Permanent Magnets LtdQ1 FY26Electrical Equipment

Permanent Magnets Ltd

Q1 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→Alloys division expected to scale up commercial production significantly in FY27, potentially 3 to 4 times FY26 volumes.
→Relays project commercial ramp-up delayed, now expected from second half (H2) of FY27 with estimated revenues of INR 25-50 crores at 100% utilization for initial 5 million capacity. Capacity to increase based on customer orders.
→Quantum Magnetics Phase 2 capex and commercial sales planned for Q3/Q4 FY27; long-term goal of 5,000-tonne capacity with potential revenues between INR 3,000-4,000 crores.
→Overall revenue growth guidance for FY27 expected in the range of 20% to 30%, driven by orders in Alloys and Relays segments.
→Outlook beyond FY27 to scale up depends on successful implementation of capacities, customer adoption, and government incentives (PLI scheme evaluation ongoing).
→Market expansion potential in smart meter components (addressable market ~INR 6,500-7,000 crores) and Quantum Magnetics.

Category 3

→FY27 growth expected between 20% to 30%, possibly higher based on order wins in Alloys and Relays businesses.
→EBITDA margins anticipated to stay stable at 15%-18% in FY27.
→Alloys division expected to ramp up 3-4 times FY26 revenue in FY27, driven mainly by oil & gas segment.
→Relays commercial ramp-up planned for H2 FY27 with projected revenues of INR 25-50 crores at 100% utilization.
→Quantum Magnetics to begin commercial sales from Q4 FY27, with long-term capacity planned at 5,000 tonnes targeting INR 3,000-4,000 crores revenue.
→Capex plans of INR 40-50 crores for PML standalone and similar for Quantum over 18 months, funded by a mix of internal accruals, debt, and equity.
→Growth dependent on customer adoption, market developments, and government incentives (under evaluation).
→Management targeting scaling up commercial operations across key growth pillars (Alloys, Relays, Quantum Magnetics) to drive profits in coming years.

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Yes

→The company plans capex of INR 40-50 crores for Permanent Magnets Limited (PML) and another INR 40-50 crores for Quantum Magnetics over the next ~18 months.
→Funding for these investments will be a combination of debt and equity, though the final mix is yet to be decided.
→The company has already taken an ECB (External Commercial Borrowing) of $5 million to fund capex in subsidiaries, contributing to increased consolidated debt.
→Management indicated that fundraising could involve both internal accruals and external financing but no specific imminent fundraising event was confirmed.
→No new debt or equity raise was explicitly announced during the call; the company is still finalizing the funding plan based on evolving business needs and capex schedules.

→The Relays plant is being set up phase-wise with an initial capacity of 5 million units, potentially increasing to 10 million based on orders received.
→Ramp-up of Relay production depends on successful pilot testing and customer approvals.
→Expected revenue from the Relays project is INR 25 crores to INR 50 crores at 100% utilization starting second half (H2) of FY27.
→Sales judgment for Relays after September is based on current customer indications but may change depending on customer adoption speed.
→For Quantum Magnetics, Phase 2 capex is expected by Q3/Q4 FY27, with production scaling planned in a phased manner.
→Alloy division is seeing ramp-up in commercial production with potential 3-4 times growth in FY27 over FY26.
→No specific consolidated order book value disclosed, but growth outlook is tied to commercialization progress and customer demand.

Yes

→Capex for FY27 includes INR 40-50 crores for Permanent Magnets Limited (PML) standalone business and another INR 40-50 crores planned for Quantum Magnetics subsidiary.
→Around $5 million (approx. INR 40 crores) is planned as Quantum Magnetics' contribution over 18 months.
→Capex funding will be a mix of debt and equity; internal accruals also expected to be used.
→New factory consolidation: INR 20 crores spent to combine 6 plants near Vasai on Ahmedabad highway; land already acquired.
→Relays plant phase-wise investment: initial setup with 5 million capacity (INR 25-50 crores revenue expected at 100% utilization in H2 FY27), expansion to 10 million capacity depending on orders.
→Quantum Magnetics Phase 2 capex (block cutting, machining, surface treatment) expected to be implemented by Q3-Q4 FY27, with future powder to block manufacturing investments under planning.
→Evaluation ongoing regarding participation in government PLI schemes for rare earth segment.

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