Whalesbook
📉 The Financial Deep Dive
Everest Kanto Cylinder Limited's unaudited financial results for Q3 FY26 reveal a notable divergence between revenue and profitability. On a consolidated basis, income from operations stood at Rs. 365.1 crore, a slight decline of 0.5% Year-on-Year (YoY). However, the company demonstrated robust operational efficiency and pricing power, reflected in a dramatic 48.4% YoY surge in EBITDA to Rs. 59.2 crore. This translated into a significant improvement in the EBITDA margin, which expanded by 534 basis points (bps) to 16.2%.
The bottom line saw even more impressive growth. Profit After Tax (PAT) more than doubled, jumping 98.9% YoY to Rs. 35.7 crore. This outpaced revenue growth considerably, leading to a 489 bps expansion in PAT margin to 9.8%.
On a standalone basis, the performance was similarly strong. Income from operations grew 1.1% YoY to Rs. 247.0 crore. Here, EBITDA surged 56.2% YoY to Rs. 57.0 crore, with the EBITDA margin exhibiting exceptional expansion, climbing 812 bps to 23.1%. Standalone PAT rose 57.6% YoY to Rs. 36.0 crore, accompanied by a 522 bps jump in PAT margin to 14.6%.
For the nine months ended December 31, 2025 (YTD), consolidated revenue grew 3.3% YoY to Rs. 1,112.4 crore, while consolidated EBITDA and PAT saw healthy increases of 21.5% and 19.5% respectively. Standalone YTD figures also painted a positive picture, with revenue up 5.5%, EBITDA up 60.7%, and PAT up 37.0%.
💰 Income Statement Drivers
Management attributed the substantial profitability boost primarily to improved realisations, a favourable product mix, and continued cost discipline. These factors were crucial in overcoming the slight dip in consolidated sales volume and driving margin expansion across both standalone and consolidated operations.
🏗️ Strategic Investments & Expansion
The company has laid out ambitious expansion plans. Capex approvals include USD 5.5 million for its US subsidiary to enhance capabilities in larger diameter and Type 4 cylinders, and Rs. 30 crore for its Mundra facility in India to further strengthen capabilities. Additionally, the Egypt facility is progressing steadily, with commencement of operations expected by May 2026. The first production line at Mundra is operational, with two more slated for the coming months.
🚩 Risks & Outlook
While the current results highlight strong profitability improvement, the slight YoY decline in consolidated revenue warrants monitoring. The company's outlook remains positive, banking on scaling volumes from new capacities, maintaining a prudent balance between volume and value, and sustaining strong margin performance. The success of these international and domestic expansion projects will be critical for future growth. Investors should watch for sustained volume growth and continued margin strength as new capacities are integrated.