Premier Explosives Limited (PREMEXPLN) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q3-FI26 conference call hosted by Premier Explosive Ltd. As a reminder, all participant line will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star Please note that this conference is being recorded. I now hand the conference over to Mr. Akhilish Gandhi from Stellar IA. Thank you and over to you, sir.

Hi, Akhilej Gandhi. On behalf of Stellar Investor Relations, welcome you all to the Prema Explosives Quarter 3 and 9-month FY26 earnings conference call. We shall be sharing the key operating and financial highlights for the quarter 3 and 9-months ended on 31st December 2025. Today, we have with us the Senior Management Team of Premier Explosive Ltd., Mr. T.V. Chaudhry Sao. He is a Managing Director, and with him, we also have Mr. Vijay Kumar. He is a Chief Financial Officer. Before we begin, I would like to state that this call may contain some of the forward-looking statements which are completely based upon the company's beliefs, opinions, and expectations as of today. The statements made in today's call are not a guarantee of future performance, And also involve unforeseen risk and uncertainties. The company also undertakes no obligation to update any forward-looking statement to reflect development that occur after the statement is made. Document relating to the company's financial performance, including the investor presentation, have already been uploaded on the stock exchange. I now invite Mr. T. V. Saw to share his initial remarks on the company's performance for the third quarter and nine month ended on 31st December, 2025. Thank you and over to you.

Thank you, Mr. Gandhi. Good morning, everyone. I welcome you. Are you able to hear me?

Yes, we can hear you, sir.

I welcome you to the earnings conference call of Premier Explosives for the third quarter and nine months ended December 31st, 2025. Thank you for joining us. I trust you have reviewed our Q3 and nine month FY26 results along with investor presentation available on the stock exchanges and on our website. Our performance during the quarter reflects disciplined execution Thank you. Thank you. Despite a dynamic operating environment, while certain projects progressed in a phased manner during the year, or manufacturing operations remained stable and efficient, with strong adherence to quality, safety, and delivery commitments. The year-on-year moderation is primarily due to the elevated pace in the corresponding period last year, which included higher dispatches of shafts and flares. Execution timing also influenced comparability. Importantly, the underlying demand environment and operational momentum remain strong, supported by a healthy order book and sustained opportunities across domestic as well as export markets. Our outstanding order book stands at Rs. 1294 crores, representing 3.1 times of financial year 25 revenue and providing strong medium-term visibility. During the quarter, consistent execution strengthened our positioning and enabled us to secure larger and strategically significant contracts from the Ministry of Defense, Domestic Defense, players, and international customers. In October, we secured a major order worth $429 crores from the Ministry of Defense, Government of India, for the supply of shafts and players to the Indian Air Force. This reinforces our leadership in countermeasure systems and reflects continued confidence in our technological capabilities. We also strengthened our order inflow during Q3 of FY26 through contracts from international entities for defense products and commercial explosives, along with additional countermeasure orders on the Ministry of Defense. These projects are progressing across various stages of execution and are expected to support revenue momentum in the coming quarters. Premier occupies its unique strategic position as the only Indian company qualified to manufacture countermeasures. And as a key exporter of fully assembled rocket motors, our portfolio of warheads, mines, and ammunition further strengthens our role in advancing India-side indigenization objectives. With continued policy emphasis on domestic defense manufacturing and import substitution, the structural growth outlook remains strong. Our focus is clear. We will drive execution excellence, deepen technological capabilities, Scale capacity prudently and expand our global presence. We remain confident in our growth trajectory and committed to delivering sustainable value of all stakeholders. Thank you. Now, I request Mr. Vijay Kumar, our CFO, to share the financial performance.

Thank you, sir. Good morning, everyone. The results presentation for the quarter-end December 31st, 2025 has been uploaded on the stock changes and on the company's website. I believe you may have gone through the same. The revenue from operations for Q3-FI26 stands at 81.4 crores. Our operating profit for Q3-FI26 stands at 11.6 crores. The operating margin for the quarter stands at 14.3%. We reported a net profit of six crores. The back margin for the quarter stands at 7.4%. The revenue from operations for nine months, FI26 stands at 299.1 crores. Our operating profits for nine months, FI26 stands at 39.1 crores. The operating margin for the quarter stands at 13.1%. We reported a net profit of 39.2 crores. The fat margin at the quarter stands at 13.1%. The decline is primarily attributable to the high base effect arising from the elevated shafts and plates dispatches in the corresponding period last year, with the execution timing affecting year-on-year comparability. Now, coming to the order book. The company's current order book stands at 1,294.6 crores, out of which the different segment order is a majority of 1,191 crores, which is equal to 92% of the total order book. Explosive segment stands at 51.8 crores, which is equal to 4% of the total order book, and service segment, which is operation and maintenance service segment, stands at 51.8 crores, which is also equal to 4.4% of the total order book. The order book shows a solid and strong growth towards the coming years. We are very much content that with our continued execution run rate in the forthcoming quarters, we will be continuing with the growth trajectory. With this, we will now open the floor for questions and answers. Thank you.

Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. Our first question comes from the line of Neeraj Mansinkha from White Pine Investment Management. Please go ahead.

Sir, thank you for the opportunity. I have only one question. If you see your order book is 1191 crores, which is last quarter, September quarter, 1167 crores. It implies an increase of 85 crores in net orders after adjusting for this. Revenues because revenues reported for the defense is only 61 crores. Now, but when you reported in the press release, we reported an inflow of 519 crores on shafts and flares, the three orders they reported. So what is the discrepancy? Like has the orders off? So the discrepancy You're almost, you should have added. 519 crores, but it seems that you have added 812 crores only. So has the, some orders been cancelled with the extent of 400 plus crores?

No, that 430 crores has come in October. So, in the last call, we have added that also and gave the total number.

Okay, so you, but that was a quarterly presentation.

So you added that in the last quarter, because that time by the time we got the as on that date.

So, so, so whatever orders right now, you're putting the presentation as on. No, it is as on 15 February or so. Is it right? Or is it as on December 7th.

Yeah, as on date.

Okay, okay. Got it. Got it. Yeah, thank you. I'll come back.

Thank you. Our next question comes from the line of Varun Jan from Daulat Capital. Please go ahead.

Yeah, hi. Good morning, sir. So, I have a couple of questions. So, first is, sir, what is the status of this explosive RDX-HMX expansion at Kattapali? So, will it be completed by the end of this financial year, and do we expect like 100 to 200 CR extra revenue from that in FY27?

No, the civil construction and work and all those are completed. The equipment installation and direction is going on. So we expect this to complete and then come into production in the first quarter of next financial year.

And sir, what will be the revenue from this expansion in FY27?

That being the initial few quarters, it will be on lower side because we will be slowly operating it. So, we are expecting almost in the next financial year a contribution of much. The turnover contribution will come to around 150 to 200 crores in the next financial year.

Okay. And, sir, of this shafts and flares order, which we received in October, so, sir, will be how much of that order's contribution will come in FY27?

Yeah, almost 50% of that order has to be executed in one year time. And we have to complete it by next year. That's fine. Thank you.

So, sir, in that case, because of that 430 from that and, you know, 150 from that, so only these two main orders will give you close to 550, 600 crores of revenue in FY27,

if I'm understanding it correctly. Between some in the current financial year and this part, we'll go to the next financial year. It's not the entire order we'll go to the next financial year.

Okay, and sir, on this year, F526, yeah, guidance for 560 CR. We are not able to hear you.

I'm sorry, sir, but your voice is breaking.

Sir, sir, I was saying that last quarter we revised our guidance down to 500 to 550 CR for FY26. Is that number still possible?

Yeah, now the year is coming to closer to end, and we have stocks which need to be inspected and delivered to M.O.D. So, if the inspections are completed and then delivery is completed, yes. If it gets into, then it will go to the next quarter.

Uh, okay, sir.

Okay, that's all. I'll come back in the queue, sir.

Thank you. The next question comes from the line of Hedanshu Bhatia from Sukrit Investment, Private Limited. Please go ahead.

Hello, sir. Thank you for taking my question. My question was that in our second last page of our presentation, we have mentioned anti-personnel and anti-armored vehicle mines as a product offering. So, sir, could you please throw some light on it?

Yeah, we already, we got a supply order, and then we are executing that. We have already done almost 50% of it. Now the balance, now it is in the deliveries and then inspections.

So, sir, is it related to Project Tandov? Because as per reports, the solar industry is developing an anti-tank influence mine. So, sir, how are we lining up against it, sir?

We are working with DRDO technology, anti-tank intelligent mine. DRDO has transferred as technology. We are on that. But that product we are here to get supply order. That's right. DOT is completed. We are waiting for the supply order from Army.

Okay, so because the RFP is out for project TANDAL, so that brings up this question.

No, we are not doing TANDAL. It's here on.

Okay. Thank you.

Our next question come from the line of Paras Kulkarni from Ignite Capital. Please go ahead.

Yeah, so my first question pertains to the order inflow. In the second quarter, we had guided that we would be expecting an additional 300 crore order inflow for the next, for the remaining part of this year. However, when I look at it on a run rate basis, we don't seem to be, you know, in Q3, not even half of that guidance is being met. So could you highlight, you know, what led to the lower order booking in Q3?

What I could do? The order book is, I couldn't understand on what basis you said, the lowering of the order book. As on rate, the order book is 1290 crores.

Yeah.

We got a new order of 430 crores in October. Yeah.

As we keep on executing, from one side, it comes down, and as the new orders get added, it goes up. So we are able to maintain a healthy order book.

No, we are actually operating at less than one build-to-book, as per my understanding.

No, it is 1294, so it means it is two-year starter book.

Okay. Secondly, on the gross margin front, we have had a sequential decline of almost 100-150 bps. So can you put some light on that as to why it has happened and was it on account of some change in revenue mix or input in raw material prices?

Earlier we had this MODE order, where we had LDs and all these things, because of that, that was on the lower side. Otherwise, we are targeting 15-20% EBITDA.

Okay. Good. And lastly on the revenue front, See, to achieve the yearly guidance, we need to, you know, almost do 3x of, 3 to 4x of what we did in Q3, the revenue for Q4. So, do we expect any change in guidance, given that the... Orders which you mentioned are still not getting executed or not getting inspected. So is there any definitive timeline as to the orders getting inspected from the government and getting executed? Because what I understand is your peers have actually had a strong quarter in the defense segment. So could you throw some light on that?

Yeah. See, the third quarter, whatever deliveries have to be made, it has already started, and from the stops, see, the different, multiple processes, any product, before you dispatch, you have to offer for pre-dispatch inspection. So, we have already submitted to them for connecting pre-dispatch inspection. And as per the team arrival and then inspection, it depends. If we can deliver them before 31st of March, they appear in this quarter, otherwise they will go to the next quarter. We are trying our best to get them forward rather than pushing up.

Okay, got it. I'll join back.

Thank you. Our next question comes from the line of Sukhli Thapaklis from EyeSight Pinterest. Please proceed.

Good morning to the team. I have two forward-looking questions. My first question is, as Premier Explosives expand into the defense and aerospace, what steps will you take over the next one to two years or, you know, in the short-term one to two quarters to mitigate risk from defense procurement delays and ensure steady execution in long-cycle contracts? That's my first question. I'll ask my second question after.

Yeah, this is, see, as we explained earlier also, we are building our, we have bouquet of products, and we are increasing the bouquet, adding more products, like we added, or a few years back, if you remember, we were, our concentration was producing propellants and then rocket motors for Indian agencies, and they are devoured. Today, we are already exporting rocket motors. And we are designing and all those. Next step we added is the countermeasures. Countermeasures, we are the number one in the country. We are the only source for countermeasures. Whatever orders are, we are executing from that. The third one is the mines. We have started delivering in this financial year, the mines, land mines, and anti-personal mines. We are on the armored vehicle mines and all those. We have to start delivering. Anti-personal mines, we are already delivering. Then the next step comes is the ammunition. Ammunition, yes, we have conducted trials with ARBE technology and all those. Again, it is in the process of RFPs. Once we get into it, we will be entering the complete medium caliber. Ammunition line of business. So we are going on adding, within the defense and aerospace industry, there are multiple products. We are going on adding one after the other, and we are also expanding our capacity of producing tactical rocket motors by adding another facility.

Thank you. My second question to Mr. Kumar is, looking ahead, how will you design Premier's financial discipline to handle raw material cost volatility and working capital tied to defense contracts while still protecting margins and delivering a predictable shareholder return?

Actually, we have lines of credit from all the banks, so we do not foresee any working application issue. So, depending on the product and project, we plan working application accordingly. And also, the margins are also protected when we accept the order.

And we, every export order we execute or we take, we are including a line. Price escalation class from year on year, so that the price increase in the raw materials is protected.

Thank you, and best wishes.

Thank you. Thank you. Our next question comes from the line of SC Gupta from an individual investor. Please go ahead.

Good morning. I would like to know what is the breakup of exports and domestic sales in the current quarter and nine months?

Inverse export is about 40 crores, compared to total year exports of about 78 crores.

And current quarter?

Current quarter, 40. And previous quarter, third, in December quarter.

And what is the breakup of export and domestic orders,

as on date?

Export is about 450 crores. Balance is domestic.

Balance is domestic. You see, all the export orders which you have given on BSC normally mention supply period of 12 months, maximum 12 months.

Yeah, 12 to 24 months, some of them.

Okay, because what I observed is most of them are within 12 months. So in that case, if you have to deliver this in 12 months, so current year, you will be exporting at least 400 crores next year. That is 26, 27.

Here, you have to note one thing. All these exports need export licenses for this.

Correct.

Yeah, so the date, the clock starts from the day of receiving the export license.

Okay, it is not from the date of order. It is from the date of receiving the export license.

Yeah, because they all know. We tell them in the beginning itself. We can supply only once we get the export license, which takes anything between three to five months.

Okay, may I know as on today how much export license we have to export?

They are in different stages. Maybe in the next call, we can update it.

So normally, can we expect that these 450 will be executed maximum within one and a half year to two years?

Yeah, that assumption we can take.

That assumption may be okay. And secondly, with respect to the turnover, we started the year guidance of 600 crores. Now, then we have come to guidance of 500 to 550 in the last quarter. And now also, this 500 to 550 also looks a little bit shaky, depending upon the inspections. But does this inspection delay somewhere end? What I'm trying to say is that the previous inspection gets delayed and it transforms to next quarter. So it becomes a normal lead time in delivering the order. So considering that, are we sure that this year we will be able to achieve at least around 550?

We are targeting 500 crores, because you know that we had an accident in the beginning of the year, because of which our large rocket motors facility got affected. So that time it will be told around 20 to 30 crores business will be affected at that time. Yeah, and also you know the geopolitical conditions. Yeah, because of that, some of the inputs which you are importing got delayed.

Okay.

So, these have affected our targets and that's what happened. So, we are hoping that right now, current year or coming year, I think that the problems are not foreseen. So, we are hoping that we will cover up that.

We will achieve that. And secondly, are we expecting any LD on this?

Yeah, the ND clauses are there, but when we submit, we tell all the reasons for this. Yeah. In many cases, they have considered waiver of LD. So any settings also there, we are approaching them.

And one final question. Can we assume that next year we can achieve a turnover of 700 to 800 crores because of these delays, whichever is postponed in the current year?

Yeah, because of our experience on the current year, we are a little cautious in taking that run. We are expecting 500 to 600 crores turnover next year.

That is a conservative estimate as on date, based on the experience. Thank you. Thanks a lot.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and 1. Our next question comes from the line of Neeraj Mansink, a follow-up question from White Pine Investment Management. Please go ahead.

I want to tell you, we are present in the QRSAM, and so what is the general... Percentage share of QRSAM orders that we should receive?

The QRSAM order is yet to be received. We are also hearing about QRSAM, but right now, we have no order on QRSAM. If any order comes, we are the supplier. The propellant needs to be supplied by only 3 years.

So that I understand that, say, whatever is the percentage the main supplier regains. How much percentage of that would you be getting generally on a range that you can give us?

I told you earlier, Karl Karlsruhe, it is somewhere around 10 to 15 percent is the percentage contribution of propellants by else and other explosives. It varies but from motors to motors.

Are you supplying full rocket motors or only the propellants for three years?

Only propellant casting.

Only the propellant, not full motor?

Yeah, not full motor. Full motor is being assembled by VDL. VDL places other on us for propellant. We supply them with propellant cast, then they do the full motor assembly and integration.

Got it, sir. So that's one. So second question is on the countermeasure orders that we received earlier. Which is in 2023 July. So, how much is left on that part, in terms of un-executed portion?

Around 110 crores is left out. And completed the shaft part of it.

Some quantity of milk is left over, that is around 120 crores, which we are hoping that in the first quarter we will complete that.

And the order which is yet to be checked and booked on revenues, are they included in that 110 crores includes that or excludes that?

No, 110 crores is whatever we have delivered. What is in our magazines and stocks are not in that, that is additional, which we are thinking that in the next month or in the first quarter of the next year, we will be able to execute it.

And sir, how much of the stock which is yet to be pending to be verified by the defense side?

Around 30 crores. Around 30 crores worth material is with us as on date.

So, is it right that then the count and measure revenues to be booked on the earlier order is 140 crores, 110 is yet to be executed?

As on date, outstanding is about 110 crores, 112.

That includes these stocks also?

Everything, all inclusive, yeah.

Okay, got it, sir. So, that's one. And, sir, on the LD numbers of countermeasures, you said that in the past that the reversal of margins can come after only you supply the entire order. So, what is the status of that?

Like we told now, only the flare part, 30 crores, sorry, 60 crores of flare part is to be supplied. And counter with this shafts, we have already approached M.O.D. for considering error of L.D. And flares we will approach once we complete this.

So you have approached for the shafts, but the precision is yet to be sealed. Is it the right way to look?

The government has to go from various levels, so it will take some time.

Okay. Okay, got it. That's the third. So third, can you tell us something about the RFP on the mine site?

RFP on mines. We have an order in our hands. We are supplying, exhibiting the order. It's no more in RFP stage. Other mines, yes, the anti-armored vehicle, intelligent mines, which are there in the, and we are waiting for the RFP to come.

How large, sir, they can be, the value?

Mines. We have to supply around 30 crores of mine. Future, you are asking?

No, sir, I am asking of the upcoming mines that are going to come, how large can those mine RSTs become?

It is going to be large from our estimate, but I can't tell you the figures because mines are needed by the army all along our border. When there are tensions, they have to plant. So, right now, the demand will remain continuously for the antipersonal and also for anti-armonautism.

Okay. Okay. So, great. Thank you. I'll come back.

Thank you. Our next question comes from the line of Varun Jain from Dorot Capital. Please go ahead.

Yeah, just a follow-up. Sir, what is your CAPEX guidance for FY27 next year and FY28?

That's the next financial year. Yeah, next year and next to next year. Yeah, around 60 crores is CapEx. Exactly.

PDK and next year.

Yeah, it's CarTapoli and PDK together.

And sir, any update on the Orisa CapEx? Since we have a board permission to raise funds, what is the status there?

Orissa land is still not finalized because we happened to go and then see and look for the land. So it's more of hilly and forest and all those. In the meantime, the Andhra government has cleared our application for land in Andhra. So that appears to be more closer than Orissa. The proletariat has to be done. So that also will add to our capex plan once the land is allotted to us.

And so, sir, this 60 crores, which you said, for SI27, what is the breakup of that?

We have expansion plan in the Kartapalli plant and also at Gidike plant. Additional capacity of co-plant manufacturing and casting and also integration of rocket motor integration. So all those areas and also for RDX and HMX plant. So all these activities, we are expecting a 60% of capex in the current financial year.

Sir, for this RDX and HMS capacity, I think the current round of CapEx, you are taking it from 100 times to 600 or so. So beyond that also you are taking in FI27, if my numbers are correct.

Yeah, CapEx-wise, I don't think we will do in FI27. That will be finishing in the current year and probably year FI26, first quarter or two. So, after that, I think we will be full. There will be no possibility of adding anything because of the land constraint. So, we have to go to the new place.

Okay. And, sir, any, like, Apex plans for FY28 have you chocked out or not yet?

No, not yet. We have plans, but I don't think... The land is alerted. Yeah, once the land is alerted, we'll... Otherwise, now we are at the stage of project report submission for allocation of land and other things.

Okay, okay, sir. And it's my last question is that, sir, for FY27, I think your majority of revenue will come from one, the chefs and players orders, and secondly, the HMX and RDX sales, which will be 150 crores or so. So next year, the EBITDA margin, console EBITDA margin should be close to 20, 21, 22% in that range, right?

Now, that also is there and we have other products also. So it can be anywhere between the 15 to 20 percent based on the product mix what we supply.

And because majority of it will be coming from these products, and they are very, you know, higher margin products, and especially with RDX and HMX, they have a very high realization presently. So that's why I was asking that. It should be on the higher side, right?

We are hoping that it will be higher side. We are also hoping that based on the present orders and also, yeah, product mix.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on your test on telephone. Our next question comes from the line of Deepak, Carva, an individual investor. Please go ahead.

Hello. Yes, please. I'm all right, sir. Yeah. Thank you for the opportunity, sir. My first question is regarding our cash conversion cycle has improved significantly over 300 days in past few years to around 90 days currently. Like going forward on a sustainable basis, where do you expect the cash conversion cycle to stabilize? We are trying to maintain this.

Actually, that depends on the product. If you go with the Ministry of Defense and other things, that takes a little time to get the funds. So, the rest of the people, we have a fixed timeline. So, anyway, we are trying to maintain the same.

Okay. And, like, additionally, on the working capital side, how much working capital would be required to execute the current order book of approximately 1,300 crores?

We have sufficient working capital lines. A lot of banks are ready to give further working capital also. So, on the need basis, we are taking it. That's why our finance cost is also lower. Wherever it is required, we are taking it. Otherwise, we are utilizing it from the advances from the customers and others. Okay.

And are we expecting any sustainable order for bulk explosives? Any order we are expecting to receive from whole India?

Coal India, the prices are so low, so unless we get our price, or a reasonable price, which at least breaks even, we are not entering into that. So right now, we are not supplying any bulk explosives to Coal India. Some accessories are being supplied. We are right now servicing Singarini callways in two mines with the bulk explosives and all those. Coal India plants are understood now.

Okay, sir. Understood, sir. Thank you, sir. All the best for the call. Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1 on your touchdown telephone. As there are no further questions from the participant, I would like to hand the conference over to Mr. T.B. Chaudhary for the closing comments. Thank you and over to you, sir.

Thank you very much, Mr. Gandhi. Thank you very much, all of you, for supporting us time to time. This conference call could not be conducted immediately after the board meeting with us. I was travelling for land and other things to Andhra government. So we will inform all of you whenever the land allotment is completed. Thank you. Thank you.

Thank you so much, sir. Ladies and gentlemen, on behalf of Tremere Explosive Limited that concludes this conference. Thank you for joining us and you may now disconnect your line.