Pennar Industries Ltd (BOM:513228) Q3 2026 Earnings Call Highlights: Strong Revenue Growth Amid …

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Wed, February 18, 2026 at 10:03 AM GMT+9 3 min read

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**Revenue:** Increased by 13.3% to INR959.02 crores.

**PAT (Profit After Tax):** Grew by 10.14% to INR33.55 crores.

**EBITDA:** Improved by 7.2% to INR98.54 crores.

**Order Backlog:** PEB India at INR810 crores; PEB US at $60.6 million.

**Q3 PAT Margin:** Stood at 3.56%, would have been 4% excluding one-time events.

**ROCE (Return on Capital Employed):** 21.3%.

**Return on Equity:** 12.1%.

**Working Capital:** 76 days.

**Engineering Revenue Growth:** Increased by 25.19% to INR520.31 crores.

**Finance Cost:** Increased by INR2.85 crores, standing at 3.56% of net revenue.

**Depreciation and Amortization:** Increased by INR4.25 crores.

**Other Income:** Increased by INR9.23 crores.

**Employee Benefit Expenses:** Increased by INR17.31 crores.

**Other Expenses:** Increased by INR39.79 crores.

**Tax Expense:** Lower due to a credit received, with a provision reversal of INR1.4 crores.

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Release Date: February 16, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Revenue increased by 13.3% to INR959.02 crores, indicating strong performance across core business segments.

PAT grew by 10.14% to INR33.55 crores, with underlying growth potentially reaching 20% excluding one-time costs.

The PEB division's capacity utilization improved, and inventory reduced by about 4,000 tons, indicating operational efficiency.

The US subsidiary, Ascent, achieved strong double-digit growth in both revenue and profitability, with an order backlog of $52 million.

The Boilers division saw a significant increase in order backlog to INR123 crores, driven by strong export orders, setting the stage for robust revenue growth in Q4.

Negative Points

PAT growth was impacted by one-time costs related to Labour Code implementation and wage agreements, reducing the potential growth rate.

Working capital days stood at 76, reflecting timing-related impacts from revenue not coming in some segments.

The PEB India segment faced challenges due to labor issues, which affected growth in the quarter.

Finance costs increased by INR2.85 crores due to higher working capital utilization and acquisition-related expenses.

Employee benefit expenses rose by INR17.31 crores, including INR3.6 crores due to one-time costs, impacting overall profitability.

Q & A Highlights

Q: Can you comment on the strong growth in diversified engineering and what segments have contributed to this growth? A: The growth in diversified engineering is primarily driven by strong performance in our core business verticals, including boilers, engineering services, and process equipment. Additionally, our PEB US business and the resolution of labor issues in India have contributed to this growth. (Aditya Rao, Vice Chairman and Managing Director)

Story Continues  

Q: Why was the PEB business segment flat despite a strong order book and new capacity? A: The acquisition did not contribute significantly in the last quarter due to delays in system integration and order backlog transfer. However, the current quarter shows strong order backlogs and production output, indicating a positive outlook for the PEB business. (Aditya Rao, Vice Chairman and Managing Director)

Q: Can you quantify the one-off costs that impacted the PAT, and will these recur? A: The one-off costs amounted to approximately INR4 crores, related to Labor Code compliance, a court order for union employee settlement, and wage agreements. These are non-recurring costs. (Shrikant Bhakkad, Chief Financial Officer)

Q: What is the current order backlog for the US and India PEB businesses? A: The US order backlog for buildings is $52 million, and for Telco, it’s about $10 million. The India order backlog stands at approximately INR820 crores. (Aditya Rao, Vice Chairman and Managing Director)

Q: How do you plan to achieve the 20% PAT growth target, and what are the main growth drivers? A: We are confident in achieving 20% PAT growth through strong order backlogs and revenue streams across our business units, including boilers, hydraulics, and PEB. The resolution of labor issues and increased capacity utilization will also support this growth. (Aditya Rao, Vice Chairman and Managing Director)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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