Manaksia Coated Metals & Industries Ltd (BOM:539046) Q1 2027 Earnings Call Highlights: ...

Manaksia Coated Metals & Industries Ltd (BOM:539046) Q1 2027 Earnings Call Highlights: ...

Stocks end lower as tech bleeds, Fed policymaker calls for ’modestly higher’ rates GuruFocus - - Revenue: INR263 crores, up 15% quarter-on-quarter and 3.6% year-on-year. - Price Realization per Tonne: INR88,597, up from INR79,180 in Q4 FY26, a 12% increase. - EBITDA:

INR29.08 crores, up 86% quarter-on-quarter; margin improved by 422 basis points to 11.06%. - EBITDA per Tonne: INR10,400, the highest recorded. - Profit Before Tax (PBT): INR18.93 crores, up 197% quarter-on-quarter.

- Profit After Tax (PAT): INR14.10 crores, up 163% quarter-on-quarter; PAT margin improved by 301 basis points to 5.36%. - Earnings Per Share (EPS): INR1.31, up 102% quarter-on-quarter. - Cash Profit: INR17.40 crores, up 115% quarter-on-quarter.

- Finance Costs: INR6.86 crores, reduced by 11.8% year-on-year. - Alu-Zinc Output: 27,941 tonnes, up 8% quarter-on-quarter. - Pre-Painted Production: 20,510 tonnes, 95.4% utilization.

- Total Sales Volume: 27,938 metric tonnes; 74% Pre-Painted Steel, 26% Alu-Zinc. - Export Volume: 18,221 metric tonnes, 65% of total volume; export revenue grew 20% year-on-year. - New International Markets: Entered Latvia, Brazil, Jamaica, and Somalia.

For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points - Manaksia Coated Metals & Industries Ltd (BOM:539046) reported a strong Q1 FY27 with a 15% quarter-on-quarter revenue increase and a 3.6% year-on-year growth. - EBITDA improved significantly, up 86% quarter-on-quarter, with margins recovering by 422 basis points to 11.06%.

- The company achieved its highest ever EBITDA per tonne at INR10,400, indicating healthy unit economics. - Exports contributed 65% of total volume, with export revenue growing 20% year-on-year, and the company entered four new international markets. -

The upcoming second color coating line and a 7-megawatt solar power plant are expected to significantly boost capacity and reduce energy costs, respectively. - The company faced a marginal decline in volume compared to Q1 FY26, attributed to the gradual ramp-up of the Alu-Zinc line. - There were teething troubles with the new Alu-Zinc line, which affected the pace of ramp-up.

- The company is planning significant CapEx, estimated at INR350 crores, which will require a mix of internal accruals, debt, and equity, potentially increasing leverage. - The working capital cycle is currently long at about 75 days, though expected to improve with future projects. - The company faced cost pressures due to a spike in LPG prices during Q4 FY26, impacting EBITDA margins.

A: The EBITDA per tonne achieved in Q1 FY27 was due to the ramp-up of Alu-Zinc capacity utilization and strong export delivery. As we continue to ramp up capacity and add the second color coating line and solar power plant, we expect further strengthening of the EBITDA margin profile. Q: How are you planning to fund the announced CapEx, and how much CapEx is done and how much is left?

A: The total CapEx is estimated at INR350 crores, funded by a mix of internal accruals, debt, and equity. We have concluded about INR140 crores, including the Alu-Zinc technology upgrade, the second color coating line, and the solar power plant.

A residual portion of debt, roughly INR15 to INR20 crores, remains to be utilized. Q: What level of debt does the company plan to raise to fund the CapEx, and what is the expected peak leverage? A:

Our debt-to-equity ratio is slightly above one, indicating an unleveraged balance sheet. We estimate needing around INR100 crores in debt, but this is subject to change. We aim to keep our leverage below 1.25 times.

Q: Volume in Q1 FY27 was slightly lower than Q1 FY26. Is this due to the Alu-Zinc line ramp-up or softer demand? A:

The lower volume is due to the gradual ramp-up of the Alu-Zinc line. Demand is strong, and we have a robust order book. We expect visible growth in Alu-Zinc production quarter-on-quarter.

Q: With the shift from galvanized to Alu-Zinc, what is the sustainable EBITDA upside? Is this driven by pricing power or cost efficiency? A:

The incremental EBITDA from galvanized to Alu-Zinc could range from INR1,000 to INR3,000 per tonne, driven by both cost savings in production and the premium pricing of Alu-Zinc products. Q: Is the company facing any supply issues with LPG due to the Hormuz closure, and are there alternatives? A:

We faced a temporary supply disruption due to the Hormuz closure but maintained operations with buffer stock and diversified buying strategies. We plan to add a natural gas pipeline to further mitigate risks. Q: How fast can the second color coating line ramp up, and what will be the peak revenue and utilization?

A: The second color coating line will be commissioned in Q2 FY27, with faster ramp-up expected compared to the Alu-Zinc line. At peak utilization, revenues could reach INR1,600 to INR1,700 crores.

Q: Can you provide guidance on revenue growth for FY27 and FY28? A: For FY27, with increased capacities, we target around 150,000 tonnes, potentially generating INR1,300 to INR1,350 crores in revenue.

For FY28, we aim for 180,000 to 200,000 tonnes, with potential revenue of INR1,700 to INR1,750 crores. For the complete transcript of the earnings call, please refer to the full earnings call transcript.