Manaksia Coated Metals Q1 FY27: Margin Recovery, Export Strength, and a Busy Q2

Manaksia Coated Metals and Industries Limited (MCMIL) opened FY27 with a sharp recovery in profitability after a volatile second half of FY26. For Q1 FY27, the company reported consolidated total income of INR 263.07 crore, EBITDA of INR 29.09 crore and PAT of INR 14.10 crore. EBITDA margin stood at 11.06% and PAT margin at 5.36%.

Management positioned the quarter as a return to normal operations after two disruptions in FY26. First, a planned plant shutdown in Q3 FY26 for an Alu-Zinc technology upgrade. Second, a steep cost escalation in Q4 FY26 linked to Middle East conflict related increases in fuel and freight costs. In Q1 FY27, management stated the plant ran without disruption, fuel supply was restored, and the Alu-Zinc line stabilised. The company also said new orders booked in the quarter were priced to cover the current cost environment with a margin buffer.

A better quarter was driven by realisations and mix

One of the clearest improvements in Q1 FY27 was price realisation. Management said realisation per ton improved to INR 88,597 from INR 79,180 in Q4 FY26. They attributed the change to a combination of better pricing on new orders and a richer product mix.

The investor presentation shows that the company’s revenue mix continues to tilt toward pre-painted steel, which it describes as more value-added. For Q1 FY27, pre-painted steel sheets and coils accounted for 73.17% of revenue, while Alu-Zinc or galvanised steel sheets and coils accounted for 21.26%. The remaining 5.57% came from other sources. Management also clarified in the call that galvanised steel volume was zero in Q1 FY27, as the company had already shifted to Alu-Zinc.

Export performance remained a key pillar. The company disclosed an export share of 64.93% in Q1 FY27, compared with 56.78% in Q1 FY26. Management also stated it entered four new international markets during the quarter: Latvia, Brazil, Jamaica and Somalia.

Capacity and utilisation signal where growth is expected

MCMIL’s near-term growth strategy is centred on capacity expansion in pre-painted products and ramp-up in Alu-Zinc.

In Q1 FY27, the presentation shows installed capacity of 180,000 MTPA for Alu-Zinc coating and 86,000 MTPA for pre-painted steel. Capacity utilisation in the quarter was 62.09% for Alu-Zinc and 95.39% for pre-painted. In the concall, management described the pre-painted line as essentially running at full capacity and said demand is waiting for incremental capacity.

That incremental capacity is expected to arrive in Q2 FY27 through commissioning of the second colour coating line (CCL2). The company stated that CCL2 will increase pre-painted capacity from 86,000 MTPA to 236,000 MTPA. The presentation lists estimated capex of INR 65 crore for this project and notes it is designed to support higher value paint systems and premium finishes.

Alongside capacity, management repeatedly highlighted unit economics. In the call, the company reported blended EBITDA per ton of about INR 10,400 for Q1 FY27, calling it the highest ever recorded. Management said this outcome reflects stable operations, a stronger export mix and improved pricing.

Cost levers: captive solar and longer-term backward integration

A key operational lever scheduled for Q2 FY27 is the company’s 7 MW captive solar power plant. The presentation states the plant is expected to reduce effective power costs by up to 40% and deliver annual savings of up to INR 7 crore against capex of INR 30 crore. In the call, management added that the solar project could offset 50% to 55% of the Kutch plant’s grid power consumption.

Beyond FY27, the company’s Phase 2 plan is oriented around backward integration and a doubling of Alu-Zinc capacity. The investor deck outlines a 360,000 MTPA cold rolling mill (CRM) complex targeted for FY28, and a second Alu-Zinc coating line expected to raise Alu-Zinc capacity from 180,000 MTPA to 360,000 MTPA by FY28E.

Management connected the CRM project to two themes: supply stability and working capital efficiency. In the call, the company stated its current working capital cycle is around 75 days, driven by inventory across many SKUs and other working capital items. Management said the CRM complex should allow the company to reduce the number of SKUs it needs to stock and could materially reduce inventory. While the exact improvement timeline remains linked to project execution, the strategic intent is clear.

Order book visibility and FY27 guidance

The company disclosed a total order book of INR 420 crore, with execution expected over the next six months. Exports represent 87% of this order book value.

On forward expectations, management gave a numeric indication for FY27. Assuming 50% to 60% utilisation of the new capacity, management said the company could reach around 150,000 tons in FY27 and potentially achieve revenue of around INR 1,300 crore to INR 1,350 crore.

On capex funding, management stated Phase 2 capex for CRM and the second Alu-Zinc line is currently estimated at around INR 350 crore and would be funded through a mix of internal accruals, debt and equity. They also indicated incremental debt needs could be around INR 100 crore and said they expect leverage not to exceed about 1.25x debt-to-equity.

Takeaways

Q1 FY27 shows what MCMIL’s earnings profile can look like when operations run normally and pricing resets quickly after cost shocks. The quarter delivered a sharp sequential margin recovery, supported by higher realisations and a pre-painted heavy mix. The next test is execution in Q2 FY27, with two projects expected to be commissioned in the same quarter: CCL2 and the 7 MW captive solar plant.

Longer term, the company’s FY28 projects in cold rolling and Alu-Zinc capacity expansion aim to deepen integration and reduce dependence on external inputs. The FY29 ambition to triple output, income and EBITDA sets a clear direction, but the delivery will depend on how quickly new capacities ramp and whether export demand remains durable.