BEHARI LAL ENGINEERING LTD – Q1 FY27 CONCALL HIGHLIGHTS
#Q1FY27
Q1FY27 Performance
- Revenue from operations stood at ₹151.7 Cr, up 18% YoY; volume increased 13.4% YoY to 22,095 tonnes.
- EBITDA rose 23% YoY to ₹29.7 Cr, with margin at 19.6%; operating EBITDA margin was 18.2%.
- PAT increased 24.5% YoY to ₹19.2 Cr, with PAT margin at 12.7%.
- EBITDA/tonne increased to ~₹13,500 vs ~₹12,400 YoY.
High-Value Product Strategy
- High-value products contributed 60.4% of revenue, up from 55.7% YoY and 57.8% in FY26.
- FY26 high-value mix had already increased from 45% in FY25 to 58%.
- Management is targeting ~70% high-value product mix in the near future.
- Alloy steel contributed 47.7%, metal rolls 25.8%, engineering castings 19.8% and forging ingots 1.9% of Q1 revenue.
- Growth strategy is focused on mix improvement and realization, rather than chasing commodity volumes.
Capacity & Utilization
- Overall capacity utilization reached 90.5% in Q1; melt shop at 94% and rolling mills at 87.5%.
- The same melt shop can manufacture rolls, specialty bars and castings, allowing production to shift toward stronger/high-value demand.
- Current year growth will primarily come from product-mix optimization; additional melting capacity is expected from the next financial year.
- Unit 3 is under construction and expected to commence operations in Q1 FY28.
Unit 3 & New Products
- Unit 3 will focus on centrifugal casting, metal rolls, ICTP/ICDP rolls, HSS rolls, engineering castings and other foundry products.
- ICTP/ICDP and HSS rolls are largely imported currently, creating a significant import-substitution opportunity.
- Two centrifugal casting technologies—**vertical and horizontal**—are planned, with machinery orders already placed.
- Company expects to start production next year and sees potential for significant market share.
- Forging capabilities will support higher-margin valve steel, die steel and tool steel grades.
Order Book
- Order book stood at ₹162 Cr / 13,138 tonnes as of June 30.
- Order-book realization is around ₹1.2 lakh/tonne versus Q1 revenue realization of ~₹93,000/tonne, indicating a richer mix.
- Management highlighted that the order book is skewed toward high-value products, providing visibility for the next 2 quarters.
Defense & Aerospace
- Company has started receiving orders from government PSUs including Bharat Dynamics and Nuclear Power Corporation of India, along with private-sector defense customers.
- Products are being developed for import substitution and Make in India requirements.
- Defense customer approvals involve a long prototype and qualification cycle.
- Initial prototyping revenue has started; meaningful defense revenue is targeted from FY28.
- Management sees strong long-term opportunity in specialized grades currently not manufactured domestically.
Foundry & Power Opportunity
- Strong demand is emerging from the power sector, with customers providing order visibility extending to 2035.
- Company recently produced a 22–23 tonne single-piece casting for a major power-sector customer.
- Investments in CNC machining, testing, NDT, shot blasting, painting and finishing will provide one-stop foundry solutions.
- Forward integration should improve customer stickiness and support higher-value castings.
Financial Strength & IPO
- June-end net worth stood at ₹325 Cr, gross borrowing at only ₹11 Cr, cash at ₹52 Cr and debt/equity at 0.03x.
- ROE was 23.6% and ROCE 27%.
- IPO raised ₹301 Cr, including ₹93 Cr fresh capital; promoter holding post issue is 70.84%.
- IPO proceeds include ₹56 Cr for equipment/civil work, ~₹7 Cr for rooftop solar, debt repayment and corporate purposes.
- Company targets ~₹80 Cr CapEx in FY27, of which ₹5 Cr was spent in Q1 and ₹75 Cr is planned over the remaining quarters.
Margins & Outlook
- Gross margin improved to 48.9%, up 146 bps YoY, driven primarily by richer product mix.
- Management expects operating EBITDA margin to improve by 20–25% over the next 2–3 years from current levels.
- Solar investment should reduce power costs, while new grades, machining and forging should further increase value addition.
- Export revenue was ₹8.6 Cr in Q1 vs ₹11.5 Cr YoY; decline was attributed to shipment timing/order phasing, with no change in long-term export trend.
- Long-term growth is expected from higher-value products, Unit 3, import substitution, defense, power and exports.
KEY TAKEAWAY
- 60% high-value mix today, targeting 70% + Unit 3 from FY28.
1September 9, 2026 841 2
