contract that we have to. In case of any increase there would be sharing of the tariff and in case there is any reduction then also there will be a sharing of the benefit. So a portion we are going to keep and a part of it the customer is going to be taking advantage of.
Unidentified Participant
Thank you so much.
Malav Patel
Thank you.
Operator
The next question is from the line of Rishit Zaveri from CBA Asset Management. Please go ahead.
Keyur Shah
Thank you for giving me the opportunity. Actually my questions have been answered. Just one follow up on the previous participants. What will be the Q4 utilization for both the plants?
Malav Patel
Q4? My Sanon plant would be around 75% is operating whole year it operated at peak level. Right. And my JR plant about 52 to 55%.
Keyur Shah
Because the war has been extended even and spilled over in Q1. What do you see how much would be the impact on the utilization for Q1?
Malav Patel
See, basically it is going to be a peak at Sanon because I have adequate orders to continue and keep my shop floors low at both the plants. Even chair will improve. Yeah. Yeah. 100.
Keyur Shah
Thank you.
Operator
Thank you. The next question is from the line of Guru Darshan from Kitara Capital. Please go ahead. So your line is unmuted. You may go ahead.
Keyur Shah
I’m audible.
Operator
Yes sir. Please go ahead.
Keyur Shah
Thank you. I just had one question. It’s more of a clarification. Despite maintaining 100 years of inventory, your production in March was impacted. Considering the war situation escalated towards the end of February. Of course I’m assuming majority of raw material is in the form of raw materials and majority of inventories in the form of raw materials and work in progress. And assuming, you know 35 to three days inventory sits in production plant. I just wanted to understand the disconnect between you saying production was impacted versus 100 days of inventory.
Malav Patel
Because Guru open rakte that is generally non standard items. And without having these non standard items in my inventory, it affects my supplies. Because the customers generally don’t allow supplies to happen if the materials that are delivered are not installable. Okay. And that is why some of my large projects got the deliveries got impacted. As I said in the month of March, two large mill which are our major suppliers and entire month their Mill was shut. I was required to depend only on one mill.
And that one mill had pressure of delivery from all manufacturers like me as well as a hundred others. Right. So my delivery times got affected. Even that one mill that was running was encountering gas shortage. Right. Because gas is one of the main ingredients. Ingredients to run the plant delivery. So it was a double whammy. Right? Or gas shortfall. So what I was supposed to get into three weeks. Let’s say it took about seven, eight weeks to get the deliveries. That’s what impacts that last 15, 20% of the material also make a very big difference.
Keyur Shah
Okay, understood. Congratulations with a good number, sir. Considering the challenging environment. Thank you and all the best.
Malav Patel
Thank you for understanding.
Unidentified Participant
Thank
Malav Patel
You.
Operator
Thank you. The next question is from the line of Rajat Baldeva from Kizunu Wealth. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Thank you for giving me the opportunity. Just one question. Q4 order inflow of 287 crore down sequentially from 480 crore in Q3. And the current unexecuted order book is around 1082 crore against a revenue of 1,260 which implied a significant ratio of 0.86. How do you frame the adequacy of this cover? And what does the current bid pipeline look like in terms of value?
Malav Patel
Current build pipeline would be to the tune of 1000 crores. You know, these are inquiries from different sectors. Generally the industries that we cater to. It would be a good mix of large orders, medium orders and small orders. So the big pipeline is strong and we are confident now. Let’s hope it remains that way in the coming time. Because still even as we speak the uncertainties are still loose.
Unidentified Participant
Okay, just one last question. Just want to confirm, correct me if I am wrong. Given the situation because of steel price volatility, 20, 25% steel price hike from 49, 500 per ton to 58,500. So. And demand is also robust. So are you being able to perform the price? Correct me if I’m wrong.
Malav Patel
Right. So that’s what we are practicing. That we never hold back the increase. If there is already not a contractual sign off happen between me and the customer. Unless and until I receive the advance, the price is not fixed.
Unidentified Participant
Okay, thank you.
Operator
Thank you. The next question is from the line of Dharmal Shah from Dalmas Capital Management. Please go ahead.
Keyur Shah
Hi. Thank you for the opportunity. So therefore that to confirm the volumes you mentioned for exports were 7000 FY26 and 2400 for FY25. Right?
Malav Patel
Yeah, yeah. That’s right,
Keyur Shah
Yeah. So just continuing on this I mean basis these numbers export realizations are somewhere around 2.3 2.7 lakhs per ton versus I mean if I compare it to the domestic realization, it’s almost 2x of what we domestic market. So why is this difference? And if even if we compare it to some of the US PEB companies, it’s still, I mean quite high. So explain what the difference is and why is it so stark difference?
Malav Patel
Basically there is a large chunk of materials that we buy from the local market. Okay. They are called bought out in our language. Okay. There are buildings which require several such different kinds of bought outs. And the price of those bought outs coming from the US is comparatively much, much higher than what it is in India. Right. They can range anywhere between lakh rupees a ton to let’s say 2 lakh rupees return. It depends on the item that we are sourcing. So it would have so happened that in the orders that we executed where you realize this price, the amount or the quantum of bought out from the US markets would have been on the higher side.
And that’s why this price per ton that you see is two to three times higher than the Indian prices plus freight plus rate we have. It’s a combination of everything
Keyur Shah
Underships of the parts we source from us. I mean are those any different in terms of.
Malav Patel
Yeah, yeah. The qualities are different, the specifications are different. You know, there’s many, many variables because there in the US market, you know, the aesthetics of the buildings that we generally measure are very different than what we actually do in India. It’s a mix of commercial as well as industrial buildings. And not only industrial. Whereas in India in 99% of the cases it is only industrial.
Keyur Shah
Understood. But despite duty, in fact realizations have come down at least in the export business. But maybe it will be a product
Malav Patel
The impact on a market, you know, meaning we’ll see that impact in the coming quarters.
Keyur Shah
And again just comparing the other expenses across the two year, I mean it has almost increased by 90%
Unidentified Participant
From 88 crores to 161 crores. Probably you already explained but just wanted to know what was the major reason.
Keyur Shah
Major thing is export as we said. Because see we during the last two, two to three years our export has increased multifold, say like 65 crore to 165 crore in one year. Right. So based on that all exporting expenses which is duty as well as silver and local transportation in USA is clubbed and put as an Export expenses in the other expense schedule and which is the main major component of that increase.
Malav Patel
In the coming time, you know you’ll see this number jump up because the number that we are targeting in this year is again almost double. I think if not double then at least 80% more. So you will see more of it coming in the coming time.
Keyur Shah
40% of the total expenditure is export.
Malav Patel
Yes. Other
Keyur Shah
Expense. 40% of the other expense is export expense.
Unidentified Participant
Got it. And if you look at the cash flows for last two years, cash flow from operations have been quite weak. In any particular reason?
Keyur Shah
No sir, as I explained earlier see cash flow operations get version when we make make the payment now since last two years due to positive one, what we do is we do cash purchases, right? And on top IPO fund availability of gcp. Also we made cash purchases and payment to creditors which has resulted into lower means negative cash flow from operating. Actually if you see my balance sheet, we are sitting on the 90200 crores of cash balance which is not counted in this thing. Right. This is the reconciliation figure.
So if, if you see just take one figure of 64 crore of GCP and my cash flow from operation is say 30 crores
Malav Patel
Negative.
Keyur Shah
Negative. So if you remove this 64, it is 34, 34 crore positive rather because 64 doesn’t form part of my working capital means operations case. Simply
Malav Patel
Put, when long term resources were used to reduce your creditors and they are buying cash. So there is always a positive generation but additional long term resources used reduce the level of creditors and therefore this dichotomy appears but it is actually not so. And
Keyur Shah
This long term one was used because of the object in the ipo.
Malav Patel
Yeah, that’s fine. Yeah, yeah.
Keyur Shah
Thank you.
Malav Patel
Thank you.
Operator
Thank you. The next question is from the line of Webhook Shah from Aquarius Securities. Please go ahead.
Keyur Shah
Thank you very much for the opportunity. So just continuing on my previous question, while you have mentioned employees, could you mention how it will grow over FY27 and 28.
Malav Patel
My production team will go up by about 200 people in Sanam. I’m talking about the workforce. I’m talking about the workforce. And if you see my shop floor engineers and supervisors and my project management department, it would be around 25 to 30 professionals.
Keyur Shah
Nothing much really. And for Chairman
Malav Patel
Any, we are just recruiting to you know, fill the gap expansion. So whatever number of people are missing currently that we are planning to fill out and that would be to the tune of around 25, 30 people. This is the workforce, not professionals.
Keyur Shah
Okay, thank you.
Malav Patel
Yeah. Thank you.
Operator
Thank you. The next question is from the line of Richard Savary from CBA Asset Management. Please go ahead.
Malav Patel
I think operator, this should be the last question. Yes,
Operator
Sure sir.
Keyur Shah
Thank you. Thank you for the follow up. Sir. I just wanted to understand because we are giving cash purchases to procure the raw materials. Yeah. Cash purchase always give some some benefit out of it. But very little means half a percent or so. Thank you. On debt purchase. Yeah.
Operator
Thank you. Ladies and gentlemen. That was the last question. I now hand the floor back to the management for closing comments.
Malav Patel
Yes. Thank you everyone. On behalf of the management of MNB Engineering Ltd. We thank you for all for joining us on our post earnings call today. We, we hope we have been able to address majority of your queries. You may reach out to me or our investor relationship partner Ernst and Young for any further queries that you may have and they will connect with you offline. Thank you. Moderator. We can close the call now? Yeah, sure sir. Thank you very much. Thank you. Thank you
Operator
All on behalf of M and B Engineering Limited. That concludes this conference. Thank you all for joining and you may now disconnect your lines. Thank you.