Manaksia Coated Metals & Industries Ltd (NSE: MANAKCOAT) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Karan Agrawal — Wholetime Director
Analysts:
Samiksha Ramteke — Analyst
Unidentified Participant
Abhishek Sharma — Analyst
Priya Jain — Analyst
Ankur Parekh — Analyst
Presentation:
Operator
Ladies and gentlemen, Good day and welcome to the queue. Q3 and 9 months FY25 results Conference call of Manaxia Coated Metals and Industries Limited 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Samiksha Ramteke from Kirin Advisors for the opening remarks. Thank you. And over to you ma’am.
Samiksha Ramteke — Analyst
Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Manaksha Coated Meters and Industries Ltd. From management team we have Mr. Karan Agrawal, full time director. Mr. Mahindra Bum, chief financial officer and Mr. Tushar Agrawal, senior Vice President. Now I hand over the call to Mr. Karana Agrawal. Over to you sir.
Karan Agrawal — Wholetime Director
Good afternoon esteemed ladies and gentlemen. I extend a warm welcome to all of you who have joined us today for Manaksia Coated Metals and Industry Limited earnings call. We will discuss our financial. Financial and business performance for the third quarter and nine months of financial year 25. Before we dive into the specifics, let me take a moment to provide a brief overview of our company and its business model. At Manaksia Coated Metals and Industries Limited we take immense pride in being one of the leading manufacturers and exporter of coated steel products. Our product portfolio primarily includes pre painted galvanized steel and plain galvanized steel in both coil and sheet forms. Catering to industries such as construction, automotive, appliances and general engineering, we operate with a strong commitment to quality, innovation and customer satisfaction. Our state of the art manufacturing facility in Kutch, Gujarat plays a pivotal role in our operational efficiency. With proximity to major ports like Kandla and Mundra, we have a logistical advantage that enhances our ability to serve both domestic and international markets efficiently. With two manufacturing plants, four branch offices and five stockyards and service centers, our nationwide presence ensures seamless supply chain management and timely delivery of high quality products. Now let me take you through our financial performance for the reported quarter and completed nine months of the current year. Our Q3 FY25 consolidated revenue grew by 17.68% quarter on quarter to rupees 207.83 crore driven by strong demand and higher sales volume. EBT surged by 113.26% quarter on quarter to rupees 6.71 crore reflecting improved operational efficiency and margin expansion while net profit increased by 111.93% quarter on quarter to rupees 5.01 crore reinforcing our commitment to profitable growth. Our EBITDA rose by 22.25% amounting to rupees 17.25% rupees 17.25 crore with an EBITDA margin expansion of 103 basis points now standing at 8.30%. Our EPS for Q3FY25 improved by 13.56% year on year to Rs 0.67. For standalone Q3FY25 net profit witnessed a substantial surge reaching rupees 5.08 crore, a remarkable increase of 109.12% from the previous quarter. The net profit margin also improved considerably reaching to 2.44% for nine months ended FY25 EBITDA. EP rose by 72.29% year on year to Rs 13.88 crore and net profit grew by 67.61% year on year to rupees 10.35 crore showcasing sustained financial strength and EPS increased by 54.44% year on year to rupees 1.39 highlighting consistent earnings growth. This quarter also marked significant production growth with production of galvanized steel rising by 10.34% year on year and pre painted steel Production increasing by 32.40% year on year. The strategic shift towards high value pre painted steel continues to be a key growth driver with its revenue share increasing to 75.10% in Q3 of FY25 which is up from 61.40% in Q3 of FY24. This is further strengthening our top line and margin expansion. Exports remain a key growth pillar and I am happy to report that our Q3 export revenue increased by 87% year on year to Rs 96.73 crore. The contribution of exports to total revenue has grown significantly rising to 41% in Q3 of FY25 from 25% in Q3 of FY24. Our landmark export order of rupees 200 crore coupled with a strong rupees 350 crore export order book underscores our growing global presence and credibility to support our long term growth. We have successfully secured rupees 134.55 crore in fresh equity capital which will be strategically deployed for capacity expansion, technology upgradation and debt reduction. Our ongoing ALU zinc technology upgrade will further strengthen our product offerings ensuring enhanced durability, corrosion resistance and competitiveness in the market. Additionally, in line with our commitment to sustainability and cost optimization, we are actively working on land acquisition for a captive solar power plant. This initiative will reduce our energy costs significantly and help in minimizing the carbon footprint from our production process. Looking ahead, we are well positioned to capitalize on emerging opportunities in the coated steel segment. We are in advanced stages of installation and upgradation. Of our Alu zinc coated steel capacity line to 1 80,000 tonnes per annum. Groundwork for our phase two expansion for enhancing the pre painted steel capacity to 2 36,000 tons per annum has also started and we are confident of achieving this milestone within FY26. These capacity enhancements will further strengthen our ability to meet growing market demand, improve operational efficiency and drive long term value creation. With a strong foundation in place, we remain committed to expanding our product offerings, enhancing quality and maintaining our leadership position in the industry. I would like to take this opportunity to express my sincere gratitude to our dedicated team, valued customers and esteemed shareholders for their unwavering support and trust in Manaxia Coated Metals and Industries limited. We remain committed to driving operational excellence and long term value creation. With this I now invite questions from investors and thank you very much for your time and continued support.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, participants, you may press Star and one to ask a question. Now
Our first question comes from the line of Jera Jane, an individual investor. Please go ahead.
Unidentified Participant
How does the current.
Operator
So you’re sounding muffled if you’re using speakerphone. May we request to use handset please?
Unidentified Participant
Okay. Am I audible now?
Operator
Yes, so please go ahead.
Unidentified Participant
Okay, so tell me, how does the current 350 crore export order book compared to previous period? And what regions are driving the demand?
Karan Agrawal
Mr. Jain, thank you for your question. Well, the export order book currently which is rupees 350 crore. Crore is on a higher side currently on account of the recent landmark export order that we bagged which was a single order of rupees 200 crore. This was done during Q3 of the Financial year and typically we see a position where our export order book is full for for a period of about three to six months in that range where the value of export order book should be anywhere between 175 to 200 crores. But due to this large value export order in hand, currently our export order book is standing at rupees 350 crore. Answering your question about what is driving the demand. Well I would say multiple factors. Today on the export side the European market is the main market that we are catering to in terms of our finished goods which we are exporting. And we are seeing a revival in many pockets in Europe where in Eastern Europe we are seeing a big surge in demand due to the rebuilding activities in Ukraine. And for this there are many many buyers who are buying building material such as galvanized and pre painted steel from Indian market and other supply markets which consist of galvanized and pre painted steel products. Apart from that there are pockets of growth happening in Eastern Europe, in Southern Europe, in countries such as Spain and Italy which is seeing robust industrial growth where we are also having a big customer segment and consistent long term customers in those countries which are supporting our export business. So I think these are the main reasons where we are seeing robust export demand.
Unidentified Participant
Okay, the next question I have is could you provide an update on the alucing technology upgrade project and how will it enhance product offering?
Karan Agrawal
Absolutely. So the alu zinc technology upgrade and the capacity expansion that we are doing will lead to about 35 36% of capacity enhancement for us where upon completion we will be able to produce about 1 lakh 80,000 tons per annum of of all using product. And currently the project is in advanced stages of completion and we are quite confident that this line will generate will start generating revenue in the first quarter of the coming fiscal. So. By this I mean anytime in the Next, let’s say 75 to 90 days. We are quite positive of achieving well within this timeline. On the product side, Alu zinc is definitely a much more superior product due to its superior corrosion resistance properties, better aesthetic properties and lower weight in terms of the coating mass which is required to achieve a higher protection.Due to these reasons, the product is much superior for an end user and for a producer it is superior since it leads to good extent of margin expansion.
Unidentified Participant
I see. So the last question I have is what are the expected benefits of the captive solar power plant project in terms of cost savings and sustainability?
Karan Agrawal
On the benefits of the captive solar power plant? Sir, it is obviously very clear that today the cost of solar power plant solar power is way lower than conventional grid power. So just to give you an example, on the grid power that we are purchasing, it is costing us anywhere between rupees nine to rupees ten per unit depending on peak non peak hours. Whereas the cost of the solar power depending on the investment being done can range anywhere between two to three rupees a unit.
So the saving is drastic and leads to a direct and immediate impact on the bottom line of the company. And this is obviously apart from many other benefits which are on account of, let’s say reduced carbon footprint and being eligible for a greener product, a more cleaner process and things like that. And of course, yes, the company would be eligible to enjoy the government incentive of accelerated depreciation as well.
Unidentified Participant
Okay, well, thank you doctor. My side.
Karan Agrawal
Thank you.
Operator
Thank you. A reminder to all the participants, if you wish to register for a question, please press star n1 on your Touchstone phone. The next question comes from the line of Abhishek Sharma from JY Capital. Please go ahead.
Abhishek Sharma
Hello sir. Am I audible?
Operator
Yes sir, please go ahead.
Abhishek Sharma
Some of our question is what percentage of your exports scatter to the European market And are there plans to expand into new international markets?
Karan Agrawal
Sure. Well, the European market consists of very high percentage. Percentage of our exports which is currently at upwards of 90%. And yes, we do have ambitions to grow our presence in other continents for export. We are aggressively looking at the Americas which consists of the north and South American regions for exporting our Alu zinc product in the near future. Because there is a great amount of demand for aluc and pre painted Alu zinc in those regions. And we feel that it would be the next right move for us to expand our presence in the global market.
Abhishek Sharma
Okay, so my next question is, can you elaborate on the product mix strategy especially with the rising share of pre painted steel?
Karan Agrawal
Sure. So for the immediate future let’s say our share of pre painted product versus the unpainted product would be anywhere in the range of between 75 to 80% of the total production. This is obviously because the higher value addition we do which is by doing color coding or by producing pre painted the margins or the value addition is higher as compared to the interim product which is galvanized or they are using in the near future.
In phase two of our expansion strategy, we are adding a second color coating line which will enhance our pre painted capacity in line or higher than the alluzing capacity. When that situation comes sometime during the, you know, the later part of FY26. At that point of time, definitely one can expect a situation where all of our production and sales is happening only from the pre painted steel product.
Abhishek Sharma
Okay sir, that’s it. So much. Thank you.
Karan Agrawal
Thank you.
Operator
Thank you. Next question comes from the line of Priya Jain from Green Capital. Please go ahead.
Priya Jain
Hello.
Operator
Please go ahead ma’am.
Priya Jain
Hello. Am I audible?
Operator
Yes ma’am. Please go ahead.
Priya Jain
Hello sir, excited to hear about the solar power plant project. Could you provide an update on the expected common timeline and key milestones achieved so far?
Karan Agrawal
Sure. So the solar power plant we have been, you know, it has been on the. Drawing board stage for some time. But now there is some amount of clarity on the government policy which was undergoing some changes from the Gujarat government side or captive solar power plant installations. Now that the policy is clear, we are now actively doing our due diligence on the identified land parcels that we have already identified in consultation with our EPC partners. Along with that, negotiations and comparisons of various proposals of EPC installers are in process. In terms of completion, like I have mentioned in my opening remarks, FY26 will definitely see this project being commissioned. But I mean I can say sometime during Q2 of FY26 is a reasonable expectation.
Priya Jain
Also sir, could you share more details about the export contract mentioned? Especially who are the counterparties involved and what agreements have been finalized by Manakya?
Karan Agrawal
I’m sorry, what was the last line you asked?
Priya Jain
Basically if you can name who are the counterparties involved and what are what agreements have been finalized by Manakshiya?
Karan Agrawal
Well ma’am, actually due to obvious reasons of confidentiality and protection of our own business interest, I would not be able to disclose the name of the party that we have contracted with. However, I can disclose that this is an arrangement that is going to last a period of 12 months within which we have to complete the entire order. And it is with our existing long term customers in Europe to whom we are supplying galvanized and pre painted steel products and after continuous relationship with them for over five years, we have reached a point where they have shown their confidence and strength in the relationship to bless the relationship with such a large value order.
Most of the order, let’s say 80% of the order consists of supply of pre painted steel products and about 20% of it consists of supplying of galvanized steel products. All of it is going to the European market to our existing customer with whom we have signed the order. Is it FOB or how it is typically no. Most of our exports, I would say 9 out of 10 orders are on a CFR or a CIF basis where the exporter, which is us, we take care of the fob cost, the ocean freight up to the discharge port in the European market.
Priya Jain
Sir, like galvanized you mean or alucheng.
Karan Agrawal
Sorry,
Priya Jain
So you mean Galliv nitrate or aojink?
Karan Agrawal
I. I’m sorry, I’m not able to hear you clearly.
Priya Jain
So is it like galvanized you mean or Alu Jeng?
Karan Agrawal
No. The current order that we have signed, like I said, of this 200 crore value is, is having an option to supply galvanized or Alu zinc. Whenever we have successfully converted our line, upgraded our line to Aluzinc we can switch the production to Aluzinc and continue supplying under the order with the underlying aluzinc product.
Priya Jain
So what is most profitable or value wise better?
Karan Agrawal
I mean Alu zinc is definitely a more profitable product for a producer. And we are quite sure that when we are able to switch to alucing technology from our side, after the upgradation is complete, we will be able to see the benefits and the dividends from this upgrade. The nature of Alu zinc is such that aluminium consists 55% of the coating mass. Whereas in galvanized it is 100% zinc and in Alu zinc it is 55% aluminium and 43.5% zinc. So naturally the cost of aluminium is much lower than the cost of zinc. Which helps reduce the raw material cost and gives the benefit of low cost production to the producer.
Priya Jain
Thank you sir. Good to thank you.
Operator
Next question comes from the line of Ankur Parikh from Bajaj Holdings. Please go ahead.
Ankur Parekh
Yeah, hi. Am I already. Hello.
Operator
Yes sir, please go ahead.
Ankur Parekh
Yeah. See I’m an investor in personal capacity and that’s where I’m coming from. I just wanted to understand that with such a huge fundraise that you have done, what is the expected roe roce that will be generated over a period of two, three years? Is there any kind of extraordinary revenue generation that you are expecting because of this capital deployment and all? Just if you can throw some highlights on that, please.
Karan Agrawal
The current fundraise that we have done is going to help us in three ways. One is obviously completion of our projects that are under commissioning, which is the Alugig project. The second is the solar power plant project. Another way that the fundraiser is going to help us is to reduce our debt and reduce our finance cost in the company.
And of course it is going to help with additional working capital that is required to utilize the enhanced capacity that we have installed. So this fundraise is quite critical to elevating our overall profitability, which will automatically result in a much higher or uplifted return on capital or even the return on equity. As and when we are able to get the capacity utilization at a reasonable level, which is higher than 75, 80%, I think the, you know, the benefits in terms of the bottom line will be quite significant. When I say quite significant. We are expecting, you know, a very handsome enhancement in the bottom line due to the cost saving of the raw material and the enhanced, you know, realization per ton of the finished product.Definitely we will be seeing much, much better ROCE and ROE numbers to give you exact projections. I would seek some more time and probably we can get back to you through our ir, you know.
Ankur Parekh
Thank you.
Operator
Thank you. A reminder to all the participants, if you wish to register for a question, you may press Star and one on your Touchstone phone. The next question comes from the line of Pooja Gupta, an individual investor. Please go ahead.
Unidentified Participant
Hello, I’m available to you.
Operator
Yes, ma’am. Please go ahead.
Unidentified Participant
Yes, my question is how is company positioned to leverage the rising demand for coated metals in construction, automotive and other industries?
Karan Agrawal
Company is basically in the market. To sell its products to these end users, which is building material and construction industry, to your appliance industry, which consists of industrial and home appliances, and also to a part of the automotive industry, which consists of bus body building. With our investments in increasing the capacity, we are very well positioned to capture the enhanced demand that the country is going to see on account of the GDP growth and government initiatives and also hopefully the reduction in the benchmark interest rates which is all going to help increasing demand of all these items. We are very well positioned to capture the opportunity.
Unidentified Participant
Okay, sir, my next question is could you provide insight on the pricing trend and raw material cost affecting the coated steel industry?
Karan Agrawal
The pricing trend as such for steel products is, has been, let’s say from flattish to negative in that range. This is because of obviously over supply in China, over capacity in China and also due to reduction of raw material costs such as iron ore and coal and coking coal. I feel that given this current situation of volatility and wars going on in the Middle east and Russia, Ukraine, also due to some protectionist measures and massaged by the Trump administration, the prices of steel and other similar commodities should be stable and we do not expect any major jump or a hike in the price of steel for the foreseeable couple of quarters.
Unidentified Participant
Okay, sir, thank you. Thank you very much for answering all questions.
Operator
Thank you. Next question comes from Mahesh Seth, an individual investor. Please go ahead.
Unidentified Participant
Hello.
Operator
Yes sir, please go ahead.
Unidentified Participant
Yeah, can you hear me?
Operator
Yes sir. Please go ahead.
Unidentified Participant
Yeah, so my first question is that how does the current 350 crore rupees export order who compares to.
Unidentified Participant
Various periods earlier.
Karan Agrawal
I think I’ve answered this question to the first, but I’ll still say it once again. Typically we see export order book of between one to two quarters in hand. So our export order book typically is anywhere in the range of 175 to 200 crore rupees in hand in most periods of time. But due to this, you know, landmark export order that we have backed of a very large value, currently our export order book is at 350 crore rupees.
Unidentified Participant
Okay, and also tell me that what regions are driving this demand?
Karan Agrawal
This is also something that I answered to the first caller. The reasons for drive in this demand is because we are seeing a significant amount of growth in certain pockets of Europe where we are seeing in the Eastern European side good growth happening due to the rebuilding activities in Ukraine and good GDP growth in certain Eastern European markets along with a very stable and growing market for industrial goods in southern European countries like Spain and Italy where we have long term customers.
Unidentified Participant
Okay, got it. And can you also tell me what are the expected benefits of the capital solar power plant project in terms of cost saving and sustainability?
Karan Agrawal
Captive solar power plant project has a direct impact on the cost saving since the solar power is much, much more cost efficient. In terms of the generation cost is zero. But the effects that is done for the solar power plant results in a cost per unit of anywhere between rupees two to three per unit including the transmission cost. This is at least a third of the grid power cost.
So it is having a direct and immediate impact on the bottom line of the company. And in terms of sustainability also is definitely a much cleaner and a much greener form of energy, renewable energy. And it helps in us being eligible to move our product to, you know, green steel and lowering our carbon footprint on the product which is going to help our export customers.
Unidentified Participant
Okay, got it. And can you also throw.
Unidentified Participant
An update on aluzinc technology upgrade project and how will it enhance the product offering?
Karan Agrawal
The aluzinc project like I mentioned before is in advanced stages of completion and we are quite confident of achieving commissioning and the start of revenue generation from this project from Q1 of FY26. And the product offering will also become superior since Alu Zinc as a product inherently is a much more superior product in terms of corrosion resistance aesthetics and in terms of performance on account of the rust prevention and other climatic effects on the substrate. So it is going to benefit us because we will be able to high value added industries like pre engineered building and sandwich panel segment which are widely using and using product today.
Unidentified Participant
Okay, got it. Thank you sir. That’s it from my sir. Thank you.
Operator
Thank you. Before we take the next question, a reminder to all the participants. You may press Star and one to ask a question. The next question comes from Priya Jain from Green Capital. Please go ahead.
Priya Jain
Hello sir, I have a follow up question with me. How will solar plan community happening phase five or Just wanted to like understand our ownership of these model.
Karan Agrawal
I. Again your voice was not very clear but from whatever I understood ma’am, I. I think you are asking what is the end of ownership model that we are going to have on the solar power plant? Is it?
Priya Jain
Yes sir.
Karan Agrawal
Right. So for this the company will be acquiring land and we’ll be doing the capex using a mix of debt and equity and will be owning the entire asset. And that will be the model that we will be having. Only the your O and M part will be given will be outsourced to professional, you know, contractors who take care of the O and M part.
Priya Jain
Okay. So have we finalized the land passes?
Karan Agrawal
Like I mentioned in my remarks, the land multiple parcels of land have been identified. The process of due diligence is currently on where we will identify the right land parcel which is most suitable in terms of yield and in terms of the cost and will be financing. Very shortly.
Priya Jain
But if you can say but how much time it will take to install and
Karan Agrawal
One can fairly estimate the completion of this project by Q2 of FY26.
Priya Jain
Okay, fair enough though it will supply to greed, right?
Karan Agrawal
Absolutely. In any captive solar power plant, the supply has to be made to grid and the company or whoever is the consumer needs to purchase that power from the grid itself.
Priya Jain
Okay, so thank you so much for explaining all the bits.
Karan Agrawal
Thank you.
Operator
Thank you. The next question comes from the line of Swaraj Singhanya, an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes, please go ahead.
Unidentified Participant
Yes. My first question is how do you plan to mitigate the raw material price volatility while ensuring stable margins?
Karan Agrawal
Well, thank you for your question. Our raw material is basically procured largely on a back to back model where we are booking our orders from export customers and OEM customers and then proceeding with booking the raw materials required against the order bookings that we have made.
So in essence, by the nature of our business model, which is largely back to back, we are always protecting our margins. By following this model, there is a certain exposure to a spot market which could be, let’s say 20, 25% of the business volume. But this gets protected since the exposure time is not too large between the buy and the sell, it happens within the same month. So the volatility that we are exposed to is not more than, let’s say a month or one and a half month max. And largely 75 to 80% of our business is back to back.
Operator
So Raja, you have any further questions?
Unidentified Participant
No sir, that’s it from my side. Thanks.
Operator
Thank you. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I would now like to hand the conference over to Ms. Samiksha Ramdike for closing comments.
Samiksha Ramteke
Thank you everyone for joining the conference call of Manafort Trade, Metals and Industries limited. If you have any queries, you can write to us at research title advisors.com. once again, thank you for joining the conference call. Thank you sir.
Karan Agrawal
Thank you all.
Operator
Thank you on behalf of KDN Advisors. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.