M&B Engineering sees H2 export dispatches rise on orders

M&B Engineering Limited expects a much bigger rise in export dispatches in the second half (H2) of FY27, after export revenue increased 68% year on year to Rs 95 crore in H1 FY27. Management said the H2 dispatch programme was firmed up, with the company booked for FY27 and part of the following year.

Why will M&B Engineering's H2 export dispatches increase?

M&B Engineering expects H2 export dispatches to increase because work already booked is scheduled for delivery in the period. Management said it was fully booked for the current fiscal year and part of the next, and described the larger H2 dispatch increase as firmed up and lined up. This outlook follows Rs 95 crore of export revenue in H1 FY27, compared with 68% year-on-year growth.

A Rs 212 crore export order won in the prior year is one identified contributor to the H2 schedule. Management said more than 50% of that order had been dispatched by the Q2 FY27 call, but revenue recognition had reached about one-third, including roughly 1,800 tonnes. It said the remaining revenue should be recognised in H2, illustrating the difference between dispatches and reported revenue.

Export incentives are also tied to dispatch rather than billing, according to Chief Financial Officer Keyur Shah. M&B Engineering reported Rs 67 crore of export revenue in Q2 FY27, while its export incentive was Rs 54 lakh because some associated cargo had been dispatched in earlier quarters. Management said the incentive would be higher in H2 as dispatches rise.

How does M&B Engineering balance exports and domestic business?

M&B Engineering is pursuing both markets because management said domestic work supplies volume while international business supplies margins. Domestic revenue was Rs 317 crore, or 83% of Q2 FY27 revenue, while export revenue was Rs 67 crore, or 17%, out of revenue from operations of Rs 385 crore. Both domestic and export revenue increased 25% year on year in the quarter.

Exports grew faster in H1 FY27 than the consolidated top line. Export revenue rose 68% year on year to Rs 95 crore, whereas revenue from operations increased 24.1% to Rs 676 crore. In Q2 FY27, profit after tax rose 32.8% to Rs 29 crore from Rs 22 crore, while management attributed the overall result partly to the mix of domestic and export turnover.

The Phenix division generated Rs 298 crore, or 77% of Q2 revenue, with 22% year-on-year growth, while Proflex contributed Rs 87 crore, or 23%, with 37% growth. Management said data-centre and high-rise orders received after Q2 had margins similar to existing heavy industrial-building work because the processes and inputs were comparable.

What is M&B Engineering's North American export pipeline?

M&B Engineering said it has North American export inquiries of more than 40,000 to 50,000 tonnes and hopes they will convert into orders in the next few months. Management also reported a revival in inquiries from Canadian associates after a slowdown in the previous quarter. It did not put a value or conversion target on this inquiry pipeline.

Management said inquiry-to-order conversion had been slower during the preceding five to six months and hoped closures would improve after the last two quarters. However, it characterised the effect of US midterm elections as a wait-and-watch matter. The 25% duty remained in force, and management said it saw no immediate reduction.

The company distinguished prospective pipeline conversions from the H2 dispatch programme already in hand. Management said lower freight could help order conversions at better pricing if conditions connected with Iran improved, but this was conditional rather than guidance. The booked work for FY27 and part of the next year was the stated basis for the H2 dispatch outlook.

What could change M&B Engineering's H2 margins?

M&B Engineering expects better margins in the next two quarters, management said, because freight has declined from its peak even though it remains above original cost assumptions. Customers are supporting the company by sharing part of the additional freight cost. Management did not provide a revised margin target for H2 FY27.

H1 FY27 gross margin was about 32%, with management attributing a slight impact to steel-price variation. It said many contracts are on a fixed-order basis, but newer orders reflected Q2 steel prices. Management also expects some steel-price softening, without quantifying the likely change.

Earnings before interest, tax, depreciation and amortisation rose 17.6% year on year to Rs 43 crore in Q2 FY27 from Rs 37 crore, while revenue grew 25.4%. For H1 FY27, earnings before interest, tax, depreciation and amortisation increased 12.1% to Rs 79 crore and profit after tax increased 28% to Rs 51 crore. Management said improving margins remained an endeavour as older orders are completed.

Can M&B Engineering support export growth with its capacity?

M&B Engineering said its Cheyyar plant operated at 55% to 60% utilisation in Q2 FY27, leaving capacity before full use. It has also begun a 20,000-tonnes-per-year brownfield expansion at Cheyyar, which management expects to become operational in Q3 FY28. The project would lift combined pre-engineered building and structural-steel capacity to 154,000 tonnes per year.

At Sanand, Phase 1 of the brownfield expansion began commercial production on October 26, 2026, adding 20,000 tonnes per year of pre-engineered building capacity. That increased Sanand capacity to 92,000 tonnes per year and total pre-engineered building capacity across Sanand and Cheyyar to 124,000 tonnes per year. A further 10,000-tonnes-per-year structural-steel expansion at Sanand is scheduled for Q1 FY28.

Domestic demand also requires capacity allocation. Management said Phenix had domestic inquiries exceeding 2.5 lakh tonnes, while Proflex had more than 20 lakh square metres of inquiries, a railway backlog above 3 lakh square metres and Q2 railway order booking of about 80,000 square metres. M&B Engineering is assessing wider-span seam technology for Proflex and said it would decide on feasibility during the current quarter.

Conclusion

M&B Engineering's H2 FY27 export expectation is based chiefly on scheduled deliveries from its booked order base, including remaining revenue recognition from a Rs 212 crore export order. The company is maintaining domestic and export activity together: exports grew 68% in H1 FY27, while domestic revenue remained 83% of Q2 revenue and its larger volume base.

The next developments to watch are the timing of conversion from the 40,000-to-50,000-tonne North American inquiry pipeline, freight and steel-price movements, and the Q3 FY27 results. Management said it expected to provide better clarity then on data-centre opportunities and order conversions, while the Cheyyar expansion remains scheduled for Q3 FY28.