Manaksia Coated Metals & Industries Ltd Q2 FY26 Earnings Analysis

- Peak revenue expected to touch close to INR1,600 crores by FY27 with capacity expansions (Pre-painted steel and Alu-Zinc technology upgrade). - Revenue in FY26 expected to maintain momentum achieved in Q1 and further growth anticipated from Q4 onwards due to new projects coming online. - Sales volumes grew 18.69% YoY in Q1 FY26; utilization at 85% for galvanizing line, 100% for color coating line. - Export revenue hit a record 57% of total revenue in Q1 FY26 and expected to sustain above 50%. - Alu-Zinc line (180,000 tons capacity) anticipated to stabilize and contribute significantly to revenue by end Q3 or early Q4 FY26. - Second color coating line (total capacity 2,36,000 tons) to come online by end of Q4 FY26; full ramp-up expected in FY27. - The export market potential remains large and largely untapped, supporting future volume growth. - The company anticipates high margin, scalable revenue growth with expanded capacity and enhanced product mix.

- Q1 FY26 EBITDA margin stood at 11.27%, with a 94% YoY increase; EBITDA per ton around INR9,786. - Expansion projects (Alu-Zinc upgrade and second color coating line) expected to drive EBITDA margin to 12%-13% sustainable at good capacity utilization by FY27. - Revenue expected to peak around INR1,600 crores in FY27 with full capacity utilization of expanded facilities. - EPS showed strong growth, reaching INR1.42 per share in Q1 FY26, up 254% YoY. - FY26 EBITDA margin expected to maintain around 11% for first three quarters; margin expansion likely in Q4 FY26 and FY27 due to new capacities. - Phase 3 expansion (planned mid-FY27) estimated at INR220-250 crores capex, aiming for further growth; funding expected mostly via internal accruals, minimizing debt. - Export revenue, a high-margin contributor, poised to sustain above 50%, supporting profit growth.

- **Phase 1 & 2 Capex (FY26):** Total capex of ~INR150 crores covering Alu-Zinc technology upgrade, solar captive power plant, and second color coating line. Approximately INR50 crores already spent; remaining to be spent over next three quarters. - **Third Phase Capex (FY27):** Planned capex of INR220-250 crores for cold rolling backward integration and further capacity expansion. Funding strategy (debt vs equity) will be finalized later; focus on funding mostly through internal accruals and minimal debt. - **Capacity Expansion:** - Galvanized steel capacity upgrading to Alu-Zinc tech at 180,000 tons. - Pre-painted steel capacity increased to 236,000 tons with new line coming by end Q4 FY26. - **Funding:** Raised about INR175 crores equity via preferential warrants; approx. 70% of capex financing expected through debt, balancing equity.

- For the third phase of capex planned for FY27 (~INR220-250 crores), the funding strategy is yet to be finalized. - The company intends to fund as much of this capex as possible through internal accruals generated in FY26 and partially in FY27. - The goal is to minimize debt usage for the third phase, aiming for a low-debt funding approach. - For the current and previous capex phases, the company has raised approximately INR175 crores through equity via preferential warrants. - The existing capex funding mix has been roughly 70% debt and 30% equity. - Approximately INR13 crores is still pending from warrant conversions, expected to be received within three quarters. - Clear funding details for the third phase will be provided later in the year based on performance and project stabilization.

- The company has a strong and high-margin export order book that has been prioritized for execution over upgrade projects. - Export revenue surged by 182.28% year-on-year in Q1 FY26, contributing 57% to total revenue, indicating a robust order pipeline. - The growth in exports is supported by longstanding relationships with quality-conscious OEM customers in Europe and the Middle East developed over 5 to 7 years. - Ramp-up of new capacities (Alu-Zinc upgrade and second color coating line) will cater to increasing demand and contribute further to the order book from Q4 FY26 and FY27. - The company aims to maintain balanced domestic and export sales to mitigate market risks. - No specific numeric value of current pending or orderbook was disclosed, but demand visibility is described as strong with increasing double-digit growth potential due to infrastructure investments and export opportunities.