Permanent Magnets Limited: Q4 FY26 Earnings Update

Permanent Magnets Limited saw its standalone revenue for Q4 FY26 climb 47% year-on-year to INR 66 crore. For the full fiscal year FY26, standalone revenue increased by 13% to INR 225 crore.

Key Takeaway: Strong Q4 revenue growth, primarily from the Alloys division, was reported. The Relays project's timeline has been extended to the second half of FY27.

Q4 and Full-Year Performance

Permanent Magnets Limited (PML) announced its Q4 and FY26 financial results on May 18, 2026. The company's standalone revenue for the fourth quarter of FY26 jumped 47% compared to the previous year, reaching INR 66 crore. Over the full fiscal year FY26, standalone revenue saw a 13% increase, totaling INR 225 crore.

PML noted improved top-line growth in the latter half of FY26. This was largely due to the Alloys division, which benefited from a recovery in exports and steady performance in electricity meter and automotive sectors. Full-year EBITDA margins for FY26 improved to 17% from 14% in the prior year, attributed to a better product mix and increased revenue in H2 FY26. While Q4 FY26 EBITDA margins were 15%, they showed year-on-year improvement despite a slight sequential decrease.

A new furnace in the Alloys division, which began commercial operations in Q4 FY26, positively impacted results. However, the commercial launch of the Relays project is now expected in the second half of FY27, later than initially planned, due to extended customer testing and approval periods.

Quantum Magnetics Phase 2 capital expenditure, which includes block cutting, machining, and surface treatment, is scheduled for Q3/Q4 FY27. The company is also considering further investments for a powder-to-block manufacturing project.

Growth Outlook and Investments

The robust Q4 performance signals positive momentum for PML, particularly within its Alloys business. The company projects a significant revenue expansion of 20-30% for FY27. This growth is expected to be driven by the scaling up of operations in the Alloys, Relays, and Quantum Magnetics divisions. PML plans to invest approximately INR 40-50 crore in its own business and a similar amount for Quantum Magnetics, indicating substantial capital allocation for future growth.

While the delayed commercial launch of the Relays project to H2 FY27 is a factor to watch, the company's efforts in import substitution and its exploration of opportunities within the Rare Earth PLI scheme could offer long-term value.

Financial Highlights and Previous Context

In FY26, Permanent Magnets Limited's total revenue was INR 225 crore, with full-year EBITDA margins at 14%. The company had previously anticipated an earlier start for the Relays project's commercial operations. The Rare Earth Magnet plant recorded no revenue in FY26, partly due to restrictions on magnet exports from China.

Key Changes and Future Plans

Following the Q4 FY26 results, PML has set an ambitious growth target of 20-30% for FY27. The company is actively initiating capital expenditure to support growth across its Alloys, Relays, and Quantum Magnetics divisions. Decisions regarding participation in the Rare Earth PLI scheme are anticipated shortly. Commercial sales from the Rare Earth Magnet plant are targeted for Q4 2027.

Potential Risks

Key risks to monitor include the extended timeline for the Relays project's commercial ramp-up to H2 FY27. Competition in the Quantum Magnetics (rare earth) sector is also a potential concern, though it has not fully materialized. Historical Chinese export restrictions on rare earth magnets also highlight geopolitical dependencies.

Market Positioning

While detailed peer comparisons were not provided, PML noted that several companies are active in the Alloys division. PML is focusing on specific market segments and import substitution. In the Quantum Magnetics (rare earth) area, competition is anticipated, particularly with the introduction of the PLI scheme involving larger players.

Key Metrics and Timelines

• Q4 FY26 Revenue: INR 66 crore (+47% YoY)
• FY26 Revenue: INR 225 crore (+13% YoY)
• FY26 EBITDA Margin: 17% (vs 14% YoY)
• Q4 FY26 EBITDA Margin: 15% (Improved YoY, moderated sequentially)
• Relays Project Commercialization: Scheduled for H2 FY27
• Quantum Magnetics Phase 2 Capex: Expected Q3/Q4 FY27
• FY27 Revenue Growth Target: 20-30%
• FY27 EBITDA Margin Outlook: 15-17%
• FY27 Capex (PML Business): INR 18 crore (Alloys)
• FY27 Capex (Total PML + Quantum): INR 40-50 crore each
• Rare Earth Magnet Plant Sales Target: Q4 2027

Investor Focus Areas

Investors should closely track the progress of the Relays project's ramp-up, PML's involvement in the Rare Earth PLI scheme, and the execution of capex plans for the Alloys and Quantum Magnetics divisions. Monitoring revenue and margin performance across these key segments in upcoming quarters will be essential.