Interarch Q1 FY27: Growth holds up as capacity and exports take centre stage

Interarch Building Solutions started FY27 with a steady operating performance despite what management called a dynamic external environment. Revenue from operations rose 20.7% year on year to INR 459.6 crore in Q1 FY27. EBITDA increased faster, up 24.6% to INR 39.4 crore, and margins improved slightly to 8.6%.

Profit after tax, however, was flat at INR 28.2 crore versus INR 28.4 crore last year. Management attributed this mainly to lower other income as surplus cash and IPO proceeds were deployed into ongoing capex, reducing treasury interest income.

A key support for the near-term outlook is the order book. As of 31 July 2026, Interarch reported an order book of INR 1,864 crore. Orders booked between 1 May 2026 and 31 July 2026 were INR 609 crore, and the company highlighted a large INR 165 crore order in Gujarat. Management reiterated a disciplined approach to bidding, emphasizing selection of projects that match execution capacity and margin thresholds.

Q1 performance: growth in revenue, stable margin, PAT impacted by other income

The quarter showed stronger growth at the operating line than at the bottom line. EBITDA rose faster than revenue as pricing and operating control held up. PAT margin declined to 6.1% from 7.5% a year ago, largely reflecting lower other income, higher depreciation, and the usual mix of costs typical in steel building execution.

Management also addressed why the quarter’s revenue was lower than some prior quarters despite capacity additions. The Managing Director said the first half of the year can be seasonally weaker due to site clearances, monsoon disruptions, and the customized nature of dispatches. The company maintained that execution momentum should improve as site conditions normalize.

Capacity buildout: Gujarat commissioning and heavy structures in Andhra

The company’s strategy remains heavily centered on increasing manufacturing capacity and expanding capability for more complex steel solutions.

Interarch commissioned Phase 1 of its new PEB manufacturing facility at Kheda, Gujarat in July 2026. Phase 1 adds 20,000 MT of installed capacity and was commissioned with capex of INR 60 crore. Post this commissioning, the company stated total installed capacity increased to 221,000 MTPA. Phase 2 of the Gujarat plant is planned by Q2 FY27.

Alongside this, the company is pushing into heavy steel structures. The investor presentation indicates Phase 1 of the heavy steel structures facility is expected to be commissioned by Q2 FY27, with a further phase planned by Q4 FY27. In the earnings call, management stated trial production has started and commercial production is expected by end August or early September 2026.

Management’s rationale is clear. Demand is rising not only from manufacturing and warehousing but also from multi-storey buildings and data centers, where heavier sections and more complex fabrication are required. The company said the heavy structures capability should allow it to bid more competitively for projects where it was earlier constrained.

Exports and partnerships: North America focus and a higher-margin product line

Interarch is also working to create an export-led growth vector. Export contribution in Q1 FY27 remained small at around INR 10 to 12 crore, but management said they aim to reach roughly 10% of turnover from exports in the short to medium term over 1 to 2 years.

The most visible step here is the joint venture agreement with ER Steel Inc., where Interarch will hold 76% and ER Steel 24%. The JV targets an open web steel joist system product line for the US and Canadian markets. Importantly, management said the agreement includes a 100% offtake requirement, under which ER Steel purchases the entire output for distribution in North America.

Management provided early economics and ramp assumptions. The plant is planned for about 15,000 tonnes of capacity over time. The first phase is expected at 4,000 to 5,000 tonnes, which management linked to approximately INR 70 to 75 crore in revenue potential, with EBITDA margin expectations north of 20% once scaled. They indicated production could begin around end July next year, with a 2 to 3 year ramp to fuller utilization.

Separately, the company also announced a collaboration with Mold-Tek Technologies to support detailing for PEB and structural steel projects, with a stated focus on driving export orders.

Capital allocation and corporate actions: QIP and stock split

On 6 August 2026, the board approved raising up to INR 250 crore via a Qualified Institutional Placement, superseding an earlier INR 100 crore approval from March 2026. Management said this is linked to accelerating expansion plans.

On the earnings call, management outlined the broad intended allocation: around INR 150 crore for Phase 2 and Phase 3 of heavy structures in Andhra Pradesh, around INR 50 to 60 crore for an additional plant in Gujarat, and around INR 50 to 60 crore for an export-oriented unit tied to the North America product line.

The board also approved a stock split from face value INR 10 to INR 2 per share, subject to shareholder and regulatory approvals.

Key takeaways

Interarch’s Q1 FY27 reflects the pattern management described: operational performance is holding up, while bottom-line growth is temporarily muted by a decline in treasury income as cash moves into capex. The business continues to be led by industrial and infrastructure customers, but management commentary suggests an increasing share of projects in buildings, data centers, and multi-storey structures.

The more important story is strategic. Gujarat capacity is now commissioned, the heavy structures line is entering commercial production, and export partnerships are being put in place. If execution ramps as planned and working capital remains stable, the company’s guidance of INR 2,150 to INR 2,200 crore revenue for FY27 remains the key number to track, along with any improvement in EBITDA margin toward management’s longer-term ambitions.