M&B Engineering hyperscaler order starts Q3 revenue contribution

M&B Engineering Limited expects its first large hyperscaler data-centre order to start contributing near the end of Q3 FY27, with most revenue in Q4 FY27, following Q2 FY27 revenue of Rs 385 crore, up 25.4% year on year. Management called the award a design breakthrough and did not disclose its value or tonnage.

What did M&B Engineering win in the data-centre market?

M&B Engineering won a large data-centre order from a hyperscaler, marking its entry into this construction use case. Management said the order and a high-rise building order were received after Q2 FY27, meaning neither was included in the Rs 1,109 crore order book cited during the call. It said it would disclose the sizes of the two orders with the current quarter’s results.

The awarded data-centre project is Phase 1 of a larger plan at one location, according to management. It said similar tonnage could potentially recur in the coming months, but did not disclose a follow-on contract. Management also said it expected to be better placed to discuss the contribution from the order and its data-centre inquiry pipeline on the Q3 results call, which it indicated could be in January.

The secured project is a single-storey building and is primarily a pre-engineered building, or PEB, order. Management said multi-storey data centres generally require a hybrid of PEB components and heavy structural steel because they need heavier columns. It did not provide a standard steel-tonnage-per-megawatt measure, citing differences in building height, racking systems and rack loading.

When will M&B Engineering recognise data-centre revenue?

M&B Engineering expects the data-centre order to begin contributing toward the end of Q3 FY27 or at the beginning of Q4 FY27, with the major part expected in Q4 FY27. The timing means the new project did not contribute to the Rs 385 crore revenue reported for Q2 FY27, the quarter ended September 2026.

Q2 FY27 execution across the Phenix and Proflex divisions lifted revenue from Rs 307 crore in Q2 FY26. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased to Rs 43 crore, while profit after tax, or PAT, rose to Rs 29 crore. The data-centre project adds a prospective revenue stream to this existing divisional execution base.

For H1 FY27 ended September 2026, M&B Engineering reported revenue of Rs 676 crore, compared with Rs 545 crore in H1 FY26. EBITDA rose from Rs 70 crore to Rs 79 crore, while PAT increased from Rs 40 crore to Rs 51 crore. Management said it remained confident of delivering FY27 revenue growth of more than 25%, based on inquiry pipelines in both divisions.

How could the data-centre order affect M&B Engineering's margins?

M&B Engineering said the data-centre project uses processes and inputs similar to the heavy industrial buildings it already executes, so management initially described margins as similar to its current work. The end use differs, but the project is principally PEB because it is a single-storey building. Management did not disclose the expected EBITDA margin or the contract value for the hyperscaler order.

Management also said that a larger project at a single location can offer economies of scale and could deliver a slightly better margin. This was an observation about the potential economics of large projects rather than a margin target. It distinguished the possibility from the company’s existing work by noting that data centres are only beginning to adopt steel as a construction methodology in India.

The broader margin context was an H1 FY27 gross margin of about 32%, which management said was slightly affected by steel-price variation. It said many projects operate on a fixed-order basis and that newer orders booked after Q2 FY27 steel-price increases had factored in those prices. Management also expects some steel-price softening, although it did not quantify the effect.

Freight remained another factor in the export mix. Management said customers were supporting part of higher freight costs on delivered-at-site export projects, and freight had started to decline but remained above the level included in original costing. It said margins could improve in the coming two quarters, contingent on freight, steel prices and execution conditions.

What do M&B Engineering's pipeline and capacity show?

M&B Engineering said there are many data-centre inquiries, although closures have not occurred widely yet. Management expects multiple expansions over the next three to four quarters and said successful execution of the secured order could encourage other hyperscalers to close orders. These are management expectations, not disclosed contracted projects beyond the award already received.

Outside data centres, the Phenix division had domestic inquiries exceeding 2.5 lakh tonnes and North American export inquiries of more than 40,000 to 50,000 tonnes. Management said it hoped these inquiries would convert over the next few months. It also said the company was fully booked for the current fiscal year and part of the next year, with a larger jump in export dispatches expected in H2 FY27.

Proflex had inquiries exceeding 20 lakh square metres, a railway backlog above 3 lakh square metres and Q2 FY27 railway order booking of about 80,000 square metres. M&B Engineering commissioned three additional mobile units over the preceding three quarters. It said it was assessing a specialised wider-span seam technology and would take a feasibility decision during the quarter.

Cheyyar plant utilisation was between 55% and 60% in Q2 FY27, while management said Proflex utilisation had benefited from larger project sites that reduced travel time. M&B Engineering incurred Rs 43 crore of capital expenditure in Q2 FY27, taking H1 FY27 capital expenditure to Rs 70 crore. Management said it had expedited the second phase of expansion at Cheyyar.

Conclusion

M&B Engineering’s hyperscaler order establishes a new data-centre end market while relying on PEB and structural-building capabilities that management says resemble its existing heavy industrial work. Revenue is expected from late Q3 FY27 and mainly in Q4 FY27, whereas reported Q2 FY27 performance reflected Rs 385 crore of revenue and Rs 29 crore of PAT from existing execution.

The next event to watch is the Q3 FY27 results call, when management said it may provide greater clarity on data-centre revenue contribution and inquiry conversion. Management’s disclosed milestones also include a decision on wider-span Proflex equipment during the quarter, Cheyyar’s second expansion phase and potential data-centre expansions over the next three to four quarters.