Manaksia CoatedMetal delays Phase 2 capex, pushes timeline beyond FY28
Cold rolling mill and second Aluzinc line now start in FY28 and complete post-FY28, reversing May 2026 guidance of completion within FY28.
What's new
- Q1 EBITDA per ton hit record ₹10,400, driven by full Aluzinc transition and pricing discipline.
- All new orders carry a margin buffer above current costs, reversing Q4's compressed pricing.
- Order book at ₹450 cr provides 4.5-5 months visibility, up from ₹100-120 cr lows two years ago.
- Phase 2 capex estimated at ₹2,500 cr for cold rolling mill and second Aluzinc line, funding structure pending.
Themes from the call
Demand
Order book at ₹450 cr (80% export) gives 4.5-5 months visibility, with repetitive quarterly orders from long-term customers supporting predictability.
Margins
EBITDA per ton at ₹10,400 (Q1 FY27) is highest ever; management guided FY27 consolidated margin to 11-12% but refused to commit to a specific percentage.
Capital allocation
Phase 1 capex ₹350 cr nearly complete (₹140 cr already spent); Phase 2 ₹2,500 cr pushed to post-FY28, with debt-equity mix yet to be finalized.
Guidance watch
- FY27 revenue ₹1,300-1,350 cr on ~160,000 tons (45-50% growth); FY28 revenue ₹1,700-1,750 cr on 180,000-200,000 tons.
- Consolidated EBITDA margin FY27 expected 11-12% versus Q1 achieved 10.4%; management declined to confirm 12%.
- Phase 2 capex start moved to FY28, completion post-FY28; no exact commissioning timeline provided.
Risk flags
- Phase 2 delay raises questions about FY28 revenue target achievability if capacity plateaus after Phase 1 ramp.
- Working capital at 75 days remains elevated; management expects compression only after CRM is operational (Phase 2).
- Margin target (11-12%) assumes no dip during CCL2 ramp-up and sustained pricing discipline; cost pass-through not guaranteed.
Key quotes
-
"All of the new orders in Q1 were priced to fully cover the current cost environment with a margin buffer on top."
— Karan Agrawal, Whole-time Director -
"We do want to do this within FY '28. That is our -- that is the blueprint that we have decided upon."
— Manaksia management, May 2026 call (on Phase 2 cold rolling mill)
The brief
Manaksia CoatedMetal delivered a record quarter by EBITDA per ton, but the real news from the July concall was a timeline slide. The cold rolling mill and second Aluzinc line, originally guided for completion within FY28, have been pushed out. Phase 2 now starts in FY28 and ends post-FY28. Management didn't explain why, and didn't offer a firm commissioning date.
Q1 was operationally strong: revenue ₹263 cr, EBITDA per ton ₹10,400 (the highest ever), and the full transition to Aluzinc is complete — zero galvanized output. Pricing discipline recovered from Q4's cost-pricing lag. The order book of ₹450 cr provides nearly five months of visibility, with 80% from repeat export customers.
But the capacity narrative is now more complex. Phase 1 (Color Coating Line 2, Aluzinc upgrade, solar plant) is nearly done; CCL2 commissions in Q2. Management projects ₹1,300-1,350 cr revenue for FY27 and ₹1,700-1,750 cr for FY28. The FY28 target assumes healthy utilization of Phase 1 assets — but Phase 2's delay means Manaksia cannot count on the CRM's working capital benefits or the second Aluzinc line's revenue boost within FY28. The company is essentially asking investors to underwrite a growth plan that loses its next catalyst.
Margin guidance is similarly hedged. Management said FY27 consolidated margin will reach 11-12% but refused to confirm 12% when pressed. The Q1 margin of 10.4% suggests the upper end is ambitious, especially with CCL2 ramp-up costs in H2.
Manaksia's execution in Q1 is credible. But the Phase 2 timeline shift — without a clear reason — makes the FY28 revenue guidance look stretched. The market now has to decide whether to trust the operational delivery or flag the strategic drift.
Record EBITDA per ton shows near-term execution, but the Phase 2 delay leaves FY28 targets hanging. The onus is on management to explain the pivot.