GMM Pfaudler reported a stable quarter in revenue and profitability but marked an excellent quarter for order intake, setting a strong foundation for FY27. The order backlog reached a record high of INR 2,205 crores, up 27% year-on-year. Revenue grew 8% and EBITDA 14% on a nine-month basis, supported by significant diversification into non-traditional industries.
Q3 FY26 Performance Overview
GMM Pfaudler management confirmed continued momentum during the Q3 FY26 earnings call held on February 6, 2026. The quarter was stable for revenue and profitability, but order intake was exceptionally strong, positioning the company favorably for the next financial year.
Financial Highlights (Nine Months Ended Dec 31, 2025)
- Revenue increased by 8% year-on-year.
- EBITDA grew by 14%.
- Margins remained stable or slightly improved over the previous period.
Order Intake and Backlog Strength
Order intake for the quarter stood at INR 961 crores, marking a 9% sequential growth and 20% year-on-year growth. Consequently, the nine-month order period showed growth of about 16%.
The current order backlog is a major comfort point, standing at INR 2,205 crores, the highest ever recorded, representing a 27% increase compared to the previous year. Management expects Q4 to maintain this momentum, leading to a 30% higher backlog entering the next financial year.
Strategic Diversification Gaining Momentum
A key strategic success highlighted was the diversification away from traditional chemical and pharma segments. Management noted that 50% of the order intake and the corresponding backlog over the last nine months came from non-traditional industries.
Geographically, the global environment remains challenging, particularly in Europe due to slow chemical markets. However, India continues to improve, driven by investments in pharma, oil and gas, and nuclear sectors. Growth in American markets is also being observed.
Specific Segment Contributions
- Systems Business: Saw significant order intake in Europe, driven by increased defense spending.
- Heavy Engineering (HE): Positioned for growth in oil and gas, nuclear, and metals/minerals, with management projecting capacity to handle up to INR 600 to INR 700 crores from the current site.
- Edlon (Semiconductors/Nuclear): The US unit is performing well, with an expected revenue of USD 25 million, backed by new investments spurred by the US Inflation Reduction Act.
- Mixing/Interseal: Management expects further growth and marginal improvement from this platform, which includes recent acquisitions like MIXEL and MixPro.
Exceptional Items and Cost Restructuring
Two exceptional, one-time items impacted the current quarter’s results:
- German Restructuring: A cost-reduction program at Pfaudler GmbH resulted in an exceptional impact of INR 44 crores, related to staff downsizing (a 25%-30% cost reduction over two years).
- New Labor Code (India): This resulted in an impact of INR 13 crores.
The structural cost improvement from the German downsizing is expected to phase in over two years, providing an estimated INR 15 crores to INR 17 crores in annualized savings starting in FY27, with total savings projected above INR 40 crores once all FTE phased-outs are complete.
Margin Outlook and Guidance
Management reaffirmed its mid-term target to achieve an EBITDA margin range of 16% to 18%. This improvement is expected to come from increased share of higher-margin non-glass-lined businesses (mixing and sealing) and turning around underperforming glass-lined units, such as the German facility.
Regarding future revenue growth guidance, management preferred to wait until the next quarter to provide specifics, emphasizing that order intake for Q4 remains critical to setting the starting backlog for FY27.
Source: BSE
