Pennar Industries Ltd (NSE:PENIND)

Q1 2027 Pennar Industries Ltd Earnings Call Transcript

Aug 13, 2026 / 06:00 AM GMT

Release Date Price: ₹158.34 (-0.85%)

Transcript

Key Points

Positve

Pennar Industries Ltd (BOM:513228) reported a 16% year-on-year increase in PBT, with profitability growth significantly outpacing moderate revenue growth, reflecting strong operating leverage.
The company achieved record-high order backlogs across key growth segments: PEB India at INR 1,008 crores, PEB US crossing $100 million, and Boilers at INR 150 crores, providing strong revenue visibility.
Gross margins expanded from 42.56% to 43.85%, and contribution margins increased from 27.14% to 28.51%, driven by an improved product mix and a shift towards higher-margin businesses.
The engineering services segment, particularly structural engineering, grew strongly by 26.3%, with the US sales team closing more work and no immediate threat from AI disruption.
Management provided a clear growth strategy, targeting a PBT margin of 7% over the next three years and a ROCE of 25-30%, with a commitment to improving capital efficiency and reducing debt-to-equity to 0.7.
The company achieved two significant milestones in the Boilers division: its first industrial power boiler order and its first orders in the pharmaceutical sector, expanding its addressable market.

Negative

Pennar Industries Ltd (BOM:513228) experienced moderate overall revenue growth of only 3.58% year-on-year, with a slowdown in several segments, including legacy businesses and hydraulics.
The TechPennar segment was a weak spot, with execution slips costing customers, although a new sales team has been put in place to improve the trajectory.
The hydraulics business is facing uncertainty due to potential US tariff reintroduction, causing order bookings to run lower than expected and leading to a wait-and-watch approach.
Employee expenses increased by 16% year-on-year, primarily due to investments in US operations (Telco acquisition), which raised concerns about cost growth outpacing profitability.
The PEB business in India experienced a drop in EBIT margins of more than 200 basis points due to a temporary delay in passing through steel price increases, although management expects this to recover in Q2.
Working capital utilization remains elevated due to deliberate stocking of raw materials and investments to support revenue growth, which has temporarily lowered return ratios (ROCE at 20%, ROE at 12%).

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

PENN.NS - Pennar Industries Ltd
Q1 2027 Pennar Industries Ltd Earnings Call
Aug 13, 2026 / 06:00AM GMT

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Presentation
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Unidentified_1 [1]
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Ladies and gentlemen, good day and welcome to Pennar Industries Limited Q1 FY27 earnings call. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing then 0 on your touch-tone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company. Are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the

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