Highlights
| Issue Size –: 1,68,83,116 shares | Issue Open/Close – 30 July / 1 Aug, 2025 |
| Price Band (Rs.) 366 – 385 | Issue Size (Rs.) – 6500 mn |
| Face Value (Rs) 10 | Lot Size (shares) 38 |
M&B Engineering Limited (MBEL) incorporated in 1981, is one of India’s leading Pre-Engineered Buildings (PEB) player. MBEL business comprises of (i) Phenix division which provides comprehensive solutions for PEBs and complex structural steel components; and (ii) Proflex division which provides self-supported steel roofing solutions.
The company offers comprehensive turn-key solutions which includes project design, engineering, manufacturing and erection in accordance with customer requirements across general engineering and manufacturing, food and beverages, warehousing and logistics, power, textiles, and railways.
With the capacity of 103,800 MTPA of PEB Structures and d 1,800,000 square metres per annum of Self-Supported Roofing solutions, the company has undertaken execution of over 9,500 projects under Phenix and Proflex Divisions. Since FY10, they have served customers in 22 countries, including customers in US, Brazil, South Africa, Qatar, Sri Lanka, Morocco,
Out of the total proceeds of Rs. 6,500 mn, ~Rs. 1,306 mn would be utilized for funding capex, Rs. 52 mn would go towards investment in IT software upgradation, Rs. 587 mn would go towards repayment of certain borrowing availed by the company. Rs. 805 mn would be utilized for general corporate purposes and Rs. 3,750 mn would go towards existing promoter selling shareholders of the company.
Key Highlights
- The Indian PEB industry expanded at a CAGR of ~8.3 pct over FY19-25 growing from Rs. 130 bn in FY19 to Rs. 210 bn in FY25 and it is expected to reach Rs 330 – 345 bn by FY29P with CAGR of 9.5-10.5 pct over FY25-29. The self-supported roofing market in India logged a CAGR of 6.1 pct between Fiscals 2019 and 2025 to reach Rs 3 bn in FY25.
- We have two manufacturing facilities at Sanand, Gujarat and Cheyyar, Tamil Nadu for the manufacturing of PEBs and complex structural steel components with a combined installed capacity of 103,800 MTPA for manufacturing PEBs. The company intends to reach 168,800 MTPA capacity by FY28.
- Over the period of their operations, they have undertaken execution of over 9,500 projects and have established long-term relationships with diverse set of customers across industries they cater to. As of Q1FY26 they have orderbook of Rs. 8,428 mn (75 pct in Phenix Division and 25 pct in Proflex division) which is 0.85x of FY25 sales.
- MBEL intend to expand their operations and set up manufacturing facilities in different regions in India where we are not currently located in order to cater to potential customers in those regions. This will reduce their reliance on any particular region.
- MBEL’s key growth strategies includes (i) Leverage leading position in the domestic PEB market to capitalize on the growth expected in the industry and continue to strengthen and consolidate presence in the self-supported steel roofing market in India. (ii) Augment manufacturing facilities in Phenix Division to better serve customers by setting up a strategically located manufacturing facility (iii) Increase sales contribution of exports by focusing on USA and other key markets. (iv) Expand business through strategic alliances or inorganic opportunities.
- The sales of the company have grown by 5.96 pct CAGR Over FY23-25 and EBITDA/profit has grown 37.97 pct CAGR/53.08 pct CAGR over same year. In FY25 the company reported sales of Rs. 9,886 mn, which grew 24.32 pct YoY while EBITDA of the company rose 58.79 pct YoY to Rs. 1,264 mn. In FY25 the company posted profit of Rs. 771 mn which jumped 69.08 pct YoY.
Key Risk
- The market share of the unorganized industry in the pre-engineered steel buildings industry is higher as capital investment is not required for entering the market.
- Some of MBEL customers have businesses which are seasonal in nature and a downturn in demand for products by such customers could reduce MBEL sales during such periods.
- MBEL operation are working capital intensive which dragging operating cash flow, if operational cash flow remains weak, the company may need to scale down the business and could face challenges.
Financial Performance
| Particulars | FY23 | FY24 | FY25 |
| Sales (Rs. mn) | 8,805 | 7,951 | 9,886 |
| EBITDA (Rs. mn) | 664 | 796 | 1,264 |
| EBITDA Margin (%) | 7.54% | 10.01% | 12.78% |
| Adjusted Profit/Loss (Rs. mn) | 329 | 456 | 771 |
| Profit/Loss Margin (%) | 4.72% | 4.12% | 11.25% |
| ROE (%) | 3.7% | 5.65 % | 7.73% |
| ROCE (%) | 18.89% | 19.68% | 25.13% |
Peer Comparison based on FY25 Financials
| Particulars | MBEL | Interarch | Pennar Industries | BirlaNU |
| Sales (Rs. mn) | 9,886 | 14,538 | 32,266 | 36,152 |
| EBITDA (Rs. mn) | 1,264 | 1,362 | 3,108 | 586 |
| EBITDA Margin (%) | 12.78% | 9.37% | 9.63% | 1.62% |
| Adjusted Profit/Loss (Rs. mn) | 770 | 1078 | 1195 | -329 |
| Profit/Loss Margin (%) | 7.73% | 7.31% | 3.66% | -0.90% |
| ROE (%) | 25.13% | 14.35% | 11.95% | -2.72% |
| ROCE (%) | 24.80% | 18.88% | 15.66% | -2.97% |
Valuation
M&B Engineering Limited (MBEL) is one of India’s leading PEB player catering to a diverse customer profile across industries. MBEL execution record and orderbook of Rs.8,428 mn indicates short term sales visibility. At the upper end of the price band of Rs. 385, the issue is priced at a PE of 28.6x its FY25 earnings on post issue equity capital. The issue appears to be aggressively priced. Given the low entry barrier in the business one can avoid this issue.
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