Permanent Magnets Ltd

- For the Quantum Magnetics subsidiary, Permanent Magnets Limited is planning a phased capital expenditure for expanding production capacity up to 5,000 tons by FY 2030, requiring an investment of INR 550 to INR 750 crores. - Regarding funding this expansion, the company is still discussing options between debt, equity, or a combination to finance the capex. - In earlier phases, such as the pilot plant setup (500 tons capacity), the capex is estimated between INR 50 crores to INR 100 crores. - No specific current fundraising announcements were made, but future equity infusion in joint ventures will be split 50-50 between the company and the partner. - The company intends to proceed in an aggressive but cautious manner, balancing debt and equity based on evolving needs and execution phases.

- Quantum Magnetics Phase-wise Capex Plan: - Total planned revenue by FY 2030: INR 3,700 crores. - Total investment required: INR 550 crores to INR 750 crores for 5,000 tons production. - Phase 1 (Pilot plant of 500 tons) capex: INR 50 crores to INR 100 crores. - Phase 2: Block cutting facility expected by March (year not specified, likely 2026). - Phase 3: Full-scale manufacturing of blocks in India targeted around 2027. - Funding Strategy: - Plans to fund through a mix of debt and equity in the subsidiary. - Additional Investment: - Setting up new furnace for alloy production in January-February-March (next fiscal year). - Government Incentives: - Anticipating participation in INR 7,300 crore government scheme expected by December/January. - Joint Venture: - 50-50 investment split between partner and PML; equity infusion to be shared equally.

- FY 2025-26 expected growth: ~10-15% revenue growth. - FY 2026-27 outlook: 20-30% growth expected, mostly from alloy business expansion and some EV orders. - Quantum Magnetics target: INR 3,700 crores revenue by FY 2030 (5,000 tons production capacity). - Pilot plant (500 tons) expected revenue: INR 300-350 crores. - Alloy business FY 27 revenue potential: INR 40-70 crores, with capacity fully booked or partially booked. - Relay business: Commercial larger volume sales anticipated from mid-FY 27; currently in testing phase. - EV-related products: Stable demand; some growth expected if pilot projects succeed; standard modules launched with early sales. - Overall EBITDA margins expected at 16-18%, reflecting growth and product mix changes.

- **Revenue Growth:** - Expecting 10% to 15% growth for the current fiscal year (FY26). - Anticipating 20% to 30% growth in FY27, driven mainly by alloy and EV-related orders. - **EBITDA Margins:** - Current margins at around 12%-13%. - Expectation to improve to 15%-18% EBITDA margin overall next year (FY27) depending on product mix. - EV and alloy businesses expected to contribute higher margins (15%-40% for EV-related products). - **Profitability:** - Margins likely to remain stable around 16%-18% EBITDA with growth in alloy and relay segments. - EBITDA of around INR550 crores targeted by FY30 with a revenue target of INR3,700 crores for the Quantum Magnetics segment. - **EPS:** - No specific EPS forecast given, but growth in revenues and margin expansion implies positive EPS trajectory aligned with operational improvements.

- Alloy Business: Partially booked for new 750-ton capacity; visibility from customers with orders generally given 1-2 months in advance. Current demand strong; running at full capacity already. Expected revenue in FY '27: INR40-70 crores, can increase with more customers. - Relay Business: Samples submitted to 3-4 companies; in testing and certification phase. Customers doing field tests; commercial volumes expected from mid FY '27 onwards. - Quantum Magnetics (Subsidiary): Orders in hand for Phase 1 expansion but unable to supply due to import restrictions (now relaxed). Expected production start around March 2026. - Current sensor products: One customer already started using; pilot lots given to others; expected FY '27 sales INR2-5 crores. Engaged with 4-5 customers for alloys including aerospace and defense segments. - Overall growth optimistic for FY '27, heavily dependent on alloy order bookings and scaling of relay business.