Financial Performance Highlights

Q2 FY27 Results:

  • Revenue from operations: ₹40 crore, up 53% year-on-year
  • EBITDA: ₹15.61 crore, up 49% year-on-year
  • EBITDA margin: 38.65%
  • Profit after tax: ₹8.49 crore, up 55% year-on-year

H1 FY27 Results:

  • Revenue from operations: ₹72 crore, up 47% year-on-year
  • Profit after tax: ₹15.76 crore, up 50% year-on-year

Business Model and Revenue Mix

  • Rental business contributed approximately 51.5% of Q2 FY27 revenue
  • Sales contributed approximately 48% of revenue
  • The mix remains broadly similar to previous financial year (49% sales, 51% rentals)
  • Rental business is more profitable than sales business

Capacity Expansion and Operational Updates

MS Scaffolding Capacity:

  • Current capacity: 9,000 tonnes per annum (increased from 3,000 tonnes post-IPO)
  • Target capacity: 15,000 tonnes per annum
  • Production capacity exceeded 750 tonnes per month as of last month

Aluminium Scaffolding and Ladders:

  • Capacity being increased from 1,500 tonnes to 2,500 tonnes

New Product - Aluminium Formwork:

  • Initial production capacity: 500 tonnes annually at rented facility
  • Trial runs have commenced
  • Target commercialization: December 2026
  • Product composition: 95% aluminium, 5% MS
  • Expected rental yield: 60-66% (similar to aluminium scaffolding)
  • Economic life: 150-200 usage cycles (approximately 10 days per cycle at peak utilization)

Integrated Manufacturing Facility:

  • Location: Mathura
  • Status: Work in progress
  • Expected operational date: May 2027

Warehouse Network Expansion

  • Expanded from 21 to 24 locations across India
  • Improving pan-India reach and customer service capabilities

Financial Guidance and Outlook

FY27 Guidance:

  • Revenue growth: 50-70% year-on-year
  • PAT growth: 40-50% year-on-year
  • Management stated they have "surpassed the guidance provided earlier"

Future Expectations:

  • Aluminium formwork expected to contribute at least 15% of total business from next financial year
  • PAT margins expected to remain above 20% with variation of around one percentage point
  • Maintain guidance of 50-70% top-line growth and 40-50% bottom-line growth for at least next two years

Debt and Capital Structure

  • Current short-term and long-term debt: Approximately ₹44 crore
  • Additional debt requirement: ₹20-25 crore for factory completion and working capital
  • Peak debt expected: ₹65-70 crore (including additional debt)
  • Company aims to remain cash-flow positive
  • Trade receivable days reduced from 90 days to approximately 75 days
  • Trade receivables: Approximately ₹30 crore (compared to ₹23 crore last year)

Rental Business Metrics

Rental Yields:

  • MS scaffolding: 32-38%
  • Aluminium scaffolding: 60-66%

Asset Values:

  • MS scaffolding: ₹65,000-70,000 per tonne
  • Aluminium scaffolding: ₹5-6 lakh per tonne

Economic Life:

  • MS scaffolding: 15-20 years
  • Aluminium scaffolding: 5-7 years
  • Scrap residual value: Approximately 50% or more for both types

Utilization and Rental Duration:

  • Aluminium scaffolding utilization: Nearly 80%
  • Average aluminium scaffolding rental order: Approximately 4 months
  • MS scaffolding average rental tenure: Approximately 1 year
  • Orders can range from 1 day to 2 years

Export Business

  • Exports expected to contribute 7-8% of total revenue in FY27
  • Currently exporting to Middle Eastern countries
  • Products manufactured to EN 1004 European Standard
  • Planning to enter European and Australian markets next year
  • Margins on export orders described as "reasonably good"
  • Overseas business currently follows sales model (not rental)

Demand Drivers and Market Outlook

  • Key demand drivers: Data centers, semiconductor plants, airport projects (Navi Mumbai, Bhogapuram)
  • Over 100 large data centers and around 10 semiconductor plants under construction
  • Demand also from malls, hotels, and ongoing infrastructure development
  • Formwork market growing rapidly with 10-15 new players entering
  • Market currently concentrated in 5 major metros, expected to expand to Tier 1 and Tier 2 cities

Differentiation and Competitive Position

  • Key differentiator: Organized, pan-India approach
  • Operating in organized wholesale manner and serving retail market at scale
  • Steel scaffolding described as commodity business with hundreds of players

Management Participants

  • Mr. Pradeep Aggarwal - Chairman and Managing Director
  • Mr. Ajay Kumar Kanoi - Whole-time Director