Everest Kanto Cylinder Limited — Q4 FY26

Everest Kanto Cylinder Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=TTtb0XjOyVI Published: 4 hours ago

0:00 Ladies and gentlemen, good day and welcome to the earnings conference call of Everest Canto Cylinder Limited. 0:07 7 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:17 17 seconds Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchtone phone. 0:24 24 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Mitesh Jen from 0:31 31 seconds CDR India. Thank you and over to you sir. 0:35 35 seconds Thank you Darwin. Good evening everyone and thank you for joining us on Everest Kento cylinders Q4 and FY26 earnings conference call. We have with us Mr. 0:45 45 seconds Punit Kurana managing director and Mr. 0:48 48 seconds Sanjie Kapoor oldtime director and chief financial officer of the company. We will be initiate the call with opening 0:56 56 seconds uh opening remarks from the management following which we will have the forum open for a question and answer session. 1:02 1 minute, 2 seconds Before we begin, I would like to state that some statements made in today's call may be forwardlooking in nature and a disclaimer to this effect has been 1:10 1 minute, 10 seconds included in the results presentation shared with you all earlier. I would now request Mr. Punit Kurana to make his opening remarks. Over to you sir. 1:19 1 minute, 19 seconds Thanks Mish. Uh good evening everyone. 1:22 1 minute, 22 seconds Thank you for joining us. Earnings call conference call. I will begin by sharing an overview of our performance for the quarter and the year. Following which we'll open up the floor for questions. 1:33 1 minute, 33 seconds We are pleased to report a healthy performance for Q F1 2026 marked by improved profitability and margin 1:41 1 minute, 41 seconds expansion and continued progress on strategic initiatives. 1:45 1 minute, 45 seconds For the full year, consolidated revenue stood at rupees 1470.6 crores. ITA increased by 15.7 crores yearon year to 1:54 1 minute, 54 seconds rupees 203 crores with margins improving by 210 basis points to 13.8%. 2:02 2 minutes, 2 seconds Profit before tax stood at 159.9 crores up 22.6% yearonear while profit after 2:10 2 minutes, 10 seconds tax came in at rupees 146.7 crores reflecting the growth of 50.1%. 2:18 2 minutes, 18 seconds This per performance was supported by favorable product mix improved realization and our continued focus on 2:25 2 minutes, 25 seconds operational efficiencies across businesses. 2:29 2 minutes, 29 seconds For the quarter, consolidated revenue stood at 358.2 crores. I beta was rupees 39.6 6 crores with a margin of to rupees 2:39 2 minutes, 39 seconds 11 uh margin at 11.1% compared to with 9% in Q4 FI25 2:47 2 minutes, 47 seconds PAT for the quarter stood at rupees 45.7 crores on standard basis revenue for FI 2026 2:56 2 minutes, 56 seconds stood at rupees 999 966.7 crores with IITA growing 53.4 4 crores to rupees 154.4 crores. 3:08 3 minutes, 8 seconds IA margin expanded to 16% from 10.6% last year while standard PAT came in at 3:16 3 minutes, 16 seconds rupees 81.2 crores up 52.3% yearonear. 3:23 3 minutes, 23 seconds From the balance sheet perspective, the company remains comfortable position during the year with continuous 3:30 3 minutes, 30 seconds continued investment in strategic capacity expansion while maintaining financial discipline giving us the flexibility to persuade growth 3:39 3 minutes, 39 seconds opportunities and calibrated market manner. The board has recommended a dividend of rupees 0.70 3:47 3 minutes, 47 seconds per share for FI 2026. Our Indian business continues to witness strong demand across both CNG and industrial 3:55 3 minutes, 55 seconds gas application with industrial application seeing a healthy increase during the year. We also saw encouraged 4:03 4 minutes, 3 seconds traction in higher value added segments such as semiconductor and defense with contributing positively to our product 4:11 4 minutes, 11 seconds mix and supported overall margin expansion. The US business maintained steady momentum during the year 4:18 4 minutes, 18 seconds supported by healthy order pipeline and growth opportunities in clean energy and specialized industrial applications. We 4:26 4 minutes, 26 seconds remain focused on strengthening our positions in these markets and addressing emerging opportunities across geographies. 4:36 4 minutes, 36 seconds During the year, we made meaningful progress on our expansion initiatives. 4:42 4 minutes, 42 seconds We successfully commenced operations in the green field Mundra facility withstanding our ability to cater the growth domestic demand. In addition, our 4:52 4 minutes, 52 seconds Egypt facility is progressing steadily in expected to commence operation shortly with f further enhanced our 4:59 4 minutes, 59 seconds global manufacturing footprint and improve our ability to serve regional markets more efficiently. 5:07 5 minutes, 7 seconds From an industry perspective, the broader demand environment remains encouraging for C EKC. Although 5:13 5 minutes, 13 seconds near-term fuel price volatility remains a factor to monitor, CNG continues to witness strong adaption in Indian mobility segment. 5:24 5 minutes, 24 seconds Supported by cost conscious consumer preference, wider availability, factory fitted CNG models and steady expansion in city gas distribution infrastructure. 5:36 5 minutes, 36 seconds As per industry reports, CNG accounts to nearly 22% of PA passenger vehicle sales in FI26, emerging as the second largest 5:43 5 minutes, 43 seconds fuel type in the segment from this second consecutive year and staying ahead of the diesel. staying ahead of 5:51 5 minutes, 51 seconds diesel over the medium long term. India is expected to remain a multiffuel economy with gas playing an important 5:59 5 minutes, 59 seconds role in mobility and broader energy transa transition beyond CNG led mobility opportunity across industrial 6:06 6 minutes, 6 seconds gas compressed biogas hydrogen semiconductor and defense are expanding with addressable markets for high pressure gas storage and transportation 6:15 6 minutes, 15 seconds solutions. With our diversified product portfolio, strong technical capabilities and expanding manufacturing footprint, we believe the company is well placed to participate in long-term opportunities. 6:26 6 minutes, 26 seconds With this, I conclude my opening remarks and request the moderator to open the floor for questions. Thank you. 6:33 6 minutes, 33 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:41 6 minutes, 41 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 6:50 6 minutes, 50 seconds requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question Q assembles. 7:17 7 minutes, 17 seconds Participants, you may press star and one to ask a question. 7:47 7 minutes, 47 seconds Our first question comes from the line of Amit Kumar with Determined Investments. 8:02 8 minutes, 2 seconds Please go ahead. Yes, this is give me one. Hello. 8:10 8 minutes, 10 seconds Hello. Can you hear me? 8:12 8 minutes, 12 seconds Uh, you are audible, sir. You may proceed. 8:14 8 minutes, 14 seconds Yeah. Thank you so much. Uh so I just wanted to uh you know check uh you know again you know the Dubai business uh 8:22 8 minutes, 22 seconds sort of uh you know continued to be you know under pressure in fourth quarter as well. Uh 8:30 8 minutes, 30 seconds you know in fact the whole of last year uh you know has been a a little bit of a difficult year uh you know for that 8:37 8 minutes, 37 seconds business. uh now you know should we sort of assume that you know even uh the coming years given the uh you know 8:44 8 minutes, 44 seconds geopolitical situation in the Middle East uh we sort of should we sort of expect any sort of improvement here or you know things will sort of continue to 8:53 8 minutes, 53 seconds remain difficult you know and definitely you know there will be improvement uh you know we already uh you know even in this 9:01 9 minutes, 1 second difficult situation we are working at you know around 50%. And uh you know the order book is uh you know improving the 9:09 9 minutes, 9 seconds order book is there only thing is that uh you know the middle situation on shipment and other things are difficult. 9:15 9 minutes, 15 seconds So hopefully that uh you know this year should be a a better year 9:25 9 minutes, 25 seconds and you know in terms of the India business the you know the uh significantly higher cost of uh you know LMG 9:34 9 minutes, 34 seconds you know we sort of uh you know heard Petronet you know that they still I think April May they were still operating at you know barely a 60% uh 9:42 9 minutes, 42 seconds you know utilization rate so you know supply is constrained pricing higher and now we have started to see uh you know 9:49 9 minutes, 49 seconds uh PNG uh PNG prices at the pump also uh you know sort of go up. Um in terms of 9:56 9 minutes, 56 seconds the India demand scenario uh you know would you have any thoughts going for you know uh I think the the CNG prices have increased but you know they are not 10:04 10 minutes, 4 seconds increased so much you know u so the the PV market you know mainly will depend on you know how the petrol prices move. So 10:12 10 minutes, 12 seconds if the patrol prices are moving in line with the CNG prices you know then if the petrol is going upward and CG is going slightly upward definitely the the trend 10:19 10 minutes, 19 seconds will continue because most of the customers that using CG vehicles are basically people who are moving away from petrol because now diesel vehicles 10:27 10 minutes, 27 seconds really nobody you know in passenger sector not many people are even opting for diesel vehicles you know they are more opting for a CNG or or a petrol 10:35 10 minutes, 35 seconds vehicle so you know customer I don't think will um uh you know will uh will will leave CG uh you know if if the if the prices are 10:44 10 minutes, 44 seconds still uh you know is does not moved up so much you know the the the increase is not so substantial so the things should 10:52 10 minutes, 52 seconds you know I think continue you know at least uh there should not be much impact u on the on the PV sales 11:01 11 minutes, 1 second so actually just to sort of clarify if I recall correctly your commercial business commercial vehicle business is bigger than your passenger vehicle 11:08 11 minutes, 8 seconds yeah yeah yeah you know on the commercial vehicle side I mean uh you know I mean obviously last year has been uh you know good. 11:17 11 minutes, 17 seconds Yeah. So you know even on the commercial segment you know commercial segment is also something logistics so from logistics industry perspective also I mean how are you 11:25 11 minutes, 25 seconds seeing I mean will I mean one question is that you know within uh within the I mean whether the CV demand itself 11:32 11 minutes, 32 seconds uh you know can you know you know grow at B78 on the on the you know on the CV demand 11:39 11 minutes, 39 seconds you know the CV de maybe it's got disconnect a little okay I'll answer the questions yeah Yeah. So, 11:48 11 minutes, 48 seconds uh continuing on uh the point of uh the CV sales, yes, we do not uh you know perceive that uh the demand may drop but 11:56 11 minutes, 56 seconds uh yes, we we are hopeful on that. All right. 12:11 12 minutes, 11 seconds Thank you. Participants who wish to ask questions may please press star and one. 12:20 12 minutes, 20 seconds Our next question comes from the line of Reed Jen from First Water. Please go ahead. 12:27 12 minutes, 27 seconds Yeah. Hi sir. Thank you for the opportunity. 12:30 12 minutes, 30 seconds I want to know the order book for the USA capital under executable time period. 12:38 12 minutes, 38 seconds Yeah. Yeah. So the order book in USA is around 75 million USD and it'll it will it's for the period between 18 months to 24 months. 12:48 12 minutes, 48 seconds Okay. To be executed. 12:51 12 minutes, 51 seconds Okay. Okay. And sir uh I read on your result that a new CEO has been proposed. 12:58 12 minutes, 58 seconds So can you give us the background of the CEO? Uh Mr. Gupta. 13:05 13 minutes, 5 seconds Yes. So uh right now you we waiting his joining. Once he joins in we'll be 13:12 13 minutes, 12 seconds sharing all the details. So you may wait a little more. Okay. 13:20 13 minutes, 20 seconds Got it. 13:22 13 minutes, 22 seconds And regarding Mundra and Egypt uh what what is your guidance regarding the ramp up of the capacity? 13:31 13 minutes, 31 seconds How soon will utilize? Yeah. on Mundra we have already started production so we are we are uh sort of the ramp up will 13:40 13 minutes, 40 seconds happen maybe 6 months down the line because everything needs to stabilize and move ahead 13:46 13 minutes, 46 seconds uh on Egypt we are we may be operational by the end of this month and ramp up will start happening again after 6 13:55 13 minutes, 55 seconds months when you ramp up uh what utilization 14:03 14 minutes, 3 seconds level which we are targeting in India we may achieve uh the targets pretty soon immediate uh we have to sort 14:13 14 minutes, 13 seconds of uh it'll be like uh im immediate targets would be around 40% of our uh 14:19 14 minutes, 19 seconds targets and maybe as we go ahead we may achieve around 80% of the targets 14:27 14 minutes, 27 seconds okay and accent it is to CR of CWIP in your 14:35 14 minutes, 35 seconds balance sheet. So what is disregarding? 14:40 14 minutes, 40 seconds This is the project which is not capitalized that is EF US and okay all those terms all those together. 14:49 14 minutes, 49 seconds Mhm. Got it. And any update on the GST case? 14:54 14 minutes, 54 seconds Yeah. So GST case we are like last time also in fact I had indicated that our cases you know we have reached out to 15:02 15 minutes, 2 seconds the government and we have ask them to give us a clarification 15:09 15 minutes, 9 seconds on the HSN which is normally used for our products. So we are very positive on that and we believe that once the GST 15:16 15 minutes, 16 seconds council meeting is held we may get the clarification and it probably resolve the case. 15:26 15 minutes, 26 seconds So and is it possible to share any timeline regarding the timeline can be between six to 6 months to a year. 15:36 15 minutes, 36 seconds Okay, got it. 15:40 15 minutes, 40 seconds Yeah, that's for my Thank you. Thank you. 15:46 15 minutes, 46 seconds Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one on your touchstone telephones. 16:13 16 minutes, 13 seconds To ask a question, ladies and gentlemen, you may press star and one. 16:28 16 minutes, 28 seconds We have no further questions at this time. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments. Over to you, sir. 16:37 16 minutes, 37 seconds Yeah. Uh, thank you once again for your interest and support. Should you feel any further clarifications or would you like to know more about the company, 16:45 16 minutes, 45 seconds please feel free to contact our investor relations team or CDR India. Thank you. 16:52 16 minutes, 52 seconds Thank you. On behalf of Everest Kanto Cylinder Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. 17:04 17 minutes, 4 seconds Thank you.