M&B Engineering Q1 FY27: Strong growth, a full order book, and a cost-heavy quarter

M&B Engineering started FY27 with a healthy topline, supported by solid execution across its two operating divisions. In Q1 FY27, consolidated revenue from operations rose to 291 crore, up 22.5% year on year. EBITDA increased modestly to 36 crore, but the EBITDA margin softened to 12.3% versus 14.2% in the year-ago quarter. PAT came in at 22 crore, up 20.8% year on year, with the PAT margin stable at 7.5%.

The company operates through two key brands. Phenix focuses on pre-engineered buildings (PEBs) and complex structural steel components, while Proflex provides self-supported steel roofing systems through a fleet of mobile manufacturing units. During the quarter, both divisions reported strong growth. Phenix delivered 214 crore of revenue, up 22% year on year. Proflex posted 77 crore, up 25% year on year.

Exports, although still a smaller contributor, improved meaningfully. Export revenue was 28 crore, accounting for 10% of total revenue. Management linked the margin pressure during the quarter to a sharp increase in freight costs for the US and higher inland transportation costs in the US, driven by continued geopolitical tensions.

Q1 FY27 performance: growth stayed strong, margins took a hit

In absolute terms, the quarter showed strong operating momentum. But the profitability profile reflected cost headwinds. Management highlighted freight as a key swing factor, with export freight rates described as materially elevated compared to normal levels.

Operating EBITDA, as referenced by management, was 33 crore with an operating EBITDA margin of 11.4%. The difference between reported EBITDA and operating EBITDA reflects the inclusion of operating other income in the consolidated income statement.

The reduction in finance cost was notable. It aligns with the company’s disclosure on the utilisation of IPO proceeds, where 58.75 crore was fully utilised toward prepayment of term loans.

Segment view: Phenix remains the growth engine; Proflex stays consistent

The revenue mix in Q1 FY27 continued to be led by Phenix. Phenix contributed 74% of consolidated revenue, while Proflex contributed 26%.

At a full-year level, FY26 revenue from operations was 1,260 crore. The company’s snapshot disclosed FY26 division revenue of 985 crore from PEBs and complex structural steel components and 275 crore from self-supported roofing solutions.

While the documents do not provide segment-level profitability, management commentary in the call discussed that export orders typically carry higher margins than domestic orders. In a normal environment, management indicated export EBITDA margins could be around 16% to 18%, while domestic is around 11%. In the current freight environment, export EBITDA margins were discussed in a lower band of about 15% to 16%.

Order book composition also supports the narrative of Phenix being the primary growth driver. Orders on hand as of June 30, 2026 were 1,053 crore, with Phenix accounting for 837 crore and Proflex accounting for 216 crore. Within Phenix, export orders were 278 crore, and management stated that the bulk of these exports are expected to be shipped during the current fiscal.

Capacity expansion and structural steel: the next phase of growth

A key theme from both the investor presentation and the earnings call was capacity-led growth. Management highlighted that the Sanand facility is operating at optimal utilisation. The company’s brownfield expansion at Sanand is expected to be commissioned in October 2026 and will increase PEB capacity from 72,000 MTPA to 92,000 MTPA.

Beyond PEB capacity, the company is scaling up in heavy structural steel, a segment it is positioning for opportunities in data centers and high-rise buildings. The board approved a 30 crore investment in a fully automated heavy structural steel processing line at Sanand, expanding capacity from 12,000 tonnes to 22,000 tonnes. Management indicated the line is expected to be operational by Q1 FY28.

Cheyyar, the newer plant commissioned in 2024, is another pillar of the capacity roadmap. Management stated that AISC certification has been received for Cheyyar, making both PEB manufacturing facilities AISC certified. This is expected to enable exports to the US West Coast via the Pacific route from the next fiscal. Management also said Cheyyar utilisation is improving, with a target of about 60% utilisation during the current fiscal.

The company plans to commence implementation of a brownfield expansion at Cheyyar involving additional PEB capacity of 20,000 TPA during the current fiscal, with completion planned for Q3 FY28. On completion, management stated total PEB and structural steel capacity will increase to about 1,54,000 tonnes per annum effective Q3 FY28.

On the Proflex side, the company commissioned two additional mobile manufacturing units in Q1 FY27, taking the total fleet to 17 and lifting installed capacity to 21 lakh square meters per annum. Management linked this to demand opportunities in SMEs, railways, and agri-warehousing.

Guidance and what to track next

Management reiterated confidence of delivering revenue growth of over 25% in FY27. On margins, the tone was cautious. Management said it would prefer to wait at least one more quarter before providing specific margin guidance, citing uncertainty on the cost front.

The near-term variables are clear from management commentary. Freight costs have been volatile, and the company expects that increasing export revenue over the coming quarters could support a gradual improvement in margins, with a clearer impact expected in the second half of the fiscal. The commissioning of additional Sanand capacity is also expected to support operating performance in H2.

The Q1 FY27 update positions M&B Engineering as a company with strong demand visibility and a structured capacity roadmap. Execution of the announced capex and stabilisation of logistics costs will be key determinants of whether profitability can move back toward the company’s medium-term targets as volumes scale.