Strong execution masks temporary margin drivers; US scaffolding sustains 2 quarters

Steel scaffolding ₹240 Cr; total revenue ₹805 Cr (+27.2% YoY)

Highest margin ever for segment; driven by volume growth + rupee depreciation

Running 100% since March; contributed to EBIT improvement

Segment growing but specific growth % not broken in results; US market strength confirmed on call

₹20 Cr orders; approved by DRDO and Israeli sensor company; margin ~15%

Prior guidance mentioned rebound; delivered 27% revenue growth YoY driven by AI chip/semicon/energy CAPEX projects with sustainable long-term visibility

Guidance: 30% baseline sustainable. Delivered: 43% EBIT (highest ever). Driver: volume growth + rupee depreciation benefit (not operational excellence)

Running 100% capacity since March; materially contributed EBIT improvement via price navigation benefit vs prior guidance of capacity ramp

JT Cooler fully approved by DRDO + Israeli OEM; received ₹20 Cr orders. Not in prior guidance; small but strategic

Target 30% sustainable. 43% benefited from volume growth + rupee depreciation. Geopolitical volatility (war, tariffs, freight) ongoing; not confident claiming new normal.

Strong US demand since January; driven by AI chip, semicon, energy CAPEX. Long-term projects, good pipeline. Sustainable near-term; difficult beyond 2 quarters due to volatility.

Plant at 100% capacity since March; no new volume. But large aluminum price increase helped EBIT via cost navigation. Improved bottomline segment-wise.

US market strong across verticals (machinery, transportation, plant engineering). AI transformation + capabilities in AI vision, embedded systems, manufacturing automation. Good prospects.

Formwork has 3-5 months order book. Scaffolding and drum closure mostly order-to-order. Not order-book-heavy business.

Difficult to give long-term guidance. Different products, capital items. Focus on execution. No range provided.

Closely studying options. Good infrastructure in Mumbai and China. Can add capacity within 3 months if needed.

Fully developed, not trial. Approved by DRDO and Israeli sensor company. Crossed all approval levels. 100% operationally successful.

50% tariff (section 232); China pays 75% (+25%). We have 25% advantage. But China has 20% steel cost advantage; net, we 5% higher cost. Not price-based competition; inventory, components, relationships key.

Defense order-driven, not proactive. JT Cooler and canisters are DRDO/vendor-initiated. Can't tell defense department we have capability; they give us work. Order book-dependent, difficult to estimate.

14%-15% guidance assumes continuous investment. Must invest in tech given fast change. That guidance incorporates investment cost.

Management declined to give multi-year guidance, citing cyclical nature of scaffolding capital goods business. Different segments have different drivers.

US long-term CAPEX projects (AI, semicon, energy). Pipeline strong. Cannot project beyond 2 quarters due to volatility.

Repeated multiple times. Current drum closure 43% acknowledged as above-baseline due to rupee + prices. Engineering Services 15% margin target incorporates continuous tech investment.

Management explicit: 30% is sustainable baseline. 43% benefited from rupee depreciation and commodity tailwinds. Geopolitical/macro volatility remains risk.

CSN plant completed in FY24-25, now operational. Phase 2 planned for FY28 with extrusion plant expansion and forward integration.

Drum closure 43% margin dependent on weak rupee; aluminum extrusion EBIT boost tied to high prices. Both could reverse, compressing margins toward 30% baseline.

Middle East scaffolding sales (<5%) affected by current war; Europe still reeling from Russia-Ukraine impact. US tariff environment (50%, could change) affects scaffolding competitiveness.

Management can only project scaffolding demand 2 quarters ahead despite long-term CAPEX project claims. US AI infrastructure boom may peak or slow.

Plant at 100% capacity; EBIT improvement from high aluminum prices. If prices fall or volume drops, EBIT contribution evaporates. Mach One volume YoY decline despite capacity expansion.

JT Cooler order book only ₹20 Cr (~2% of revenue). Defense procurement slow and order-dependent; not a scale business yet. Canister business at early stage.