Menon Bearings Q4 FY26: Record Quarter Caps a Step-Up Year

Menon Bearings Limited closed Q4 FY26 with its strongest quarterly print yet, and it was not a one-off spike. Consolidated revenue from operations reached 87.79 crore, up 34.7 percent year on year and 12.1 percent sequentially. Profitability expanded faster than sales. EBITDA rose to 22.22 crore, up 95.4 percent year on year, while profit after tax climbed to 13.78 crore, up 108.7 percent. The quarter also marked a clear margin reset, with EBITDA margin at 25.31 percent versus 17.45 percent a year ago, and PAT margin at 15.70 percent versus 10.13 percent.

The FY26 close-out gives context to that quarter. For the full year, revenue from operations came in at 299.46 crore, up 23.5 percent year on year. EBITDA reached 64.42 crore, up 42.7 percent, and PAT rose to 38.25 crore, up 53.4 percent. That mix of growth and margin expansion suggests the company is scaling with tighter cost control and better product economics, supported by capacity additions and a rising export contribution.

Q4 and FY26 performance, with margins doing the heavy lifting

A look inside the quarterly income statement shows where the operating leverage is coming from. In Q4 FY26, operating expenses were 47.85 crore, up 27.1 percent year on year, which is slower than revenue growth. Employee costs rose 9.4 percent year on year to 11.69 crore, and other expenses rose 10.4 percent to 6.04 crore. With revenue up 34.7 percent, that cost discipline translated directly into a 786 bps expansion in EBITDA margin year on year.

The company also highlighted a classification change in Q4 FY26 versus Q4 FY25: raw material consumption increased by 12 crore, with a corresponding decrease in operating expenses because certain tools were reclassified from operating expenses to raw material consumed. This note matters for investors reading the expense lines, because it implies that part of the quarter-on-quarter comparability is accounting presentation, not a sudden shift in cash cost.

Below the operating line, finance cost in Q4 FY26 was 1.40 crore versus 0.52 crore in Q4 FY25, and depreciation rose to 2.96 crore from 1.85 crore. Even after these increases, the operating gain was large enough to lift PBT to 18.07 crore, up 93.8 percent year on year.

Segment story: Bimetal scale, Alkop potential, Brakes building approvals

Menon Bearings operates through three divisions: Bimetal products, Alkop (aluminium die casting), and Braking systems. In Q4 FY26, segment revenue was led by Bimetal at 64.00 crore, followed by Alkop at 20.15 crore and Braking systems at 3.03 crore. For FY26, Bimetal contributed 212.54 crore, Alkop 72.18 crore, and Braking systems 9.09 crore.

The mix is still anchored in Bimetal, which was 72.34 percent of FY26 revenue and 73.41 percent in Q4 FY26. Alkop contributed 24.57 percent in FY26 and 23.12 percent in Q4 FY26. Braking systems remained a small but growing piece at about 3 percent.

The more important angle is where growth is coming from. In the Bimetal business, management commentary points to increasing exports and domestic orders for larger diameter bearings, bushes, and washers. The company also cited samples received from a prominent US company for the aftermarket, and a focus on high-volume, high-value parts as incremental business.

Alkop appears to be the next growth platform. The company stated it has developed and tested 38 parts for a major customer, with substantial orders anticipated across domestic and export markets. It expects this Alkop initiative to generate 50 to 60 crore annually within two years. Operationally, Alkop is backed by in-house melting, die casting (pressure and gravity), machining, and powder coating, with capability to handle components up to 12 kg.

Braking systems is positioned as an expansion story rather than a current profit driver. The company highlighted a growing export footprint and domestic aftermarket, with a Dynamometer installation underway. Management expects a significant turnover increase in FY26-27 after commissioning, supporting railway approvals and OEM orders. Execution on approvals and commissioning timelines will be a key monitorable for this division.

Exports and channel mix: diversification with rising global share

The FY26 revenue split was 66 percent domestic and 34 percent exports, compared with 70 percent domestic and 30 percent exports in FY25. In absolute terms, FY26 domestic revenue was 193.6 crore and exports were 100.2 crore, versus FY25 domestic of 167.5 crore and exports of 71.8 crore.

Channel-wise, the company continues to sell across OEMs, exports, replacement, and others. In Q4 FY26, OEM contributed 45.42 percent, exports 35.12 percent, replacement 8.09 percent, and others 11.59 percent. For FY26, OEM was 49.42 percent, exports 34.14 percent, replacement 7.62 percent, and others 9.90 percent. The mix reflects meaningful exposure to OEM demand while still retaining the stability of aftermarket reach.

This is reinforced by the company’s stated after-market footprint: a network of 1,000 dealers and distributors, products at over 10,000 retail outlets, and an aftersales network serving 30,000 plus mechanics and reborers. A dedicated marketing team of 40 executives provides technical support services. That infrastructure matters because it can cushion volatility in OEM ordering cycles, especially in legacy ICE-linked categories.

Capacity, capex, and cost programs: investing to protect margins

The FY26 results were delivered alongside capacity expansion. In Bimetal, capacity increased to 580 lakh units in FY26 from 486 lakh in FY25, about a 19 percent uplift. In Brakes, capacity rose to 30 lakh pieces from 18 lakh in FY25, about a 67 percent uplift. Alkop capacity remained at 1,440 MT across FY24 to FY26, though the company plans additional machining capacity.

Capex deployment and forward plans are clearly laid out. In FY26, the company deployed 6.74 crore in Bimetal, 19.59 crore in Alkop, and 0.58 crore in Brakes. Over the next two years, it plans an additional 25 crore in Bimetal, 7 crore in Alkop, and 2.50 crore in Brakes. The stated strategic intent is to capitalize on growing demand in high-precision bimetal applications, achieve scale economics in Alkop, and support revenue growth in Brakes.

Alongside capex, management emphasized sustainability and cost-saving initiatives. The presentation cited a solar power system of 3,870 kWp with output of about 53,67,828 kWh per year, and other energy efficiency steps such as energy-efficient motors, LED lighting, electric holding furnace, and boilers with pre-heat chambers. The core claim is lower electricity and diesel consumption, improved energy security, and reduced emissions aligned with ESG goals.

Investors should read these actions as margin protection tools. When output scales and capacity rises, utilities and energy efficiency begin to matter more in absolute rupee terms. The presentation positions these initiatives as improving long-term profitability, which is consistent with the FY26 margin expansion trend.

Way forward: EV exposure, export targets, and new approvals

The company’s forward plan is framed around capacity, exports, and entering new segments. On Alkop, it plans 7 crore capex over the next two years focused on machining to match targeted growth. It also noted that commercial production of thrust washers is ongoing with enhanced capacity at a new manufacturing plant.

A notable update is EV-related supply in Alkop, where the company stated it has entered the EV segment for supply of components to Porsche through Eaton. It targets the EV segment to be 8 to 10 percent of Alkop by FY27. The company also referenced Menon Bearing New Ventures, under which it is exploring new opportunities and new tech segments.

Exports are positioned as a continuing growth driver. The presentation states exports are currently about 34 percent of revenue and are projected to reach 37 percent by FY27. It also noted that exports to the USA are expected to increase significantly in Menon Bearing and Menon Alkop, with expected revenue per year around 30 crore. The company plans to enter Africa through a large distributor network.

Another data point investors will track is the pipeline conversion. The company stated that components developed or under development for several clients have received 50 percent approval, with production commenced in Q1 FY26. These components have revenue potential of around 55 crore annually. The key execution question is the pace of approvals and the stability of demand once parts move from sampling to serial production.

What stands out for investors

Menon Bearings delivered FY26 as a step-up year with record revenue, EBITDA, and PAT, and Q4 FY26 as a record quarter with clear operating leverage. The mix remains bimetal-led, but Alkop is being positioned as a faster growth engine backed by part development wins and planned machining investments. Braking systems remains smaller, yet capacity expansion and the Dynamometer-driven approvals roadmap suggest management is trying to build a second leg of growth in railways and OEM channels.

Three themes tie the narrative together. First, export diversification is rising and is now a third of revenue, with a stated path to 37 percent by FY27. Second, capex is being deployed with a clear segment-wise plan, and depreciation and finance cost increases appear to be the natural outcome of that investment cycle. Third, margins improved meaningfully in FY26, supported by cost discipline and structural initiatives like energy efficiency and solar output.

If the company can sustain Alkop order conversion, execute braking approvals after the Dynamometer commissioning, and keep exports compounding without overextending working capital, the FY26 margin and growth profile has a reasonable base to continue. The Q4 FY26 print suggests momentum, but the next phase will be about repeatability and disciplined execution rather than a single record quarter.