KARBONSTEELENGINEERING Q4 FY26 earnings call.
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Revenue
₹300 Cr
verification pending
Revenue YoY
9.9%
reported change
EBITDA
Pending
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Karbonsteelengineering delivered 300 crore revenue in FY26, crossing the 300-crore milestone for the first time versus 273 crore in FY25, though this was below the ~340 crore potential due to one-time disruptions. The company reported 10.86% EBITDA margin and 10.51 crore PAT, but normalized PAT at 16.56 crore after accounting for 1.65 crore NCL bad debt write-off, 2.4 crore rental costs for the delayed Umbergaon expansion, and plant shifting charges. LPG supply crisis starting March and labor migration impacted Q4 execution, while steel price inflation (~25% YoY) was largely passed through via PV clauses but compressed margins on fixed conversion costs. The order book stands at 350 crore (as of May), providing strong visibility. Capacity expansion to 54,000 tons from 30,000 tons is 60% complete, targeted for October completion. The company guides FY27 revenue of ~400 crore (40,000 tons at 100 rupees/kg), normalized EBITDA margin of 12-13%, and PAT margins of 4-5% expanding to 7-8% by FY28-FY29 as automation delivers 15-20% efficiency gains. Key risks include labor dependency, incomplete capacity ramp, and working capital intensity (130 inventory days).
Colored figures show movement against the previous available record.
Guidance to track
- Management targets 40,000 tons production in FY27 at ~100 rupees/kg realization. Capacity expansion to 54,000 tons by October provides six months of incremental capacity.
- Excluding one-time items (6.56 crore total in FY26), management expects normalized EBITDA margin of 12-13% in FY27 as expansion costs normalize.
- FY27 PAT margin expected at 4-5% as capacity comes online, expanding to 5-6% in FY28 with full automation benefits and 7-8% longer-term.
- FY27 capex of 10-15 crore targeted for automation (laser cutting, automatic beam welding, fitup center, blasting machine). Solar plant of 1 MW (~3-3.5 crore) also planned.
Risks flagged
- Labor migration from March onwards due to LPG crisis and external events caused Q1 FY27 utilization at 80%. Management expects normalization by end of June, but this remains a recurring risk given reliance on migrant labor from MP, Bihar, Odisha, and West Bengal.
- Analyst (Mr. Gunjit Singh) questioned why H2 margins were ~10% versus ~13% normalized despite PV clause pass-throughs. Steel inflation (~25%) was largely passed on, but fixed conversion costs (gas, transport, consumables, paint) created 200-300bps gap. Management attributed this to March disruptions affecting full-quarter realization.
- Inventory days at 130 despite improvement from 150 days. Working capital turnover at 2.2x annually. Analyst raised concern about high finance costs (~15 crore on ~70 crore borrowings, effective ~19% rate) constraining ROE improvement despite asset turnover of ~8x on 38 crore fixed asset base.
- Force majeure from sole LPG supplier starting March disrupted cutting and welding operations, contributing to unfinished projects in March. Management has since engaged multiple sources but acknowledged vulnerability to supply concentration.
Key quotes
- We have still worked at 90% of production capability and also in terms of order book we have built from close to 200 crores to today in May we are sitting at about 350 crore order book. So in terms of work visibility we are feeling very very comfortable.
- Our idea is to go in upwards of 800 to 1,000 crores and produce about 7,000-8,000 tons a month we will need to do some more expansion post FY28. It will be internal accruals as well as equity.
- When we are doing this complex fabrication at 3,500-4,000 tons, it is not something that everybody's able to deliver. The automation that we are planning is going to help us bring that 15-20% efficiency within the same capacity that we have deployed.
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