Add Man Industries Ltd For Target Rs.480 By Emkay Global Financial Services
Man reported Q1FY26 revenue of Rs7.4bn (-1% YoY; -13% QoQ), broadly in line with expectations. The QoQ decline was anticipated, as the management had earlier highlighted divergence between H1 and H2, with a stronger performance expected in H2. Excluding the Rs3.7bn one-off in Q4FY25, core revenue was in line with expectations. EBITDA was Rs810mn, with a 10.4% margin, in line with recent trends. The order book stands at Rs32bn with a bid pipeline of Rs150bn. The Saudi plant is to be commissioned in FY26; the Jammu plant will start hot trials in Q4FY26. Rs8.9bn of the Rs12bn capex is spent, with the rest likely in 6-12M. The management guided for 15-20% revenue growth in FY26, a faster operating profit growth, and +10% EBITDA margin, with full LSAW mill bookings and a high-value export mix driving a stronger H2.
Q1 sequentially soft, along expected lines
Man reported Q1 revenue of Rs7.4bn (-1% YoY; -13% QoQ). The QoQ decline was anticipated, as the management had earlier highlighted a divergence between H1 and H2, with a stronger performance expected in H2. For comparison, Q4FY25 included a one-off of Rs3.7bn, which has been excluded from core revenue. EBITDA stood at Rs810mn, with the margin at 10.4%, maintaining consistency with previous quarters. The order book stands at Rs32bn, marginally lower than the earlier Rs35bn, though the management indicated that several orders are in advanced stages and could strengthen the book. The existing order book is slated for execution over the next 6–12 months.
Key takeaways from the Q1 conference call
Orders and pipeline: The order book stands at Rs32bn with a pipeline of Rs150bn bids; exports account for ~80% of the book. FY26 order inflow target is Rs39bn, with Rs14bn booked in Q1. Execution of a major South Asian order began in Q1FY26, contributing ~30% to the quarter’s turnover, and is expected to be completed by year-end. Projects: The Saudi Arabia plant is scheduled for commissioning within FY26; the Jammu stainless steel plant is expected to begin hot trials in Q4FY26. The management has already committed/spent Rs8.9bn of the Rs12bn (total) capex for both the projects; the balance would be spent in 6-12M. Guidance and Outlook: The management has guided for FY26 revenue growth of 15–20% YoY; operating profit is guided to grow at a faster pace with a steady margin profile. Man expects H2 to be significantly stronger than H1, supported by full capacity bookings at both LSAW mills. EBITDA margin is expected to remain above 10%, driven by high-value exports and the value-added product mix.
Reiterate ADD
We remain convinced about Man’s growth/earnings trajectory, with revenue CAGR of 16% over FY25-29E. We expect the core EBITDA margin to expand by 150bps, with the addition of stainless steel. With project execution slated in 6-12M, we expect FY27E and FY28E to see meaningful earnings step-up. We maintain ADD with a TP of Rs450.
For More Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH000000354
