Menon Bearings Limited – Investor Presentation Summary

Key Operational Highlights

  • Record highest ever quarterly revenue from operations at ₹94.04 Cr in Q1FY27.
  • Increasing exports and domestic orders for larger diameter bearings, bushes, and washers.
  • Samples received from a prominent US company for the aftermarket.
  • Targeting high-volume, high-value parts for additional annual business.
  • 38 parts developed and tested for a major customer, with substantial orders anticipated for domestic and export markets.
  • In-house capabilities include melting, die casting (pressure & gravity), machining, and powder coating; handling components up to 12kg.
  • Growing export footprint and domestic aftermarket; dynamometer installation underway for railway approvals and OEM orders.
  • Installed capacity of 30 lakh units/annum for Brake Lines.

Segment-wise Performance

Performance is reported on a consolidated basis. The company operates three distinct divisions:

  • Bi-metal Bearings: Market leader in engine bearings segment.
  • Alkop (Aluminum Products): High-pressure aluminum die-cast & machined components for automotive engines, compressors, oil & gas, 2W/3W, pumps, safety equipment.
  • Braking Systems: Manufactures asbestos-free Brake Lining & Brake Shoes, focusing on M&HCV segment and aftermarket.

Financial Highlights

Q1FY27 Consolidated Financials:

  • Revenue From Operations: ₹94.04 Cr (37.2% YoY growth from ₹68.56 Cr in Q1FY26)
  • EBITDA: ₹22.38 Cr (56.8% YoY growth from ₹14.27 Cr in Q1FY26)
  • EBITDA Margin (%): 23.80% (298 bps improvement from 20.82% in Q1FY26)
  • Profit After Tax: ₹14.11 Cr (67.3% YoY growth from ₹8.43 Cr in Q1FY26)
  • PAT Margin (%): 15.00% (270 bps improvement from 12.30% in Q1FY26)
  • EPS (Rs.): ₹2.52 (68.0% YoY growth from ₹1.50 in Q1FY26)

Annual Financials (FY26):

  • Revenue From Operations: ₹299.46 Cr
  • EBITDA: ₹64.42 Cr
  • EBITDA Margin (%): 21.51%
  • Profit After Tax: ₹38.25 Cr
  • Profit After Tax Margin (%): 12.77%
  • EPS (in Rs.): ₹6.83

Drivers of financial performance: Higher revenue growth driven by increased orders and export growth.

Geographical Revenue Split

  • Export revenue is currently ~34% of total revenue.
  • Projected to reach 37% by FY27.
  • Exports to over 24 countries including USA, Brazil, Mexico, Netherlands, France, Italy, UK, UAE, Africa & Japan.
  • Exports to USA are expected to increase significantly in Menon Bearing and Menon Alkop - Revenue per year expected is around ₹30 Crores.
  • Plans to enter Africa via a large distributor network.

Balance Sheet Snapshot (FY26)

  • Share Capital: ₹5.60 Cr
  • Reserves & Surplus: ₹179.74 Cr
  • Total Equity: ₹185.35 Cr
  • Borrowings (Non-Current + Current): ₹45.85 Cr (₹21.25 Cr + ₹24.60 Cr)
  • Total Equity & Liabilities: ₹267.52 Cr

Financial Health Insights: Strong reserve position and manageable debt levels.

Capex & Cash Flow Health

  • Capital Expenditure: ₹7 crore capex planned over the next two years for Alkop, targeting enhancement in machining capacity.
  • Commercial production of 'Thrust Washers' ongoing with enhanced capacity at new manufacturing plant.

Strategic & R&D Initiatives

New Business Segments:

  • Entered EV segment in Alkop for supply of components to Porsche, a German Luxury & Sports Car Maker through Eaton, an Ireland-based supplier.
  • Targeting EV segment to be 8-10% of Alkop by FY27.
  • Exploring new opportunities and new tech segments under Menon Bearing New Ventures.

Capacity Expansion:

  • Additional ₹7 crore capex planned over next two years for Alkop.
  • Commercial production of 'Thrust Washers' ongoing with enhanced capacity.

Expected impact on growth: New components developed have a revenue potential of approximately ₹55 crore annually. Alkop segment expects revenue of ₹95 Cr by FY27 (from ₹40 Cr now).

Industry Trends & Business Environment

Domestic market size per annum:

  • Engine bearings ~₹1,000 Crores
  • Brake segment ~₹2,000 crores
  • Aluminium casting products ~₹6,000 crores

Industry Growth Drivers:

  • Infrastructure Investment: GOI to spend $1.4 trillion on infrastructure by 2025.
  • PLI Outlay for Auto & Auto Components: ₹57,042 Cr.
  • Vehicle Scrappage Policy to Boost Replacement Demand.
  • Automotive Sector to Attract USD 8-10 billion in investments.
  • Indigenization levels for most major domestic and foreign OEMs have been on the rise.

Management Commentary & Growth Outlook

Strategic Outlook:

  • Focus on high margin products with no capacity constraint for future expansion.
  • Leveraging existing supply network and strong relationships with OEMs for products in the brake segment.
  • Registration of brake segment products with Railways is under progress.

FY Guidance:

  • Exports projected to reach 37% of revenue by FY27.
  • Alkop segment expects revenue of ₹95 Cr by FY27.
  • EV segment targeted to be 8-10% of Alkop by FY27.

Risks and Opportunities: The company operates in industries with low impact from shift to Electric Vehicles (M&HCV, OTR, Tractor, Industrial segments).

ESG Initiatives

  • Solar Power System (3,870 kWp) with output of ~53,67,828 kWh/year to reduce reliance on fossil fuels.
  • Energy-Efficient Motors with savings of 1,800–2,000 kWh/year.
  • LED Lighting for significant energy savings.
  • Electric Holding Furnace to eliminate diesel use.
  • Boilers with Pre-Heat Chambers to improve fuel efficiency.
  • Facilities to produce next generation LEAD FREE materials to cater to Future Emission Norms.