Everest Kanto Cylinder FY26: Margins rise as revenue stays flat

Everest Kanto Cylinder Limited (EKC), a manufacturer of high pressure seamless steel gas cylinders, closed FY26 with steady operating momentum on margins, even though consolidated revenue was slightly lower year on year. For FY26, consolidated revenue stood at Rs. 1,470.6 crore versus Rs. 1,499.2 crore in FY25. EBITDA grew to Rs. 203.0 crore, up 15.7 percent, with EBITDA margin expanding to 13.8 percent from 11.7 percent. Profit after tax rose sharply to Rs. 146.7 crore, up 50.1 percent, and FY26 EPS was reported at Rs. 13.09.

The quarter reflected a similar pattern. Q4 FY26 consolidated revenue was Rs. 358.2 crore versus Rs. 422.1 crore in Q4 FY25, a decline of 15.1 percent. Yet, EBITDA increased to Rs. 39.6 crore, up 4.5 percent, and the consolidated EBITDA margin expanded to 11.1 percent from 9.0 percent. Reported Q4 FY26 PAT came in at Rs. 45.7 crore, up 244.4 percent year on year. The company noted that profitability in the quarter was supported by lower tax expense, including a deferred tax credit of Rs. 24.0 crore at the consolidated level.

The India business remained a key contributor in the period. The presentation reported India business of Rs. 250.3 crore in Q4 FY26 and Rs. 966.7 crore for FY26. It also noted that consolidated revenue in Q4 was supported by resilient performance in India, while international revenues were relatively subdued.

FY26 performance: profitability led by mix and realizations

EKC attributed the improvement in EBITDA and margins to a favourable product mix, improved realizations, and continued cost discipline. This was visible in the consolidated cost structure for FY26, where COGS declined to Rs. 744.5 crore from Rs. 818.4 crore, while employee benefits expense increased to Rs. 176.2 crore from Rs. 148.7 crore.

At the standalone level, FY26 revenue from operations was Rs. 966.7 crore, up from Rs. 946.2 crore. Standalone EBITDA increased to Rs. 154.4 crore from Rs. 100.6 crore, and the standalone EBITDA margin expanded to 16.0 percent from 10.6 percent. Standalone PAT rose to Rs. 81.2 crore from Rs. 53.3 crore.

The quarterly standalone performance also showed margin strength. Q4 FY26 standalone revenue from operations was Rs. 250.3 crore versus Rs. 267.2 crore in Q4 FY25. EBITDA was Rs. 30.6 crore versus Rs. 23.6 crore, with EBITDA margin improving to 12.2 percent from 8.8 percent.

Balance sheet and ratios: higher assets, low reported leverage

The company’s consolidated balance sheet reflected an expanding asset base. Total assets increased to Rs. 1,729.3 crore as of March 31, 2026, from Rs. 1,390.5 crore in 2025. Fixed assets rose to Rs. 755.3 crore in 2026 from Rs. 579.8 crore in 2025. Net current assets were reported at Rs. 852.6 crore in 2026 versus Rs. 742.8 crore in 2025.

On the liabilities side, shareholder funds increased to Rs. 1,399.8 crore in 2026 from Rs. 1,206.4 crore in 2025. Long-term debt was reported at Rs. 154.2 crore in 2026 versus Rs. 52.0 crore in 2025, while short-term debt stood at Rs. 110.4 crore versus Rs. 116.4 crore.

Key ratios in the presentation pointed to comfortable liquidity and modest leverage. The current ratio improved to 3.7x in FY26 from 2.8x in FY25. Debt-equity remained at 0.2x in FY26. Debt service coverage improved to 6.6x from 5.3x.

Profitability ratios also strengthened. ROE increased to 11.7 percent in FY26 from 8.5 percent in FY25. Net profit percentage was shown at 10.4 percent in FY26 versus 6.5 percent in FY25. ROCE was 11.2 percent in FY26 versus 10.2 percent in FY25.

Business context: positioning in industrial and clean energy gas storage

EKC described itself as a clean energy solutions company and a leading global manufacturer of seamless steel gas cylinders, with over 20 million industrial gas and CNG cylinders currently in service. It operates manufacturing facilities in India at Tarapur, Kandla SEZ, and Mundra, and internationally at Jebel Ali Free Zone in Dubai, Pittsburgh (PA) in the USA, and Egypt. Aggregate capacity was stated at about 1.8 million cylinders annually.

Its product range includes industrial, CNG and jumbo cylinders used for high pressure storage of gases such as oxygen, hydrogen, nitrogen, argon, helium, air, and other gases. The company also highlighted application exposure across manufacturing, fire equipment and suppression systems, medical establishments, aerospace and defence, and automobiles.

As part of its market engagement, EKC participated in EGYPS 2026 in Cairo in April 2026, where it showcased high pressure gas cylinder solutions and noted stronger engagement with customers and stakeholders across MENA markets.

The presentation also referenced an external market datapoint: a Valuates Reports study indicating the global CNG cylinder market is projected to reach USD 2.22 billion by 2032, with an indicated CAGR of 8.3 percent. The stated drivers included fleet operators and public transport networks transitioning to natural gas vehicles, and increasing emphasis on cylinder safety and compliance.

Dividend and investor takeaway

EKC’s board recommended an annual dividend of Re. 0.70 per share on a face value of Re. 2 per share for FY 2025-26. From an operating standpoint, the key takeaway from FY26 is that margins and profits improved meaningfully even as consolidated revenue remained broadly flat and Q4 revenue fell year on year. The company’s own commentary pointed to mix, realizations, and cost discipline as the key levers behind the margin expansion.

Investors tracking EKC through FY27 will likely focus on whether the improved margins and profitability sustain without one-off tax benefits, and whether international demand normalizes, given the note that international revenues remained relatively subdued in Q4 FY26.