Behari Lal Engg. Q1 FY27 Earnings Call — Analysis (NSE: BLEL)
Behari Lal Engineering reports maiden post-IPO Q1FY27 revenue growth of 18% YoY to ₹151.7 Cr with 19.6% EBITDA margin, driven by high-value mix expansion and Unit 3 capex.
Result quality: stable — Steady quarter. Management sentiment: optimistic.
The take
Q1FY27 Revenue from Operations ₹151.7 Cr ( +18.0% YoY ) . New guidance — high-value product revenue share around 70% . New story: Unit 3 Expansion & Import Substitution .
Results
Revenue ₹151.7 Cr (+18% YoY); operating EBITDA ₹27.6 Cr (+20.6% YoY, margin 18.2%); PAT ₹19.2 Cr (+24.5% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue from Operations | ₹151.7 Cr | +18.0% | yoy · Q1FY27 |
| Total Income | ₹153.8 Cr | none · Q1FY27 · Includes ₹2.2 Cr other income | |
| Gross Margin | 48.9% | +146bps | yoy · Q1FY27 |
| Reported EBITDA | ₹29.7 Cr | +23.4% | yoy · Q1FY27 · Includes other income |
| Reported EBITDA Margin | 19.6% | +85bps | yoy · Q1FY27 |
| Operating EBITDA | ₹27.6 Cr | +20.6% | yoy · Q1FY27 · Excludes other income |
| Operating EBITDA Margin | 18.2% | +39bps | yoy · Q1FY27 |
| Profit Before Tax | ₹25.8 Cr | +23.0% | yoy · Q1FY27 |
| Profit After Tax | ₹19.2 Cr | +24.5% | yoy · Q1FY27 |
| PAT Margin | 12.7% | +65bps | yoy · Q1FY27 |
| Sales Volume | 22,095 tons | +13.4% | yoy · Q1FY27 · Includes 6,200 tons job work |
| EBITDA per ton | ₹13,457 | +8.8% | yoy · Q1FY27 · On total volume |
| Revenue per ton (ex-job work) | ₹93,487 | +9.5% | yoy · Q1FY27 · Excludes job work conversion |
| Order Book | ₹162 Cr | point_in_time · Q1FY27 · As of June 30, 2026; 13,138 tons | |
| Net Worth | ₹325 Cr | point_in_time · Q1FY27 · As of June 30, 2026 (pre-IPO) | |
| Gross Borrowing | ₹11 Cr | point_in_time · Q1FY27 · Working capital lines as of June 30, 2026 | |
| Cash and Bank Balances | ₹52 Cr | point_in_time · Q1FY27 · Largely fixed deposits as of June 30, 2026 | |
| Cash Conversion Cycle | 94 days | +1 day | sequential · Q1FY27 · vs 93 days in Q4FY26 |
Guidance
Targeting FY27 capex of ₹80 Cr, Unit 3 commissioning by Q1FY28, and expanding high-value product mix share to ~70%.
What management committed to
- What we are targeting is that we will spend around [INR 80 crores] in capex in the current year [FY27]. — around INR80 crores, FY27
- What we are expecting is that in the first quarter of the next financial year [Q1FY28], we'll be able to commence [Unit 3]. — Q1FY28
- What we are targeting is that in the near future, we'll be able to reach to around [70%] of high-value products. — around 70%, in the near future
- What we expect is, in future also, [operating EBITDA] will grow by [20% to 25%] over the next two to three years. — 20% to 25%, FY29
- From the next financial year [FY28], we are targeting to have good numbers [commercial revenue] from the defense sector. — FY28
- Our intention is to hold the days to the lowest possible, and we estimate that we'll hold it to around [90 to 100 days] [Cash Conversion Cycle]. — around 90 to 100 days, FY27
Key themes
Mix enrichment and Unit 3 expansion
How the narrative shifted
- High-Value Product Mix Enrichment: Prioritizing margin-accretive rolls, engineering castings, and specialty alloy steel over commodity conversion job work to drive gross margin and EBITDA per ton expansion.
- Unit 3 Expansion & Import Substitution: Constructing Unit 3 to add vertical and horizontal centrifugal casting capacity, targeting import substitution for high-end ICDP and HSS mill rolls.
- Capital Allocation & Conservative Leverage: Funding growth primarily via internal accruals and recent IPO proceeds while maintaining high ROCE (>25%) and a near-zero debt profile.
- Thermal Power Sector Equipment Tailwinds: Capitalizing on heavy engineering casting demand driven by India's thermal capacity additions, backed by customer order visibility up to 2035.
- New Vertical Entry in Defense and Aerospace: Securing vendor approvals and prototyping contracts with defense PSUs to capture domestic manufacturing tailwinds.
Operational commentary
- Unit 3 construction is underway for foundry expansion, incorporating both vertical and horizontal centrifugal casting lines to produce import-substitute ICDP and HSS rolls.
- Order book stood at ₹162 Cr (13,138 tonnes), with realization averaging ~₹1.2 lakh/ton, reflecting higher skew towards value-added rolls and castings.
- High-value product share reached 60.4% in Q1FY27 (up from 57.8% in FY26), supported by growth in infrastructure, industrial equipment, and thermal power segments.
- Capacity utilization stood at 90.5% overall (94% in melt shop, 87.5% in rolling mill), driving deliberate capacity additions.
- Completed IPO listing on August 19, 2026, raising ₹93 Cr fresh capital to fund equipment/civil works (₹56 Cr), rooftop solar, debt repayment, and working capital.
- Supplied large 22-23 ton single-piece castings to thermal power OEMs, with customer order visibility extending up to 2035 driven by thermal capacity additions.
- Entered defense and aerospace verticals, supplying prototypes to PSUs including Bharat Dynamics Limited (BDL) and NPCIL.
Analyst Q&A
Q. Drivers of growth given current plant capacity utilization is already at 90-91%.
Growth in the near term is driven by mix optimization (shifting from commodity bars/job work to high-value rolls/castings/specialty alloys) which expands realization and margins, followed by melting and casting capacity additions via Unit 3 next year.
Q. Specific capacity addition numbers and exact capex amount for Unit 3.
Unit 3 shed is under construction and machines are ordered for Q1FY28 commissioning; exact capacity numbers and project-specific capex will be disclosed upon finalization with exchange filings, but overall FY27 capex will be ~₹80 Cr across IPO capex, Unit 3, and solar.
Q. Expected revenue contribution and timeline from defense and aerospace segment.
Prototyping orders and approvals are underway with PSUs like BDL and NPCIL; meaningful revenue ramp-up is expected to kick in from FY28 due to long qualification cycles, though exact mix target is not yet specified.
Q. Competitive entry barriers in ICDP and HSS rolls against existing domestic roll producers.
Long customer relationships (catering to 11.5% of domestic roll demand), proprietary metallurgical insights, full forward integration (melting, centrifugal casting, CNC machining, testing), and established raw material procurement create high entry barriers.
Research and educational content only. Not investment advice.