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Welcome to the 24th edition of Investor’s Edge!
This issue shines a spotlight on India’s Pre-Engineered Building (PEB) sector, where three companies Interarch, M&B Engineering, and Pennar Industries are emerging as clear leaders in a market gaining momentum from industrial capex and infrastructure revival.
We analyze their Q1 FY26 results and concalls, breaking down who’s gaining ground, what’s powering their growth, and which trends could set the pace going forward. Whether you're watching order books, capacity expansions, or export push, this edition unpacks the heartfelt stories behind the numbers.
Interarch management says - The client in most cases will look at our capability and ability to do the job rather than being an L1 kind of a situation. Pre-engineered building is not really an L1 business. It is like a capital goods industry. That is why we repeatedly keep saying we are like a capital goods partner to the customer that we deal with. Most of the time we come in even before he has finalized his capital goods, his plant and machinery, so that he knows that yes, this project can be done in a certain time.
Interarch management says - So, today out of the three semiconductor plants coming up in India, two of them we are working on. Tata Electronics, we are doing a plant for them, which they will use for making phones, etc., There are three lithium battery plants done in India. All three we have been involved in. Exide, Amara Raja, as well as now Agratas, which is a Tata project. We have done a data center.
M&B Engineering management says - “So you see, last year, we just started effectively exporting to US, so we did about Rs. 65 crores last year. This year, as we speak, as Keyur explained, about Rs. 15 crores of dispatches have already been made, but which will be obviously booked as revenue in Q2. Another Rs. 125 crores of export orders are on hand and some, at least an equal amount of export orders are expected to come over next couple of months, 2-3 months and we did about Rs. 3 crore Q1 actual sale booking. So we have said about 3x at least of last year to export this year. Again, we are adding Canada, we exactly don't know how big Canada can be. But I think Canada is also very exciting. And then we have to add Africa in next 1 or 2 years. So next 2 years, we want to target at least 20% of our topline to come from exports, even after factoring full domestic growth
Interarch management says - Also, we are getting more and more into exports, especially the US and Canada, in spite of the fact that there are these tariffs issues coming up. But most of the buyers that we are in touch with, are very bullish that it can be done and pricing or tariffs will not be an issue, because there 1s a huge shortage of supply of these kinds of buildings in the US, and they feel that Interarch can be a very good supplier from India.
Interarch management says - “And you have to be also very careful that your working capital cycle, your advances, your payments come on time, how you stock, because we have to buy materials from these steel companies, which are not very reliable suppliers, and still supply a complete building, which could use 10-15 different types of raw materials and thicknesses and types to be able to supply the building complete and in sequence. We cannot supply the building as we want. We have to supply it in sequence so that it keeps getting erected. And every part of that building, including a clip or a nut can delay your scheduling if you miss that out. So, all these things are very critical.”
M&B engineering management says - “ Now, important factors out of which is, say, first is inventory we have mentioned in our presentation and all. Say, important factor is creditors put together with buyers credit, which constitutes and defines the total ultimate working capital cycle. Our current days for working capital, which is trade creditors and buyers’ credit is 98 days. So we have 98 days creditors which include import creditors, which 90 days in open credit plus 180 days in buyers credit. So this is the defining factor. And in all, we have 55 days of the cycle vis-a-vis 32 days of the cycle. If you want any specific. “
Pennar management says - “ we had a significant labor supply constraint, which impacted our ability to meet our own internal targets -- our internal plan targets. These challenges have now been resolved, and that positions the BU for a very strong second quarter on the back of our improved capacity utilization.”
Interarch : “ Our order book as of 31st of July stands at Rs.1,695 crores, reflecting a strong pipeline going forward. We secured orders worth Rs.452 crores between Ist May till 31st July, three months. “
Pennar industries : “ Our Raebareli is fully functional, and we have started yielding the growth and we are poised to even higher growth as we speak. We had our US operations from PEB also growing well. And the order book now stands at USD54 million and India PEB order book close to INR855 crores. “
Interarch management says - “So, I think Pipeline-I currently could be in the range of about maybe Rs.2,500 crores and then we have another pipeline which sort of is more orders which are like six months to 18 months finalization. Pipeline-I is normally within six to eight months they will finalize the order, not longer than that. So, that 1s Rs.2,500 crores. Pipeline-II could be I think currently as much as Rs.4,000 crores, which are orders in where we have given estimates, not done the design engineering, a lot of discussion and meetings are still to happen. So, one would say Rs.2,500 crores to be finalized between one to six months and another Rs.4,000 crores to be finalized between now and 18 months. “
M&B engineering management says - “ one of the large automobile companies. We are setting up a complete line for them. There are a couple of large projects like I can say right now Vishakha Glass is one of the large glass manufacturing plant for solar that we have done. We are working with a couple of Adani projects as well. Multiple areas right from Adani Green, Kutch Copper Refinery, you call Airports. So we have quite wide data area where we have been working. Currently, we are executing also the largest project that we have done. Currently, we are executing not the largest, one of the large projects in US at this point, which is close to, I would say somewhere around $10 million, approximately”
Pennar Industries management says - “But some of the orders we have received, we have received a INR200 crores order from JSW. We've received from Tata Electronics. We performed in excess of INR100 crores, INR150 crores, I think, INR157 crores. So, Reliance has been in excess of INR300 crores. So the vast majority of our revenue is manufacturing and engineering companies.”
Pennar Industries management says - “We are at 65%. I think in the next quarter, we hit 70%. Our goal is to hit 80% by the end of this year. We're quite comfortable that we'll be able to do that. The order book isn't a problem. Equipment commissioning, capex isn't a problem. I think we put a good team in there as well. We're expanding a team further in the next month or two. Output has strongly grown and it is a profitable factory now. And we're quite confident that it will be a strong driver for our PEB revenue in this fiscal. In fact, from next quarter onwards, but I think you'll be -- you will see strong growth in this business in both Raebareli and the PEB India vertical and frankly, the entire PV vertical in the next -- in Q2. “
M&B engineering management says - “ 72,000 in Sanand, 32,000 in Cheyyar. 1st Phase of 20,000 tons is already commenced implementation in Sanand. It should become operational next June, somewhere next June. And second phase, that Cheyyar will be implemented next year to be made available June 27th.”
Interarch management says - “So, FY26, we have already done a CAPEX of about Rs.40 crores. Because we are now starting two new plants. One 1s going to be in Andhra, and one is going to be in Gujarat. So, they will finish within the next 12 months. So, the CAPEX of both of them together is about Rs.140 to Rs.150 crores. But I think we should be able to spend about maybe 75%, 80% of that by March. So, let us say about Rs.120 crores of new CAPEX and Rs.40 crores we have already done. So, let us say a ballpark figure of Rs. 150 crores CAPEX by March next year.”
M&B engineering management says - “ So our US margins, EBITDA margins stand at any point between 25%-27%. When we combine that with our Indian margins, which stand at around 10%-11%, the weighted average comes to around 13%-14%.”
Interarch management says - “What happens in this market is that especially last four or five years, our positioning in the customers mind and the kind of customers we deal with is that we are one of the top two companies. Kirby is there, which is from Kuwait, unlisted, but a very large group in Kuwait and us. So, most of the large enquiries and orders are coming to either of us or many times both of us. The projects are very large, and both the players get a part of the order, or maximum it goes to maybe a company like Zamil or something, or sometimes the simpler building depending on location to MB Engineering, which has come in now or Pennar or even Everest sometimes. So, we feel that at that level, we have to maintain our competitive strength by giving the customer a great value add, great design, delivery, quality, that is what he is looking at. If you look at the (PEB), Pre-Engineered Building, it is not even 10% of the CAPEX of a company. If I am spending Rs.100 in my CAPEX, PEB will never be more than Rs.8 to 10. So, I am not going to be very fussy. Of course, I want competition and I want the best price and I want to save, but I am not going to save money at the cost of my project. “
Our US exports are subject to sectoral tariffs, which is borne by the US customers. This sectoral tariff was first introduced by the US government under Mr. Trump way back in February of 25, which was initially 25%, and then towards the end of May, June, beginning June 2025, it was increased to 50%. Here, I wish to clarify that the 25% reciprocal tariff recently announced effective 18th August is not applicable to us, since we fall under the sectoral tariff of 50%. We believe that in spite of the tariff and the higher freight cost that is involved in delivering the PEBs to the US, we are still price competitive as compared to the prices quoted by the US manufacturers, and our margins in the US are still higher than the margins earned in India
The PEB sector is quietly stepping into the spotlight. Interarch and M&B Engineering are proving how strong order flows can translate into sharp earnings growth, while Pennar shows that consistency also pays in this space. For investors, the message is clear — as India builds faster and smarter, the companies building those structures are set to grow even stronger.
For more such insights and deep dives across sectors, keep following Investor’s Edge. We’ll continue bringing you sharp, timely updates that matter for your investing journey. Stay tuned and keep reading us at soic.in.
Disclaimer: This blog post is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
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