Everest Kanto's Egypt plant is five months late and its US order book just shrank.
A 210 basis point jump in EBITDA margin masks two unexplained delays to key international expansion projects, stretching the revenue realization timeline.
What's new
- Consolidated EBITDA margin reached 13.8% in FY26, up 210 basis points, with PAT up 50.1% to ₹126.7 crore.
- The Egypt plant, originally guided for January 2026, will now be operational by end of June 2026.
- The US order book execution timeline has stretched to 18-24 months from the prior 12-18 months.
- Dubai operations remain constrained at 50% capacity utilization due to geopolitical disruption.
Themes from the call
Margins
Standalone EBITDA margin reached 16%, up from 10.6% a year ago, driven by a better product mix with semiconductors and defense contributing more.
Capacity Expansion
Two key international greenfield projects, Egypt and Mundra, are ramping, but Egypt is significantly delayed with no explanation for the pushback.
Geopolitical Risk
The Dubai business is running at half capacity, capping group performance despite underlying order book improvement.
CNG Demand
CNG now accounts for 22% of passenger vehicle sales, cementing its position as the second-largest fuel type in India.
Guidance watch
- Management would not provide consolidated financial guidance for FY27 despite strong FY26 results.
- The new CEO, Mr. Gupta, is yet to join and details on his background were deferred.
Risk flags
- The Egypt plant delay and the stretched US execution timeline suggest international revenue may be recognized slower than previously modeled.
- The unresolved GST case could take another 6-12 months, creating a contingent liability overhang.
- Dubai's 50% capacity constraint is a direct geopolitical drag on group-level profitability.
Key quotes
-
"Egypt will be happening very soon, maybe by January."
— Everest Kanto management, Nov 2025 call -
"On Egypt, we may be operational by the end of this month, and the ramp-up will start happening again after 6 months."
— Everest Kanto management, Jun 2026 call -
"U.S.A. is around $80 million. And the execution time is 12-18 months."
— Everest Kanto management, Nov 2025 call -
"The order book in the USA is around 75 million USD, and it is to be executed over a period of 18 to 24 months."
— Everest Kanto management, Jun 2026 call
The brief
Everest Kanto Cylinders reported a strong year. Standalone EBITDA margin reached 16%, up from 10.6% a year ago. Consolidated PAT surged 50%. Better product mix, with semiconductors and defense contributing more, drove the gain. CNG's rise to 22% of passenger vehicle sales provides a solid domestic tailwind.
But the international story is fraying in ways management did not explain. Egypt was supposed to be running by January. It isn't. It will start by the end of June, a five-month delay. The US order book shrank slightly to $75 million from $80 million, and its execution timeline stretched from 12-18 months to 18-24 months. Revenue realization is slower than promised.
The delays matter because the balance sheet is carrying ₹162 crore of capital work-in-progress for these projects. The longer they take to ramp, the longer that capital sits idle. Management refused to give FY27 guidance, which leaves the market to guess how these timing shifts flow through to next year's numbers. The GST case is another unresolved overhang.
The margins are real progress. But international execution is running behind schedule with no coherent explanation. Not yet.
The domestic margin story is real, but the unexplained delays to international projects are a credibility check on management's execution.