Future growth expectations in sales/revenue/volumes?

The Company targets a topline growth of 10% to 15% minimum in the current fiscal year driven by a strong export order book of over Rs. 320 crore. Volume growth is expected to be higher, with a 23.74% increase in volumes year-on-year in H1 FY25. With the commissioning of the Aluzinc project by Q1 FY26, production capacity will increase from 1,30,000 tons to 1,80,000 tons, targeting 80% to 85% capacity utilization. Sales volumes are expected to nearly double due to this capacity expansion, with significant revenue growth owing to higher-value Aluzinc products. Incremental turnover from a

Future growth expectations in earnings/operating earnings/profits/EPS?

The Company expects significant revenue growth driven by increased capacity and export orders, especially the Rs. 200 crore European contract effective from October 2024. EBITDA margins are anticipated to expand by 40-50% due to the introduction of higher-margin Aluzinc products and operational efficiencies. Net profit margins improved to 1.45% in H1 FY25, with a 150% YoY surge in net profit, expected to grow further with capacity utilization improvements. ROCE is projected to rise from current 15-16% to low 20% post Phase-I CAPEX (FY25-FY26) of Rs. 90 crores. After Phase-II (FY27-28), with co

Current/ Expected Orderbook/ Pending Orders?

Current export order book stands at approximately Rs. 320 to Rs. 325 crore. There are existing domestic orders worth around Rs. 200 crore. Orders are primarily from long-term, repetitive OEM customers with relationships spanning 6 to 12 years. Export customers include reputed European OEMs with strong credit ratings, supported by secured payment instruments such as letters of credit. Domestic customers include Indian OEMs and multinational companies with manufacturing in India. The Rs. 200 crore European order signed in late September 2024 kicks in from October 2024, with execution p

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Manaksia Coated Metals & Industries LtdQ3 FY24Industrial Products

Manaksia Coated Metals & Industries Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹108P/E: 28.4Market Cap: ₹1.2K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 3

→The Company targets a topline growth of 10% to 15% minimum in the current fiscal year driven by a strong export order book of over Rs. 320 crore.
→Volume growth is expected to be higher, with a 23.74% increase in volumes year-on-year in H1 FY25.
→With the commissioning of the Aluzinc project by Q1 FY26, production capacity will increase from 1,30,000 tons to 1,80,000 tons, targeting 80% to 85% capacity utilization.
→Sales volumes are expected to nearly double due to this capacity expansion, with significant revenue growth owing to higher-value Aluzinc products.
→Incremental turnover from a Rs. 90 crore CAPEX planned for FY25 and FY26 is projected between Rs. 500 to Rs. 700 crore.
→Longer term, the Company plans to grow capacity 3x to 3.5x over current levels by FY27-28, with further CAPEX planned beyond FY26.
→Export growth will remain a key focus, supported by strong OEM relationships and the large European order signed in September 2024.

Margin guidance

Category 1

→The Company expects significant revenue growth driven by increased capacity and export orders, especially the Rs. 200 crore European contract effective from October 2024.
→EBITDA margins are anticipated to expand by 40-50% due to the introduction of higher-margin Aluzinc products and operational efficiencies.
→Net profit margins improved to 1.45% in H1 FY25, with a 150% YoY surge in net profit, expected to grow further with capacity utilization improvements.
→ROCE is projected to rise from current 15-16% to low 20% post Phase-I CAPEX (FY25-FY26) of Rs. 90 crores.
→After Phase-II (FY27-28), with cold-rolling complex and inventory reduction, ROCE could potentially exceed 30%.
→EPS has already increased by 118% to Rs. 0.72 per share in H1 FY25 and is expected to grow substantially alongside profitability.
→The Company plans to use equity to fund CAPEX, aiming to strengthen the balance sheet and reduce leverage, supporting sustainable profit growth.

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Fundraise plans

Yes

- The company is currently looking to raise equity for CAPEX needs. - The expected equity dilution post-money is around 14% to 15%. - Long-term CAPEX investments will be primarily funded through equity, not debt. - For working capital, the company will utilize existing banking facilities with minimal additional debt. - The company does not intend to increase long-term debt and aims to improve its debt-to-equity ratio with the equity raise. - The total CAPEX planned for FY25 and FY26 is about Rs. 90 crore, with further CAPEX planned for FY27-28 for backward and horizontal integration. - The company aims to keep leverage under control and prefers equity financing for growth. This strategy indicates a preference for equity fundraising rather than increasing debt to fuel expansion.

Order book

Yes

→Current export order book stands at approximately Rs. 320 to Rs. 325 crore.
→There are existing domestic orders worth around Rs. 200 crore.
→Orders are primarily from long-term, repetitive OEM customers with relationships spanning 6 to 12 years.
→Export customers include reputed European OEMs with strong credit ratings, supported by secured payment instruments such as letters of credit.
→Domestic customers include Indian OEMs and multinational companies with manufacturing in India.
→The Rs. 200 crore European order signed in late September 2024 kicks in from October 2024, with execution planned over 9 to 12 months.
→This order contributes significantly to export sales growth in Q3 and Q4 of FY25.

Capex plans

Yes

- Current FY25-FY26 CAPEX: Rs. 90 crore split approximately 50-50 between these two fiscal years. - Breakdown: Rs. 40 crore for Aluzinc project (capacity enhancement and upgrade from galvanized steel to Aluzinc) and Rs. 50 crore for second pre-painted steel line. - Aluzinc commissioning expected by February 2025 with full capacity utilization targeted from FY26. - Future CAPEX planned beyond FY26 for growth to 3 lakh tons capacity from current 1.32 lakh tons, including backward and horizontal integration, expected in FY27-28. - Additional CAPEX after FY26 includes cold-rolling complex for raw material optimization, Inventory reduction, and potential further capacity expansions. - CAPEX to be primarily equity funded to avoid long-term debt increase. - Rs. 8-9 MW solar power plant planned for sustainable energy use, reducing power cost by up to 70%. Overall, phased and strategic investments aim at 3x production growth, improved ROCE, and margin expansion.

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