MMP Industries Limited (MMP) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to MMP Industries Ltd. Q2 and H1FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-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 then zero on your touchstone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Akhileesh Gandhi from Stellar Investor Relations. Thank you, and over to you, Mr. Gandhi.

Thank you, Nazanin. Good afternoon, everyone. I, Akhileesh Gandhi, on behalf of Stellar Investor Relations, welcome you all to MMP Industries, Q2, and H1FI27 Earnings Conference Call. We shall be sharing the key operating and financial highlights for the second quarter and half-year ended on September 30, 2026. Today, we have with us the management team of MMP Industries. Mainly, we have Mr. Arunji Bhandari. He is our managing director. With him, we have Mr. Mayangji Bhandari. He is our director. And along with them, we also have Mr. Sarajji Khandelwal. He is our chief financial officer. But 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 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 statements to reflect developments that occur after the statement is made. Documents relating to the company's financial performance, including the investor presentation, have also been uploaded in the stock exchange. With that, I now invite Mr. Arunji Bhandari to state his opening remarks on the company's performance for the second quarter. And after that, once the opening remarks are completed, we'll open the floor for Q&A session. Thank you, and over to you, sir.

Thank you, Akhilesh. Thank you very much for arranging this earnings call on behalf of M&P Industries Limited, the Q2, as well as the FY27 earnings conference call. Good afternoon, everyone. Welcome to this earnings call. We are pleased to connect with analysts today of our business performance, key operational developments, and growth priorities, following which our CFO, Mr. Sharad Khandelwal, will take you through the financial performance. Over the last four decades, MMPIL has evolved from an aluminum powder manufacturer into a diversified business, spanning aluminum powders, aluminum foils, conductors, and cables. We are now diversifying into polymer insulation. Our focus remains on strengthening our core businesses, increasing value addition, and expanding our presence across the industrial and power transport. FY27 has been encouraging, with strong performance across our core businesses, supported by healthy demand, robust export, plant utilization. Beginning with aluminum powders, we witnessed strong performance during H1 FY27, supported by healthy domestic demand, robust exports, successfully executed export orders at a very high scale, despite the quarter traditionally witnessing seasonal moderation in business activity.

Thank you. This performance was supported by a robust export and improved plant utilization, despite a fluctuated metal political situation, margin-moderated percent in Q2 FY27, primarily decision-related losses. This quarter also included a combined EBITDA loss of approximately 1.5% from the two of our wholly owned subsidiaries, which are in the initial stages of operation. And apart from that, there is an incremental sales from the coil business, which was a low margin as compared to our core business. Despite this pressure, our Y&B profitability improved, reflecting the underlying strength of our core business. On the cash flow front, we generated positive operating cash flow of approximately 22.8 crores during H1FY27, while continuing to invest in our expansion initiatives. Moving to the segmental performance, I will briefly highlight the revenue trend across our key businesses. Starting with aluminum powder, revenue is due at 315 crores in H1 FY27, registering a growth of 41% Y&Y. For Q2 FY27, the revenue grew by 37% Y&Y to 161 crores, supported by a healthy domestic demand and strong export performance. According to aluminium foil, revenue increased by 38% Y&Y to 135 crores in H1 FY27. Q2 FY27 revenue grew by 47% Y&Y to 75 crores, driven by sustained demand across bare and printed coils. According to conductors and cables, the revenue stood at 33 crores in H1 FY27, reflecting a decline of 32% Y&Y. Due to FY27, revenue stood at 16 crores, down 16% Y&Y, primarily due to the monsoon-related slowdown in project execution. As mentioned earlier, we anticipate the recovery in H2 FY27. For polymer insulator, the business recorded revenue of approximately 1.1 crore in H1 FY27, with Q2 FY27 contributing around 61 lakhs. The business remains in its initial stages, with future growth expected as customer approval and order execution progress. Turning to our associate company, StarCirclips and Engineering Limited recorded revenue of Rs. 60.5 crores and PAT of 10 crore in Q2 April 27, supported by higher sales volume and improved operating efficiency. Similarly, OLMMP India Private Limited recorded revenue of Rs. 23.1 crores and PAT of 0.4 crores during this quarter. Both companies continue to strengthen our diversified business portfolio with their contributions reflected through our share of profit from associates. H1 FY27 reflects strong revenue growth, improved Y&Y operating profitability, and continued investment in our future growth platforms. Looking ahead, our focus remains on sustaining business momentum, improving product mix, maintaining cost discipline, and gradually scaling up our new businesses. With this, we conclude our prepared remarks and would now like to open the floor for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone 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, we will wait for a moment while the question queue assembles. The first question is from the line of Varun Shivram from Choice Equities. Please go ahead.

Hi, sir. I hope I'm audible.

Yeah, please.

Yeah, so firstly, congratulations on achieving the record quarterly and quarterly performance, particularly as H1 is a traditionally weaker career for us. We have done well. So what's encouraging is that the new businesses are yet to contribute to us meaningfully, right? So what kind of momentum can we expect from these new businesses? So we have multiple expansions, which it is underway. I just wanted to understand if you can quantify what is the meaningful acceleration and growth we can see from these new capacities.

There was a very unclear why. Can you please repeat your question in brief? Because there is a lot of echo.

Sir, is it better now? I'm sorry for that. Is it clearer now? Yeah. So basically, sir, I just wanted to understand from the new businesses front, we have a lot of expansion initiatives underway. They're also looking to add capacity. So when will they start contributing to our growth? What kind of growth can we see from these new initiatives like to be quantified? That might help a lot. Thank you. That's the first question.

We are investing in the polyinsulator business, then cable and conductor business like LD cable and wire rod business. So wire broad business has already been, we have given in our press release that it is in advanced stage of completion, and it will start contributing from the Q1 of 5528, and polymer insulators, the facility is already ready, and we are approving, waiting for the approvals from the power grids, And the meaningful contribution will start from the Q1 of next year.

Understood. And sir, when will these capacities, do you expect them to be optimally utilized at what level, sir?

Yeah, so for polymer insulator from QH2 of the FA28, we anticipate that it will be optimum, there will be optimum utilization of the polymer insulator facility. And for LT-Cable business, the small capacity which we have set up in our existing plant at Bandara, that is already started. And we anticipate that from Q4 of this year, this will start giving a meaningful revenue. And the bigger capacity of this LT cable, because the construction and the major machinery has already been ordered, so we anticipate that this trial and everything will be completed in Q4 FY28, and this will start giving meaningful revenue from the...

That's quite encouraging. So, one of the businesses, if I want to deep dive a little bit, would be polymer insulators. So, the broader industry in India is planning over 9 lakh crore of capex in transmission infrastructure by 2032. And currently, 1.9 lakh km of transmission lines are in plan. So, what kind of opportunity are we seeing in this entire transformation of the equipment and especially transmission? And one more question would be that our PG-CIL factory inspection has been completed. So when can we expect some final approval? And then from there, the revenues will start coming is what I expect. So when are we going to see that happening?

Mike, would you like to take that?

I'll take that. So, you know, the factory inspection and the audit formalities have been complete. And we are expecting the approval from PGCIL, you know, hopefully quite soon. But to give an exact date will not be correct from my part because, you know, these things do take their own time. And, you know, finally, you're dealing with a very large body. But everything is on track and if all goes well, we should have the approval quite soon. Very shortly, I would say.

Understood. My last question would be on polymer insulators only. Again, could this be the major growth multiplier for MMP over the next 2-3 years? How are we seeing this business individually? And what kind of margins can we expect at this peak, if you can share something on that?

Yeah, so see, the thing is, it will contribute very meaningfully to the margin expansion of MMP. It is a business that will ramp up gradually because, you know, these insulators are very niche products and you know, to master the quality will take some time. It will contribute very meaningfully to the margin development and the margin profile of the company. And we are expecting a margin of anywhere between 18 to 20% on EBITDA level on this.

Understood, sir. So basically, a consult company should reach a double digit margin if this scales up to a certain amount, right?

Absolutely, you're correct. Absolutely, you're correct.

Understood, sir. I think this answers most of my questions. So thank you for all your detailed answers and all the best.

Thank you.

Thank you. Next question is from the line of Harunit Kapoor from Equitry Capital. Please go ahead.

Yeah, yeah. Very well. Yeah. So my question is regarding your given your strong revenue growth. Can you quantify the volume growth for each segment this quarter?

Why on why basis, the powder remains a slight kind of revenue growth on a volume basis. So, the powder grew by 2% on volume, and foil around 14%, and conductor was down by 33%. Why on why basis?

The question is now, I think foil has almost reached its optimum, sorry, the powder has reached its optimum utilization level. So, are we planning any capex on that front?

So, let me take this, Rune. We are immediately not planning any capex in the powder division. What we are looking at is export substitution. We want to meaningfully increase our exports, which I believe we are on the right track for, where realizations and margins are better. So, our primary objective right now is to, you know, go for the exports and with the redevelopment of the Middle East, there lies a very, very huge opportunity to increase our exports meaningfully, even from this level. So, that is one opportunity that we are very keenly, you know, watching and waiting for. Once the reconstruction of the Middle East starts, I think that will offer a tremendous opportunity, especially for AAC powders. Yes, yes, Europe is always there. Europe, we are already seeing good signs. We have added A few very good customers, and that will keep on happening, and our strategy remains that, you know, basically diversify a lot more into exports, in the powder segment.

And are we also looking at any additionalities, like in the powder segment, like are we looking into aluminum additive manufacturing or any other niche areas or something?

No, nothing of that's not right now. Nothing of that's not right now.

Okay, and my last question is regarding your solar project, like renewable energy, so approximately could you quantify the power savings would be annually?

See, we can, you know, per unit, we should be able to save about 3 to 3.5 rupees, unit for unit if you are saying, because we are yet to see what the generation is in terms of units, but I can give you that we'll be able to save about 3.5 rupees per unit from our existing cost.

And how much would that improve the EBITDA margin? Any back-calculation on that?

That will be difficult to answer right now, but let's connect offline and we can let you know about that.

Okay, thank you. That's it from my side. All the best. Yeah, thank you.

Thank you. Next question is from the line of Akshet Shetty from Research Analyst Family Office. Please go ahead.

Hello. Am I audible? Yeah. So, good afternoon, sir, and thank you for taking my question. So, my first question is on the power and foil growth. Aluminium powder revenue grew 41% and foil revenue 38% in first half of 27 compared to the first half of 26. So, could you share the actual sales volume in terms for both the segments during this period? This would help us to understand how much growth came from the volumes versus high aluminum prices. Also, I see you mentioned an inventory gain of 2.5 crores in Q26. So, could you quantify the inventory valuation loss in second quarter of FY27 and the potential exposure in Q27, given the recent fall in aluminum prices?

Yeah, in Q2, the approximate inventory valuation related losses is around 2.5 crores, and so far as your volume in, so this can be given to you on mail or separately, because there are a lot of segments, like powder may be baas pare segments, or fit and foil, Rolling, conversion, and printing, so we can give you separately. But so far as the volume growth, I am telling you, earlier I have mentioned that the Y on Y basis, we have a volume growth of 2% in powder division, and in foil division, it was around 14%, and then conductor was minus 33%, and on Q basis, the powder grew by 8% on volume growth basis, and foil 30%.

Okay, got it. And one more. Lastly, in May, 2026 earning call, you guided that F527 EBITDA, 2BRM means 37,000 to 42,000 per tonne for powder and 12 to 15,000 for foil. So what were the actual EBITDA per tonne figures for both the segment in first half of 27?

Line with whatever guidance we have given, and on full year basis, it will remain on those lines, but subject to any gain or losses because of that only. Otherwise, it is in line.

Okay, so you mentioned it will be in line only what you mentioned previously, in the last year.

Yes. Hello.

Yeah, I have one more question on polymer insulator. So, in May 2026, you guided that for FY27 revenue of 18 to 20 crores with major approval expected in second quarter of FY27. Do you still maintain this guidance? Also, what is the current confirmed order book separately for domestic and export market? And what is the status of the power grid approval?

So, right now, the power grid approval is awaited. All the audit formalities for power grid and a few other electricity boards have been completed and we are awaiting approvals. So, once the approvals come, we expect meaningful orders and then, you know, the business will ramp up fairly significantly, we feel, from December onwards. So, 8 into 20 crores at this stage looks a little difficult to achieve, but, you know, it is all subject to our approvals, how quickly the approvals come, and then, you know, we can give a firmer number. And right now, you know, we have an order from Latin America. Apart from that, domestically, there is no order book per se because we have not yet ventured into the transmission sector. So, right now, it is at a very nascent stage.

Okay, one final question, regarding this STADS share clips, so it is setting up a forging facility to supply and fitting to MMP Electrical, so could you briefly explain how the transfer pricing will determine and how the economy of this arrangement will be shared between STADS share clips and MMP shareholders?

So, it will be basically or totally buyer-seller relationship. There will be no special transfer pricing or anything of that sort. The idea for this is to have good quality control and, you know, keep it because end fittings play a very, very large, very important part in determining the quality of the insulators. So, the idea is to keep the quality in check and control, full control over quality. But it will be a pure buyer-seller relationship.

Okay, okay. Got it, got it. And thank you for giving Taraud means answer to all my questions. Thank you very much. Thank you.

A reminder to all the participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. Next question is from the line of Simmel, an individual investor. Please go ahead.

Thank you for taking off my call. I hope I'm audible.

Yeah, please go ahead. Yeah.

So, my first question, sir, most of my questions regarding the polymer business have been answered by you. My question is regarding the powder business. So, we've seen an unprecedented scale of powder exports during this particular quarter. So, how repeatable is this business and how concentrated was the export for the flow?

Yes. So, see, this quarter, we have done exports of around 13 crores, as compared to 5.53 crores in Q1 of FY27, and 4.48 crores in Q2 of FY26. So, on half yearly basis, we have just doubled our exports in this half year as compared to the corresponding half year. And going forward, we all expect that it will grow very good visibility of the exports because of lot of enquiries from the Europe and South Africa. So, we anticipate a very good momentum in the export business going forward. And our focus will remain to grow our export business.

And to add to your question, the skew, so we are seeing business from Europe, Africa, South America, and Southeast Asia. So, you know, basically every geography has been more or less covered. So, the demand is coming in from all sides. And we expect it to sustain, we expect it to sustain in the coming year or two at least, for sure.

So there hasn't been any concentration on one particular geography?

No, no, no, no, no. So it is coming from South America, it is coming from Europe, it is coming from Middle East, it is coming from Southeast Asia.

Understood, understood.

And you can add about the orders from AVL which are now, I mean Depart, will now go through in this year.

Yes, yes. That AVL is always there. We have that collaboration. So, you know, a lot of their honours were deferred from Europe, but that will now go through now, immediately.

So, my second question, so correct me if I'm wrong. So, I believe our company really holds right now 70% share in the explorers market, 60-65% in the AAC, and the 50% out in the aluminum phosphide. How sensible do you think is our market share versus the likes of Nebco? Would you say that the customization is?

So, the thing is that 70% in explosive was a figure from a, you know, long way, like, you know, few, a year or two back. So, right now, I would not put it at 70% the explosive share. That is, I would say somewhere around, say, maybe 60%. AAC is our main segment where we have a good barrier of entry where it's not easy to penetrate that market because of the customization and the wide range of grades that we have. So, AAC, definitely, we are the leading player and we are hoping to add further market share to our domestic supplies. So, going ahead, I think AAC will be a very important segment for us domestically as well.

Sure. So, 60-60% would be that ballpark figure that you will be able to maintain going forward?

Yes, yes, yes. For the AAC, and hopefully we are trying to increase that. We will be increasing that.

Sure, sure. Thanks a lot, sir. Thanks a lot. All the best. Thank you. Bye.

Thank you. Next question is from the line of Prashant, an individual investor. Please go ahead.

Thank you for the opportunity, sir, and congrats on good set of numbers. Sir, my question is about this leading coil. How much is the peak revenue potential from this leading coil business?

What was the question, please?

How much is the peak revenue potential from this leading coil business?

Yes, sir, we have only one line installed right now. The ramp-up will begin as soon as the season begins in December or beginning January. And if we work only at 75% of our capacity, the peak revenue for the year would be around 9 to 11 crores.

And sir, this should be easy to scale up if the product finds an interaction, then it will be easy to scale up to set up additional machines only, right?

Yes, it is. Actually, our utilities and infrastructure is ready for a second line, as in when we need the new line in place, it will take us four months.

Sir, now our oil business is doing really good. Are we consuming the entire capacity of the rolling mill, or do we still have some spare capacity of the rolling mill?

Rolling mill is 80% occupied, 70 to 80%. There is spare capacity. What we are aiming for is to go for value addition, more printed, more leading coil, and there are a couple of other projects which are downstream projects for aluminum foil, which we are studying and evaluating.

So, sir, if we are sending 11 to 12 carouds of leading coil, then the rolling mill capacity will reach maybe 90-95% once this product gets commercialized. So, isn't it necessary to expand the rolling mill capacity maybe next year or something like that?

Right now, we are not thinking of that. I think we need to be very, very efficient in whatever we do. We must do much more to fill our conversion capacity, which is presently filled to around 60%. So, a lot of the rolling mill stuff will still be transferred to the conversion section in the coming year. And any further plans, I think we will only be making for F529.

Okay, okay. Sir, my next question is about our corporate structure. We have one listed company and two associates. One is Stars or Clips. So, is there any plan to bring Stars or Clips under MMP, maybe by acquisition of Kardar's sake, maybe more than 50% or maybe merger of these two companies? Because these two businesses, one private and one listed, this is little bit like the big players are, this is not good structure for the big institutional investors.

So, I'll take that question. Prashanji, we have explored all possibilities. We have studied this in detail and there is no possibility of merging star-circlips or bringing it under the umbrella of MMP. As you know, it will be too complex. It is an age-old structure where MMP held 26% in star and I think that will remain. So, there is no question of any merging or buying out of star-circlips by MMP.

Okay, okay. That answers my question. Thank you very much, sir, and good luck.

Thank you. Next question is from the line of Dilip Kumar Sahu, an individual investor. Please go ahead.

Yeah, good afternoon to you all. I'm very happy to give all your access to the team at AMG. My question is regarding the insulator business, you know, following all the electrical, you know, transmission distribution equipment companies, I understand that there is equally large opportunity for insulators in equipment business, particularly transformers, reactors, and switch gears, et cetera, which goes as a bushing into those insulators. Are we, you know, I understand we are talking to, you know, PowerGrade and Padani and Sterlite, so the world was basically a transition guide. Is there an initiative to look at the other side of the business, and how does porcelain compete with us in that segment, the instrument in CO2 business?

Thank you.

So, Dilip Ji, yes, you are very right that there is a huge potential in the other segment also, the equipment segment like transformers and bushings and all. But right now, our focus remains to first get entrenched in the transmission business because that's where the biggest value add is. Our focus will remain to sell as much as possible of 400 kV and 765 kV of insulators. That is our first target, that, you know, we establish our brand in terms of quality with 400 and 765, because these are the insulators that are the most in demand and that are the most difficult to make. So, our first priority remains that, but that said, we are also exploring, you know, the other equipment side as well. With regards to, now, your second question regarding porcelain. So, you know, porcelain insulators in the transmission I can talk about, I'm not sure about the equipment site, are, you know, definitely porcelain is now getting more and more difficult to use. There are, it gets damaged very easily, it does not perform well in polluted and salty areas. So people do prefer these composite insulators because of their lightweight, hydrophobic nature. And, you know, they are damage proof in a way that, you know, if you throw a stone or something like at it, it won't break. So, and another factor is because of the weight of the ceramic insulators, The towers have to be designed, you know, very heavily in such a way that they consume a lot more steel. So, here it helps in design efficiencies also, the reduced weight of the composite insulators.

Understood. What I was also keen to know, Nanji, is, you know, is it the accessibility of a porcelain versus a composite? Is there any difference, particularly at a high level, like 765 KV or something like that, is there a differentiator between porcelain and composite?

I would not say there is a very big difference in the performance per se. It is just the other factors that, you know, which make a composite insulator much more attractive, including transport, the lightweight, ease of installation, And, you know, their better performance in polluted and areas with high salt in the, you know, atmosphere, like the seaside areas and all. Definitely in those areas, the composite does perform much better than the ceramic ones.

Sure, sure. My second question, again, on the utility, is, like, you know, if we want to really see a, you know, production-ready and field-tested product, We have to sell in volumes. That will take us to places and environments which are varied. Now, you know, when will, you know, the proof of the pudding that we are as good as the guys like the builders of the world, when will that, you know, I mean, if we sell one crore, two crore kind of product, we obviously, the data will not be sufficient, right? How do you ensure that we are as good as an Elytra or somebody else? How do you really enforce quality now at a small scale?

So at a small scale, see, right now there are two things, Mr. Sao, that we have gone in for complete integration of our facility, that, you know, we have our own FRP manufacturing, we'll be manufacturing our own end fittings, And also, you know, we have a plant with the latest possible machinery and testing equipment. So, that said, that is all the things that we can take care of without doing the mass production. Once we do the mass production, it's only the supply that we do to, you know, the big utilities and the power grid approved suppliers. That's where, you know, the real feedback will start to come for 400 and the 765. Right now, we are only looking at 400. Our power grid approval will be there till 400 only. For 765, they will require further two years of performance.

Yeah, yeah, sure. My second question, the third question is, we have a Bhandara facility for ATK, which is a pilot plant, right? It's a stop plant arrangement. Yes. And the Umred will be the showcase facility for us, right? So, if all our registrations and practices and certifications are on Bhundara facilities, when we transition eventually to Umrah facilities, is that not going to create a problem? Are you sure that you will be able to use the same registration? Because that is your showcase, you know, this is just a size show, right?

Yes, yes. This is just the same marketing initiative. But going ahead, we are sure that, you know, sorry, I'm getting blocked. Sharadji? Yeah, I can hear you. Yeah. So, going ahead, yes, we are certain that, you know, using the same brand name, we'll be able to sell those cables and that should not create any conflict per se. Okay.

Thanks for answering all my questions. And congratulations on really breaking into the export international frontier and powder. That has been a long, serious dream of ours for the last five or two years. Absolutely. And really, very happy to see the Fed in holding the pink call of revenue. Really happy to see that.

And we hope to keep on improving. We hope to keep on improving each month.

Absolutely. Absolutely. Thank you.

Please do direct your queries to Stellar, who will transfer. As discussed, we remain focused on sustaining growth across our core businesses, strengthening our exports, and progressing with the next phase of growth across LT, wire rods, and polymer insulators. While we remain mindful of near-term market uncertainties, well, that's part of any business in any case, our focus will continue to be on very disciplined execution, operating efficiencies for sure, and of course, medium-term and long-term value creation. I'd like to thank our employees, our customers, suppliers, business partners, investors, for their continued trust, cooperation.

Thank you, sir. On behalf of MMP Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.