Premier Explosives Limited (PREMEXPLN) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1FI27 conference call hosted by Premier Explosives Ltd. As a reminder, all participant lines 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 while pressing star, then zero on your touch-down phone. I now have a conference over to Mr. Akhilesh Gandhi from Stellar IR. Thank you, and over to you, sir.

Thank you, Steve. Good afternoon, everyone. I, Akhilesh Gandhi, on behalf of Stellar Investor Relations, welcome you all to the Prima Explosers Q1 FY27 Earnings Conference Call. We shall be sharing the key operating and financial highlights for the first quarter ended on June 38, 2026. Today, we have with us the senior management team of Premier Explosives. Mainly, we have Mr. TV Chaudhry Shah. He is our managing director. Along with, we have Mr. Vijayaji Kumar. He is our 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 statements to reflect development that occur after the statement is made. The document relating to the company's financial performance, including the investor presentation, has already been uploaded on the stock exchange. With that, I now invite Mr. TV Chaudhry Sir to share his opening remarks. On the company's performance for the first quarter. Thank you, and over to you, sir.

Thank you, Mr. Khaleesh, and good afternoon, everyone. I welcome you all to the earnings conference call of Premier Explosives for the first quarter ended June 30, 2026. Thank you for joining us. I trust you have reviewed our... Q1 financial year 27 results along with the investor presentation available on the stock exchanges and on our website. During Q1 FY27, we reported revenue of 102.6 growth, reflecting a decline of 28% year on year. The quarter was impacted by delays in dispatches and project execution, primarily due to ongoing global headwinds and Supply chain disruptions across certain programs. While these factors affected near-term revenue recognition, the underlying demand environment for our products and solutions remains robust. On the profitability front, operating performance was impacted by elevated raw metal costs amid prevailing global market conditions. The increase in input prices created temporary pressure on margins during the water. However, we continue to focus on operational efficiency, cost optimization, and disciplined execution to mitigate these challenges. Encouragingly, we believe that many of these external headwinds are gradually easing. As supply chains stabilize and execution improves, we expect a stronger operational performance and better revenue conversion in the coming quarters. Most importantly, our business fundamentals remain strong. As of today, our order book stands at Rs. 1,393 crore, with approximately 94% of the order book coming from different segment. The LDA order backlog provides strong revenue visibility and reinforces our confidence in the company's growth trajectory. Also regarding the recent acquisition by Apollo Microsystems, we believe this marks a significant milestone in Premier Explorer's growth journey and opens up exciting opportunities for the company. The partnership brings together Apollo's strengths in defense electronics and machine-critical systems with Premier's capability in energetic materials, rocket motors, ammunition, and propulsion systems. Creating a broader and more integrated defense platform. For Premier, the strategic benefits are clear, enhanced access to larger and more complex defense programs, stronger technology and R&D capabilities, a wider customer reach, and improved operational efficiencies through scale and collaboration. Combined strengths will also strengthen our position in India's growing defense indigenization. We believe this partnership will accelerate Premier's next phase of growth, strengthen our competitive positioning, and create long-term value for all stakeholders. We remain excited about the opportunities ahead and look forward to unlocking the full potential of this partnership. Now, I request Mr. Vijay Kumar, our CFO, to share the financial performance.

Thank you, sir. Good afternoon, everyone. The result presentation for the quarter 100 June 38, 2026 has been uploaded on the stock exchanges and on the company's website. I believe we may have gone through the same. The revenue from operations for Q1FI27 de-groove by 28% year-on-year to 102.6 crores. For EBIT, for Q1FI27 de-groove by 80% year-on-year to 4.8 crores. The EBIT margins at the quarter stands at 4.7%. Our net profit decreased by 80% in year on a year to 3 crores. The pad margins at the quarter stands at 3%. Now coming to the order book. The company's current order book stands at 1,393 crores, out of which different segment order is majority of 1,309 crores, which is equal to 94% of the total order book. Explosive segment stands at 42 crores, which is equal to 3% of the total order book. And service segment, which is the operational and maintenance services segment, stands at 42 crores, which is equal to 3% of the total order book. This order book reflects the strong growth visibility we see over the coming years. We remain confident that supported by sustained execution momentum, continued development of new products, and our ongoing expansion initiatives, the company will continue to maintain a strong growth trajectory in the forthcoming quarters. With this, we will now open the floor for questions and answers. Thank you.

Thank you, sir. 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Parash Kulkarni with Ignite Capital. Please go ahead.

Hi, thank you for taking my questions. Firstly, on the cost side, we have seen a sharp decline in other expenses from 20 crores to 11 crores in 1Q. So, if I were to build it for the entire year, what is the cost do we expect for the full year? And also, what activities will take to this evening?

In earlier quarters, there were provisions, expected credit loss provision, and there was a decline in forex, decrease in forex losses. So, it is not comparable for exact apple to apple. There is a reduction in cost.

Okay. So, uh, yeah, yeah.

So, is this 11 crore sort of sustainable run rate?

Yeah, we can say around 9 crore kind of thing. You can see in that year, June 25 also, it is around 9 crore. So, 9 to 10 kind of thing.

Okay, understood. And now coming to the gross margin, would you explain in your opening remarks that the geopolitical situation affected the margin? So looking at effort 27, where do we see the gross margin? Do we see that improving sequentially or should we maintain this 35% as a decent assumption?

Margins will definitely improve, because we have different products, and there is a lot of products, so depending on the dispatches of the products, it keeps on increasing.

Yeah, I'll leave my order book and execution pattern. We have already this quarter's movement of materials and all those goods. Use us a conference next.

Could you please quantify as to whether this is the baseline and we should assume 40% kind of gross margin going on, looking at you for which way?

Even in earlier conscious calls also we said that we are targeting an EBITDA of 15-20%. So I think same line we are.

Now, you mentioned about enhancing your product offerings, and you said that we would be also looking at drones and UAVs. So, what is the current stage of development here? I mean, are we trying to develop our own UAV technologies, or we would be partnering with other companies? So, could you throw some light on that?

We are not developing our own... Drone technologies that is for the birds and all those. We are partnering with several drone manufacturing industries for the

Thank you, Lord. from the neighborhood side of the business because they have got good They have their relations with the Navy, and they have got orders with respect to the So, do you see any question going on in the order book from Live Insight?

We are hoping that this association will help us to strategically strengthen ourselves.

And last question around the export licenses. In fourth quarter we have talked about around for 400 pros of export licenses we have not received. So when do we have received them currently because last time we had said that We would be expecting to get those licenses within three to four months. So what is the status there and what is the export portion which we would be expecting in FY27 from the current order, the execution.

Thank you. The backlogs of previous quarters, I think, will be.

Is it fair enough to expect around 200-300 crore of export in 2017?

We are targeting some...

Thank you. The next question comes from the line of Varun Jain with Dolan Capital. Please go ahead.

Yeah, hi. Good afternoon, sir. So, I have a couple of questions. Starting with this July 2023 Flares order, this was guided for completion in Q1 FY27, and the 30CR of LD reversal was expected. So, any update on that?

Yeah, LD still is in process. Maybe by this quarter end or by October or November, I think we'll come to know. A lot of processes are there. It's going on. And as far as players are concerned?

Yeah, further in pipeline, we started production in our own plant and all those. So we are hoping that this will contribute well in the coming quarters.

No, no, earlier order also, we are going to complete it in another three to four months. There is a backlog of about 75 crores. So that will be completed in the next four or five months.

So just for clarity, sir, this July 2023 order will get completed in the next four or five months. Is that right? Got it.

I already said, I will complete it.

And, sir, earlier management had guided for this 430 CR order of October 2025 that approximately two-thirds will be done in FY27, so that would be close to 285 CR. So, is that guidance on track, and how much did we do in Q1?

Q1, it was only 21 crores kind of thing, and in the second quarter, we were expecting a better number.

And for the entire year, will we do close to 285 or something?

No, no, we have to completely order before this financial year.

This is the entire 430 CR will be done in FI27? Will we have the capability, like the capacity to do the entire order?

Yes, yes. Yeah, we have. The shaft material payload we are dependent on imports, which we have completed, we have executed. The flares we do in our own plant, so we have the capability to complete.

Got it, sir. And, sir, on the guidance front, I think in FY27, management had guided for 600-700 CR. So, we have done close to 103 CR in this Q1. So, in the balance nine months, can we do 500-600 CR more? I mean, do we have that kind of capacity?

Yeah, capacity-wise, like I explained, we have the capacity for flares and other products to make, whereas items like shafts, we are dependent on imports where it depends on the conditions prevailing there. But otherwise, flares and other things are made in our own facility and then we will be able to execute that.

You retain the 600 crore guidance for FY27. Is that right? And, sir, last quarter, you mentioned that there was a new alternate raw material which DRDO, you had sent to DRDO for approval, and this was going to be used for these landmines and loitering munitions for drones. Any update on that?

There is considerable progress on it. They are conducting the tests of our material what we have proposed. That is being done by DRDO, ARDE and HMRL. Once it is complete, I think they will give us a clearance to use that material. That will open a door for completely getting into mines, that is, Adrushi Mines and Ulka Mines, which are very much in demand in Iran.

So by when do we expect, like any completion of survey by DRDO?

Hardware part, we have assembled all together, and then other components and then chemicals, it's going on. It may take another six months.

Another six months? Okay. Got it, sir. And so on the Kattapalli, this CapEx, so we had earlier said that by Q1 and some assets will start commissioning, then by Q2, some will start. So did we see anything commissioned by end of Q1 or even till now, because we are halfway through Q2 also?

The integration of the pipelines and the plant and machinery erection and installation for the RDX and HMX production is almost complete, and then we are expecting to take up the water trials in September month, that water trials will take a month, and after that it will come into production of the products intended for. That is about RDX and HMX. About a mixing plant where two and a half tons of planetary mixer is installed, some of the components which are imported by the supplier of the mixer, they got delayed because of the maritime movement of ships and all those. So now we have put pressure on them and then make them ship it by air. So that also we are hoping that end of September we will be ready with the plant and then we will take up the tummy trials.

And sir, on the Andhra Pradesh, this expansion plan, like after the acquisition of some motor stake by Apollo, are we continuing with it, and have we finalized the land parcel for it?

Land parcel, the pricing was an issue. We were requesting the government for a reasonable price, which we can afford to install, because as an explosive industry, we require large landed areas. Such a large area. The price makes a big difference. So, we have requested the government for reworking the price and then to give us a better price by which we can get benefited. So, at present, it is at that status.

And this expansion will be going on even post, like Apollo will continue with it, right?

Yeah, the requirements are there, which definitely I think once They come into the picture, and then we'll be taking a call after making the presentation of our thing.

Okay, sir. Got it. And just the last one from my side, sir. What changes do you expect, like, post-Apollo, like, with the new capabilities they bring in, what more can you do, really? Any synergy benefit or any guidance there?

We are expecting their capabilities are in the defense electronics. So in which area where we have no expertise, so we are expecting that we will be able to get a good gainful benefits from them with their expertise and then the systems which where you work integrated with electronics and high energy materials, that's where I think we can definitely, we are looking forward to do a better job. These all will come, more details will come probably in the next quarter.

Thank you and all the best.

Thank you. The next question comes from the line of Chandraesh with Niveshay. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, two questions on the order book side. Can you provide the program-wise breakup of the order book?

You can only give a breakup of industrial explosives and defense, that kind of thing.

We have 94% defense orders and 6% regular explosives, industrial explosives. Okay.

Okay. And so secondly, with respect to this project push, I mean, BEL is also expecting about 30 to 40,000. So on that side, how much is premier explosive expecting in the QRsum category?

I couldn't get the question. Could you please repeat?

So, basically, I mean, the QR, Sam, how much is you are expecting under the...

QR, Sam? No, we... If you have participated in a tender and something, then we can say that tenders itself are not at court.

Okay, you got it. Yeah, thank you so much, sir.

Thank you. Participants who wish to ask a question may press star and 1. The next question comes from the line of Parash Kulkarni with Ignite Capital. Please go ahead.

Yes, just one question on the order book section. What is the order inflow guidance for FY27?

F527, we are expecting another two to three hundred crores.

Two to three hundred crores, and the integration will be in F527 itself for health.

No, no, all our address are for next two years. 1,000 crores plus.

Thank you.

Thank you. The next question comes from the line of Deepak, an individual investor. Please go ahead. Yes, sir, you're audible. Please go ahead.

Okay. Hi, good afternoon, sir. So, I have a particular question on, in Q1 FY27, revenue declined by 28% year-on-year. Did you dispatch an exhibition delay? Which specific projects were impacted, and what portion of a deferred revenue is expected to recover during FY27?

Particularly, the export orders what we have, those deliveries got delayed because of the maritime problems. Similarly, some of the components which we are importing for delivery to the finished product, that is countermeasures, which are supposed to components are supposed to come from abroad, there also the delays have caused delays in deliveries. This is the main reason for the things which we are expecting to. Overcome or complete those executions in the current quarter, second quarter, that is.

Okay. Understood, sir. And in defense and space, revenue declined by 35% year on year, despite a strong defense environment, as you mentioned. Was purely timing related, or there have been delay in a customer procurement and acceptance process?

Some delays are there, which are because of the delay in getting the export licenses, where the export orders are there. But now, like I mentioned in the beginning, most of the licenses are received, and we are in the process, and we hope that in second quarter and third quarter, we will be completing all this.

Okay, so there are no delays from a customer or requirement and acceptance? No. Okay. And what will be the revenue guidance for FY27, and does management still expect to achieve meaningful growth despite a weak start of this year?

Yeah, like we mentioned, we are expecting a target of around 600 cores turnover, which is a considerable increase in the previous year, two years, if you take it.

Okay. I'm Mr. Olsen. Okay, sir, thank you for the opportunity. I will run that with you. Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and The next question comes from the line of Arun Cheyeng with Dollard Capital. Please go ahead.

Yeah, so just a couple of follow-ups. So on this April 2026, 350 CR international order for defense products. So have we received the export license for this one?

It's in process actually.

So, like, when can we receive export license for this, and when will the...

Too much we are expecting. Yeah. It usually takes three to four months at least for every processing of the export license. And before we submit for processing, we have to receive the import licenses from the importing country. So, this process...

The importing license, I didn't understand. Why do you need the importing license for this?

As I'm imparting. The country where we are going to export, they have to issue an import license to the importer there.

Okay, got it. So once that comes, then you start production. So is it safe to assume that in this calendar year, there will be no production for this order?

Actually, I think in the last quarter, yeah, we're expecting some dispatches.

Last quarter, got it. And sir, on this bulk explosive business, what is the guidance for FI27 and FI28 also, if you can give?

It's difficult to predict that FI28, because the prices are very much dependent on the raw material import car prices. And the multiple manufacturing capacities are there at also more than 40 layers in this field.

For FY27, if you can give, because I think we are already done with 40% of 27. So, some guidance of what kind of revenue there will be and what is the margin profile right now.

Margin.

Hello.

We have an executed contract with single and equal risk, so the balance part of about 25 to 30 crores, that will be executed this year, this financial year.

So, and other than that, nothing, just that much?

Other than that, we have detonating use orders and all these things, there also we have export orders, so those things will be continuing.

So, close to 80 CR, I think we can get, right, in 27, in this revenue.

Yeah, just like last year, I think we'll make it.

Good morning, sir. And what is the margin profile we are getting here right now? Because from what I've heard, like the Kohl India and Singreni margins have been very, very down.

We have a margin. In fact, Kohl India, we have withdrawn last year also, and then Kohl last year also, because of the prices, very low prices. Singareni, yes, we are servicing because it is close by, so a little better than Coal India prices. Otherwise, yeah, margins are very, very thin. In many places, it is negative.

It is like low single-digit margins then, right? And just last one, sir, what is the, like, in the international market, sir, what is the scenario with RDX and HMX supply, demand, and pricing? If you can give us some color there.

Demand is good, but getting licenses is difficult.

And pricing of IDX, HMX?

Exporting to different countries. So, depending on country.

Present, because war scenario and all those push the demand up. So, for the present, yes, prices are good. May after two years or three years, what happens, we'll have to see that.

Can you quantify the prices? Can you give us some band that would be helpful? For RDX, HMX, any other major grade of explosives?

We are competing in this area also, so we don't want to say anything on that.

No, just the industry price brand, what price brand it operates in, not the...

You can get easily from the internet and other places, rather than...

Okay, okay. No issues, sir. That's all from me. Thank you and all the best.

Thank you. The next question comes from the line of Deepak, an individual investor. Please go ahead.

Hello. Thank you for the opportunity again, sir. So, my question is related to EBITDA margin. We have seen a drastically decline in EBITDA margin from 15% to 6% in Q1 FY27. So, can you share what's the reason behind?

As our MD sir explained, there is a bokeh of products, so depending on product dispatch, it slightly varies, but overall our guidance is about 15 to 20% is our yearly target.

So in this, how much margin has been erosion due to like raw material costs and under absorption of fixed costs?

Friends, what we are seeing is there, but I think in the coming quarters, we will be making it up.

So, in this, that the raw material price has been started to normalize?

Yeah, it is not normalizing, but already we have some contracts are there, so we have to execute them. Once we complete the contracts, we will be increasing the price also.

Okay. So, if the raw material prices get normalized, what EBITDA margin range we can expect? Is it same like 15 to 20%?

Right, for this financial year.

Okay. And one last question on order book that we have nearly 13 to 14 million of order book equivalent to nearly 3.5, 3.6 of FY26 revenue. So what percentage of this order book is executed in like next 12 to 18 months?

However, the run rate we are expecting is about 500 to 600, rather 600, we are targeting.

500 to 600 odd card would you are targeting in next 12 to 18 months? Okay, okay. Thank you sir, thank you so much for the opportunity, and all the best for next one.

Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. Thank you. As there are no further questions from the participants, I now hand a conference over to Mr. T.V. Chaudhary for closing comments.

Thank you, Mr. Ghalish. And thank you, everybody, all the stakeholders for showing interest in the company and wishing us good success in the future endeavors. Thank you very much. Thank you.

Thank you. On behalf of Premier Explosives Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your rights. Thank you.