Man Industries (India) Limited (MANINDS.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Man Industries Limited Q2 FY '26 Earnings Conference Call, hosted by Arihant Capital Markets Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Utsav Benara from Arihant Capital Markets Limited. Thank you, and over to you, Mr. Utsav.

Good evening, and welcome, everyone. On behalf of Arihant Capital, we invite you to Man Industries India Limited Q2 and H1 FY '26 Earnings Conference Call. From the management side, we have Dr. Ramesh Chandra Mansukhani, Chairman; Mr. Sandeep Kumar, CFO; Mr. Rahul Rawat, Company Secretary; Mr. Gyanchandani, VP and Investor Relations; [ Mr. Sunil Wadekar ], VP Accounts. So without any further delay, I'll hand over the call to the management for their opening remarks. Over to you, sir.

Yes. Good evening, everyone. I extend a warm welcome to all our shareholders, analysts and participants joining us for the Q2 and H1 FY '26 earnings conference call business highlights and financial outlook. Q2 FY '26 has been an important quarter for the company, both in terms of financial performance and strategic progress. We are pleased to report the highest ever quarterly EBITDA margin in our history, reflecting our continued focus on execution excellence, product mix optimization, operational discipline and cost management. During the quarter, we witnessed the strong traction across our international market, particularly in the GCC region and Southeast Asia. As of 30th September 2025, our executable order book stands around INR 4,750 crores. This is as on, not in 30th September, sorry. The current order is INR 4,750 crores with execution visibility spread over the next 6 to 9 months. In addition, we have a robust bid pipeline exceeding INR 15,000 crores covering opportunities in oil and gas, water transmission and specialized coated pipe segment across global markets. With the strong momentum in execution, we expect H2 FY '26 to be strongest half year in the company's history with revenue of around INR 2,200 crores, enabling us to comfortably deliver our 20% revenue growth guidance for 2026. Export continue to be an important growth engine for us, constituting about 80% to 90% of the order book. This reflects the growing global trust in our technical capabilities, execution track record and ability to deliver complex large-dia pipe solution. Our expansion -- strategic expansion. Our expansion initiatives in Saudi Arabia and Jammu are progressing very well with a full-fledged -- with full swing. The Saudi Arabia facility is a strategically important project, giving us manufacturing base closer to our oil and gas hub and civil activity is in progress, and we expect operation to commence by quarter 4, 2026, followed by commercial ramp-up by -- Jammu plant also progress -- and the progress is planned and expected to be commissioned in April. We are planning to start the production from 1st April 2026. That is our target date. Both projects will significantly strengthen our geographical reach, capacity and ability to participate in high-value contracts, ensuring diversified growth in the coming years. Looking outlook. Looking ahead, the outlook for H2 '26 remains strong, supported by steady order execution and healthy order inflow. We reiterate our full year guidance of proposing 20% revenue growth in FY '26, driven by timely project execution, capacity expansion and capacity -- some diversification and sustainable demand from global energy and water infrastructure sector. We expect to maintain double-digit EBITDA margin above 11%. Between 11% to 12%, we are estimating, supported by favorable product mix, cost discipline and operational excellence, enhancing the share of the value-added and export orders, maintaining financial prudence, scaling up the capacity through our ongoing Saudi Arabia and Jammu expansion. Jammu expansion is a synergic stainless steel seamless pipe manufacturing. With that, I now hand over to our CFO, Mr. Sandeep Kumar Garg, to review the financials. Over to you, Sandeep.

Thank you, Mr. Chairman. Good evening, everyone. Thanks for joining us for discussion on our Q2 and HY '26 financial performance. I will take you through the key financial highlights, margin drivers, balance sheet position and outlook for our coming quarters. Let's begin with the consolidated results. Revenue from operations for Q2 FY '26 stood at INR 834 crores, a growth of 3.5% year-on-year and 12.4% Q-o-Q. EBITDA for the quarter grew by 37% Y-o-Y to INR 102 crores with margin expanding by 340 basis points to 12.5%, the highest ever in our history. PBT increased by 15.5% Y-o-Y to INR 49 crores and PAT grew by 16% Y-o-Y and 34% Q-o-Q to INR 37 crores. These results reflect our ability to maintain profitability despite a relatively stable revenue base, driven by product mix improvement, cost control and higher efficiency across our facilities. Now we come to the half yearly performance. The revenue for the half year H1 FY '26 stood at INR 1,576 crores, up by 1.4% Y-o-Y. EBITDA grew by 38% Y-o-Y to INR 182 crores, reflecting sustained margin expansion across product lines. PAT stood at INR 65 crores, growing 27% Y-o-Y with cash profit increasing by 34% to Y-o-Y around INR 100 crores. Our H1 performance demonstrates our ability to deliver profitability growth even in a flattish revenue environment, driven by mix improvement and operational excellence. Regarding balance sheet, as on 30th September '25, we have a net cash position of INR 14 crores, considering all the debt. Net position is positive INR 14 crores cash. Now I will update the investors about the demand environment and industry tailwind. The global investment in energy transition, upstream oil and gas, hydrogen transportation and water infrastructure continue to accelerate. The GCC region, in particular, is undergoing one of the largest pipeline investment cycles in recent years, driven by large-scale gas pipeline corridors, expansion of hydrogen-ready infrastructure, desalination and water distribution products and mega EPC development under National Vision program. We believe this industry tailwind will sustain multiyear demand visibility for high-quality line pipes and Man Industries is strategically positioned for demand visibility for high-quality [Technical Difficulty]

Sorry, to interrupt, sir. But can you repeat again? You were on mute.

We believe this industry tailwind will sustain multiyear demand visibility for high-quality line pipes and Man Industries is strategically positioned to capture a meaningful share of this opportunity. On the domestic front, we are closely tracking tender announced by various state governments like Gujarat, Andhra and Orissa in the Water Infrastructure segment. The pipeline of domestic water projects is healthy, and we expect improved traction over the next 2 to 3 quarters. With this, we would like -- we would now open the floor for the question-and-answer session. Thank you.

[Operator Instructions] The first question comes from the line of Darshil Jhaveri from Crown Capital.

A great set of results. Really happy with the company's performance. So just wanted to know that this year, we have given a very good guidance. Now for next year, when we have major plants operational, how do we see FY '27, like the ramp-up of the facilities, how would they be, sir?

'27, our existing facility plus Saudi and Jammu, both will be operational. So roughly, we'll be touching around INR 7,000 crores revenue by FY '27, which will have a contribution from Saudi operations, Jammu and our current operations.

So INR 7,000 crores is a really great target to have, sir. So we have like enough order book for that because from the order book perspective, I think we have around INR 4,500 crores, right, sir?

That is correct. This order book is currently for India operation. When we start the Saudi operation, that order book will further add to our order book position. So currently, Saudi and Jammu plants are not operational. So we are not declaring any order for those plants, but we are in discussions with different potential clients and almost negotiations are at final numbers. Once we give them the production start, we will have a confirmation order from them. So we are hopeful of getting this guidance, which we are declaring now.

Okay. Okay. Fair enough, sir. So if possible, could we know how much will come from Jammu plant? I'm asking because that's the stainless steel and has like a very high margin. So in the INR 7,000 crores, will we have any blended EBITDA margin target because both Saudi and Jammu and Kashmir are margin accretive to us, right?

Yes, yes. You are right. And the Saudi will be the SAW pipes and Jammu will be especially steel, SS tubes, seamless tubes business. Both will be higher. You can say, Jammu will be around 18% to 22% Jammu and Saudi will be between 12% to 15%?

14%, 15%.

14%, 15%.

Yes. So on a blended basis on INR 7,000 crores, how much can we do, sir?

INR 7,000 crores, we should reach around -- we should reach INR 800 crores.

INR 800 crores plus. This is on the conservative side. Saudi, our EBITDA will be better also because their margins will be better.

Okay. That's really great to know, sir. And just because of this when the plant starts operationalizing, I see both plants combined, we spent around INR 400 crores. So the depreciation and interest will hit in FY '27, right, sir? So what -- how will our debt position be like once -- what will be the interest cost, if we have any estimation regarding that, sir?

Yes. Our peak borrowing will be around INR 1,150 crores to INR 1,200 crores. This will be implemented.

And what is the cost of debt to us then, sir?

Let me conclude. This is I'm talking about the borrowing gross. Just like we have declared INR 14 crores net cash position, so this is the gross borrowing level, INR 1,150 crores to INR 1,200 crores. So roughly, our cost -- interest cost will be around same, INR 120 crores to INR 125 crores in 1 year, all 3 plants.

Mix of the dollar and rupee, that's why. Dollar would be around 6%, rupee will be around 8% to 9%. So we are estimating the...

Interest cost will be around INR 120.

Okay. Okay. That's a really great figure because I thought with the new, we'll have some working capital requirements also, right? Because right now, only we are at INR 30 crores, I think the run rate of interest. So while we go for INR 7,000 crores, will we need some working capital, which will increase our interest, sir?

Not interest actually the nonfund-based limits you use more because the performance bond and ABG, PBG, retention bank guarantee, et cetera, we have to give more in future. But since the operation level also increasing, then it is going to face accordingly.

[Operator Instructions] The next question comes from the line of Satyan Wadhwa from Profusion Investment Advisors.

I have 2 questions. One, can you let us know what the volumes were for the first quarter and the second quarter? And what volume are you estimating from the Saudi plant and the Jammu plant in FY '27? And what are the current average selling price per tonne for both of these plants, average in terms of the mix of products that you're expecting to do from these 2 plants?

Your question is not very clear. The reason the -- you want to know the per...

I can ask again. Is this clear now? Am I audible now?

Yes, yes, please.

Yes. So my question was what was the volume that we did in first quarter and in the second quarter, which is the September quarter? And secondly, what is the volume you are forecasting from the Saudi plant for FY '27? And what is the average selling price of the products that you intend to make there? And secondly, what is the volume you are forecasting from the Jammu plant for FY '27? And what is the current ASP based on the product mix you are envisaging for Jammu?

Yes, Satyan, well noted. Our Indian operation in the first 6 months is around 40% of our estimation. Now there will be around 60% for next H2. As regard to Jammu, there will be projections we are doing first year around INR 500 crores because the new unit, it will slowly, slowly will pick up -- ramp up. And Saudi, we are estimating because of some dialog is going on, et cetera, et cetera. So we are estimating around INR 1,500 crores -- around INR 2,000 crores. So that's why the company is expecting to reach INR 7,000 crores '26, '27 closing.

Right. So basically, the new plants will contribute around INR 2,000 crores to INR 2,500 crores out of that INR 7,000 crores, right?

That's correct.

You are right. You are right, sir.

Okay. Great. So -- and in terms of the Jammu plant, this INR 500 crores would be what sort of volume? Getting to INR 500 crores, capacity is 22,000 tonnes, right?

Capacity, 22,000, yes.

You can say, 1/3, around 40% in the year 1. Then year 2 will be around 70% -- 60%, 70%. Yes.

Okay. That's great. And for Saudi, from that 3 lakh tonnes, what do you expect the first year volume to be?

First year volume, as we estimated around INR 2,000 crores first year, then...

No, no, in terms of tonnage.

Tonnage is very difficult.

For utilization.

I'm talking about...

Basically I'm just trying to get a sense of utilization, right, what sort of -- like you said 40% utilization in Jammu, then 70%, then maybe 80% or 90%. What would be in Saudi in the first year, the utilization?

Saudi, you can consider around -- will be in the first year around 50% and it will ramp up slowly, slowly for the next year because a lot of equipment, et cetera, will be added in the first year and then you get the good result after first year. Second year, it will go up.

And orders are not a problem in Saudi given that your plant is there, you're probably already sending pipes from India. So I think you should be accredited, right?

No, this is not a problem because we are a very qualified company, and we are experienced on other markets for the export. So I don't think so any problem is there.

So when will you start booking orders from the 2 plants, Saudi and Jammu? In the next quarter? Or will that start only in first quarter next year fiscal?

Discussion is going on. Very soon, maybe first quarter, we will book some orders, and then we will see how it is going.

First quarter means quarter 4 of this year.

First quarter means...

Jan to March quarter, right, you will start booking orders?

Yes.

And plant production will start next quarter as in the Jan-March quarter?

We are trying to -- in the first quarter means, your quarter 4, we are going to start some production.

In Saudi.

In Saudi.

Jammu, we'll be...

Equipment is all in place in both the plants or you're still waiting for some equipment to come?

Most of the equipment in Jammu already arrived from Europe and Japan. And Saudi is already there with the equipment there. Some are coming. Mostly coming. Mostly already there.

Okay. So I'm just trying to get a sense of readiness of the plants for trials will begin in the next maybe 8, 10 weeks, right?

Yes, roughly, as we told January, we are estimating 8 to 10 weeks saying the same. But all are this is the expectation, which as per our calculation should go through it.

[Operator Instructions] The next question comes from the line of Divyansh Thakur from Finterest Capital.

Sorry, sir, if I'm repeating the question, actually, I joined late. So as you reported the EBITDA margin of 11.5%, do we see this continue going forward with the new capacity, as you mentioned, coming live on April 1, 2026?

Yes, the EBITDA margin guidance we have given, we will be 11% plus. So we are going to maintain EBITDA between 11% to 12%. We are going to maintain same EBITDA in this year.

Okay. That's great. Sir, also wanted to know the update on the order issued, if you can give us some details like how that is going?

As of now, we have order book of INR 4,750 crores, 90% of those are exports. 10% are...

No, no -- sorry to interrupt you, sir. No, I wanted to ask about the SEBI order.

SEBI order?

Yes, yes, yes.

SEBI order, we got the stay order immediate after the order in a few days. And now the matter is sub judice.

[Operator Instructions] The next question comes from the line of Helly Shah, who is an individual investor.

I wanted to ask that Q2 revenue was slightly lower Y-o-Y despite a strong order book. What would be the reason for this revenue, which was lower than expected?

Madam, our business is like nature, the lead time. Every order having the different kind of the raw material. So once we get the order, although the order book is very good order book position over there, once we receive the order, some raw material a few weeks, some raw material a few months. So that's why we have to see the priority. Now all the orders are under execution, and you will see a great growth in coming quarters.

Okay, sir. The next question is, sir, the Saudi project is expected to commercialize in Q4 FY '26. So what proportion of the cost you have spent so far? And are we on track for commissioning this project?

No, your question is not clear. The order as I already indicated, discussion is going on with the clients and the facility is under progress. And we can give not month-wise, quarter-wise projections for the new company. The overall, as I already indicated, INR 2,000 crores, we are expecting the revenue from Saudi in year 1 and INR 500 crores in Jammu in year 1.

The next question comes from the line of [ Nisha ] from Sapphire Capital.

So I just wanted to understand from the INR 7,000 crores guidance that you've given, what will be the contribution from the Jammu plant, from the Saudi plant and from the current plant?

Yes. This is -- we already indicated. Once again, we will repeat it. Operation would be around INR 4,500 crores. Saudi will be INR 2,000 crores and Jammu will be around INR 500 crores. This is our wish and plan to achieve next year, INR 7,000 crores.

Okay. Understood. And you mentioned that from Saudi we will have better margins. Can you give a number how much better are the margins in Saudi from the current plant?

Madam, Saudi, EBITDA, we can give the guidance of EBITDA will be between 12% to 15% on product mix, client grade, lot of question is there. At the moment, we can give this idea. In the Jammu, as we already informed between 18% to 20%, 21% EBITDA as per the product mix and the clients, there are a lot of calculation. But the overall INR 7,000 crores, the EBITDA would be more than...

Around INR 800 crores.

More than INR 800 crores.

The next question comes from the line of Viraj Mahadevia from MoneyGrow.

I had a quick question. Congratulations on the traction in the business. Regarding your expansion, it's an INR 1,200 crore expansion overall. However, the CapEx this year showing is only INR 57 crores. So can you explain how INR 1,100 crores will be deployed for the plant to be ready in 4, 5 months?

No, no. Sir, our equity portion is already gone in Jammu.

Okay. Understood, sir. How much is that?

Maybe INR 210 crores.

For Jammu, almost INR 200 crores we have invested and some of them were invested last year also, so this was the effect for...