M&B Engineering: Navigating Tariffs and Fueling Growth in Q2 FY26

M&B Engineering Limited, a prominent player in India's pre-engineered buildings (PEB) and self-supported roofing systems sector, has reported a robust performance for the second quarter and first half of Fiscal Year 2026. Despite facing headwinds from currency fluctuations and international tariffs, the company demonstrated significant top-line growth and strategic advancements, reinforcing its market position and future outlook.

For Q2 FY26, M&B Engineering recorded a consolidated revenue from operations of INR 306.85 crores, marking a substantial 49% year-over-year growth. The first half of FY26 saw an even stronger performance, with revenues reaching INR 544.51 crores, a 57% increase compared to H1 FY25. This growth was largely in line with management's expectations, driven by strong demand across both its Phenix (PEB) and Proflex (roofing) divisions.

Segmental Performance and Export Surge

The Phenix division, specializing in PEBs and complex structural steel components, was a significant growth driver. Its revenue for Q2 FY26 stood at INR 243.68 crores, contributing approximately 79.41% to the total revenue. A notable highlight was the surge in export sales, primarily to the US market, which soared to INR 54 crores in Q2 FY26 from just INR 3 crores in Q1 FY26. This impressive jump, despite initial revenue recognition delays in Q1, underscores the company's successful penetration into international markets.

The Proflex division, focusing on self-supported steel roofing solutions, also delivered strong results, with Q2 FY26 revenue at INR 63.17 crores, accounting for 20.59% of the total. The company noted robust demand in key verticals such as railways and warehousing, indicating a strong tailwind for this segment. The overall order book remains healthy, with an outstanding consolidated order book of INR 930.56 crores as of September 30, 2025, providing clear revenue visibility for the coming months.

*Adjusted - Excluding one-off income impact of Rs. 14.66 Crores **Unadjusted - Including one-off income impact of Rs. 14.66 Crores

Navigating Challenges and Strategic Expansions

Despite the strong top-line performance, M&B Engineering faced margin pressures in Q2 FY26. The Proflex division experienced a foreign exchange loss of INR 2.15 crores on imports due to the rapid rupee devaluation. Concurrently, the Phenix division absorbed INR 2.85 crores in US sectoral tariffs on steel and aluminum imports for orders booked prior to the tariff imposition. Management acknowledged these impacts transparently, explaining that while some tariff increases were renegotiated with customers, a portion had to be absorbed to maintain long-term customer relationships, particularly as a new entrant in the US market.

To sustain its growth trajectory, M&B Engineering is aggressively expanding its capacities. The company is undertaking a brownfield expansion at its Sanand PEB facility, adding an additional 20,000 TPA capacity, expected to be operational by Q1 FY27. A similar expansion at the Cheyyar plant, also adding 20,000 TPA, is planned for FY28. For the Proflex division, three new mobile manufacturing units are being added, one from UAE and two from the US, collectively boosting capacity by 3 lakh square meters per annum. The UAE unit is expected to be operational by December 2025, with the US units following by Q1 FY27. These strategic investments are backed by a projected CAPEX of INR 60 crores for FY26 and INR 60-70 crores for FY27.

Outlook and Management Confidence

Management expressed confidence in achieving an overall top-line growth of 25% for FY26, targeting total revenues between INR 1,225 and INR 1,250 crores, with export sales expected to reach INR 160 crores. They anticipate maintaining a combined EBITDA level of around 13% for the full year. The company's focus on expanding its customer base, particularly in the US, and leveraging its certified manufacturing facilities (Sanand is the only AISC and CWB certified PEB plant in India) positions it well for future growth.

The company's proactive approach to capacity expansion, strategic market penetration, and transparent communication regarding operational challenges demonstrates a disciplined execution strategy. M&B Engineering is poised to capitalize on the low penetration of PEBs in India, increasing focus on renewable energy, and significant infrastructure development, ensuring sustained growth and value creation for its stakeholders.