GMM Pfaudler (505255) Q3 25/26 earnings summary

Executive summary

• Revenue and profitability remained stable in Q3, with consolidated revenue at ₹883 crore, flat sequentially and up 10% year-over-year, and EBITDA at ₹105 crore with a margin of 11.9%.

• Nine-month consolidated revenue increased 8% year-over-year to ₹2,580 crore, and EBITDA grew 14% to ₹327 crore, with a margin of 12.7%.

• Order intake for Q3 was ₹961 crore, up 9% sequentially and 20% year-over-year, with backlog at a record ₹2,205 crore, up 27% year-over-year.

• Diversification strategy is gaining traction, with 50% of order intake from non-traditional industries such as Oil & Gas, Petrochemical, Defence, and Nuclear.

• Profit after tax for Q3 was ₹32 crore, with an adjusted PAT margin of 3.6% after accounting for exceptional items related to labor code provisions and workforce reduction in Germany.

Financial highlights

• Q3 EBITDA margin was 11.9%, down from 13.5% in Q2 and 12.7% in Q1; nine-month EBITDA margin was 12.7%, up from 12% last year.

• Q3 PAT was ₹32 crore, down 19% sequentially and 31% year-over-year, impacted by exceptional items; consolidated net loss after exceptional items was ₹8.89 crore.

• Q3 EPS (adjusted) was ₹7.28, down 21% sequentially and 31% year-over-year; nine-month EPS (adjusted) at ₹18.98.

• Gross margin for the quarter was 60.1%, compared to 63% in previous quarters, mainly due to product mix.

• Standalone revenue for the quarter was ₹242 crore, up 2% year-over-year; international revenue was ₹663 crore, up 10% year-over-year.

Outlook and guidance

• Q4 expected to be strong in India for revenue and shipments, with continued order intake momentum, especially in Pharma, Oil & Gas, and Nuclear.

• Management targets mid-term EBITDA margin of 16%-18%, contingent on global economic stability.

• Cost-saving initiatives and restructuring are expected to improve margins over the next two years.

• The company continues to monitor regulatory changes, especially regarding new labour codes, and will adjust financial reporting as needed.