MANAKCOAT Q1 FY27 earnings call.
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Revenue
₹263 Cr
verified against source
Revenue YoY
3.6%
reported change
EBITDA
₹29.08 Cr
latest reported figure
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Where this quarter sits.
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What the record says.
Manaksia Coated Metals delivered a strong Q1 FY27 with ₹263 crore revenue (+3.6% YoY, +15% QoQ) and ₹29.08 crore EBITDA (+86% QoQ), as the Aluzinc line ramp-up and favorable pricing finally translated into the highest-ever EBITDA per ton of ₹10,400. EBITDA margin recovered 422bps to 11.06%, driven by 12% improvement in price realization per ton and successful cost pass-through on new orders post Q4 fuel shock. Operations ran without disruption with prepainted utilization at 95.4% and exports contributing 55% of volumes. Management targets ₹1,350 crore revenue in FY27 (1.5 lakh tons) and ₹1,750 crore in FY28 (2 lakh tons) as the second color coding line and solar plant commission in Q2 FY27. Key risks include execution risk on new capacity ramp-up, geopolitical fuel price volatility despite normalization, and the company's heavy export concentration (55%) amid currency and trade policy uncertainty.
Colored figures show movement against the previous available record.
Guidance to track
- With second color coding line and solar plant commissioning in Q2 FY27, management targets 1.5 lakh tons sales volume generating ₹1,300-1,350 crore revenue for the fiscal year.
- Full-year contribution from new color coding line and higher Aluzinc utilization should drive volumes to 1.8-2 lakh tons and revenues of ₹1,700-1,750 crore in FY28.
- The new Aluzinc line at 62% utilization is expected to reach 75-80% healthy capacity utilization within the next 3 months as initial teething troubles are resolved.
- Management indicated potential for further EBITDA margin improvement of 1-2% from current 11.06% levels driven by capacity additions, solar power cost savings, and higher prepainted mix.
Risks flagged
- While management attributes lower YoY volumes to Aluzinc ramp-up rather than demand weakness, the execution timeline for reaching 75-80% utilization remains subject to resolving ongoing commissioning issues.
- Analyst specifically questioned fuel cost exposure after Q4 disruption when LPG spiked from ₹60 to ₹200/kg; management claims normalization to ₹80/kg but acknowledges geopolitical risk remains.
- With 55% of volumes exported and 80% of order book reportedly from exports, currency fluctuations, trade policy changes, or deterioration in key export market relationships could significantly impact revenues.
- Management provided vague guidance on ₹250 crore Phase 2 capex (cold rolling + second Aluzinc line), stating sources 'yet to be completely frozen' and dependent on earnings, creating uncertainty on leverage and dilution.
Key quotes
- What's equally important, and we'll come back to this, is that all the new orders in Q1 were priced to fully cover the current cost environment with the margin buffer on top. That shift in pricing has made a significant difference to our unit economics.
- The EBITDA per ton where at ₹10,400 per ton is the highest we've ever recorded. It tells us that when business is running normally and pricing is right, the unit economics are very healthy.
- The prices for LPG shot up from 60 rupees a kilo up to 200 rupees a kilo and this is the kind of spike that had an impact on margins during Q4. But today's situation is that the prices have cooled down drastically to 80 rupees more or less.
- After the implementation of a cold rolling unit, it will give us the required flexibility to reduce the inventory drastically... compressing the working capital cycle to probably in single-digit numbers. It would be a very drastic reduction in working capital.
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