M&B Engineering is engaged in providing solutions in pre-engineered building (PEB) solutions and self supported steel roofing solutions to customers across industrial and infrastructure segments. It offer its customers comprehensive turn-key solutions which includes project design, engineering, manufacturing and erection in accordance with customer requirements.

The business of the company is structured into (a) Phenix division which provides comprehensive solutions for PEBs and complex structural steel components; and (b) Proflex division which provides self-supported steel roofing solutions.

Phenix Division has integrated manufacturing operations through which it provide comprehensive solutions to the customers which includes estimation, designing, engineering and manufacturing of PEBs within the controlled environment of its manufacturing facilities, which are then supplied, installed and erected under supervision through on-site project management. As of March 31, 2025, it has an installed capacity of 103800 MTPA for PEB structures and complex structural steel components across Sanand (Gujarat) and Cheyyar (Tamilnadu). The PEB aggregate installed capacity of the company is fourth largest amongst organised players following Kirby Building Systems, Interarch Building Products, and EPack Prefab.

The PEB plants primary manufacture structural members (including main frame columns, end-wall posts, rafters and other main support members), secondary structural members (including purlins and girts, eave strut, cable, angle, pipe, rod bracing and wide bay truss purlins), claddings, and procure accessories (including fasteners, sliding doors, walk-way doors, insulation, glazing windows, roof curb, fixed ventilators, turbo, vents, roll-up doors and ridge vent).

The self-supported roofing solutions capacity as end of Mar 31, 2025 stood at 1800000 square metres per annum. The company manufacture self supported steel roofing through its fleet of 14 mobile manufacturing units. Each of its mobile manufacturing unit is equipped with a panel manufacturing machine, a telescopic crane and other ancillary equipment.

Phenix division over its 15 years of operation have been involved in the execution of over 1,600 projects involving the supply of around 640,000 MT of PEBs and structural steel across a diverse set of customers across end-user industries in 22 countries. Similarly during the 23- year operational history, the Proflex Division have installed over 18.5 million square metres of roofing by being involved in the execution of over 7900 projects across India and catering to its customers operating in diverse set of end-user industries. So over the company have undertaken execution of over 9,500 projects until the end of Fiscal 2025 under its Phenix and Proflex Divisions.

Manufacturing processes of the company are supported by its in-house design and engineering offices at Hyderabad, Chennai and Ahmedabad which enable it to offer comprehensive solutions in the pre-engineered steel construction solutions space and in the self-supported steel roofing space, as well as to continually undertake incremental enhancements and improvements of its processes and designs. As of March 31, 2025, its in-house design and engineering teams consists of 98 employees.

The company have delivered solutions for its customers engaged in diverse sectors including general engineering and manufacturing, food and beverages, warehousing and logistics, power, textiles, and railways.

In FY25, the Phenix division accounted for 77.3% of consolidated revenue from operations and Proflex division by about 22.65%.

In Fiscal 2025, Fiscal 2024, and Fiscal 2023, the company have served more than 2,000 customer groups from across diverse industries in the last three fiscals. Revenue from repeat customers as percentage of consolidated revenue from operations stood at 57.32%, 73.26% and 65.61% respectively in FY25, FY24 and FY23.

The business footprint of the company spans across geographies with the company export PEBs as well as complex structural steel components to 22 countries, including the United States of America. Sales from outside of India stood at 6.53% of consolidated sales from operation in FY25.

The company has planned a capex of Rs 1,30.579 crore over 2025-28 period. Through this proposed capital expenditure, the PEB production capacity of its Sanand Facility will increase from 72,000 MT in Fiscal 2025 to 92,000 MT in Fiscal 2028; and Cheyyar Facility from 31,800 MT in Fiscal 2025 to 76,800 MT in Fiscal 2028.

Earlier the company had acquired 51% in Modtech Machines Private Limited (“Modtech”) through a share subscription cum shareholders agreement dated May 18, 2021 entered into by it with Modtech and its shareholders. However, due to global recessionary conditions in the segment dealt with by Modtech, the company’s performance was impacted. Accordingly, the company exited Modtech by selling its shares to another investor though a share purchase agreement dated May 24, 2023.

The issue, objects of the offer

The offer consists of the fresh Issue of equity shares aggregating upto Rs 275 crore and offer for sale of equity shares aggregating up to Rs 375 crore. Entire portion of offer for sale is made by members of promoters/promoter group.

The company proposes to utilise the net proceeds from fresh issue towards funding 1) capital expenditure requirements for the purchase of equipment and machinery, building works, solar rooftop grid and transport vehicles at manufacturing facilities amounting Rs 130.579 crore; investment in information technology (“IT”) software upgradation amounting Rs 5.20 crore; 3. re-payment or pre-payment of term loans, in full or in part, of certain borrowings availed by the company amounting Rs 58.75 crore; and the balance for general corporate purposes.

Strength

One of India’s leading PEB player in terms of installed capacity in India with a presence in International markets as well.

Comprehensive solution provider as it provide a wide range of specialised products and services.

Order book as of June 30, 2025, stood at Rs 842.838 crore [ Phenix Div 633.566 crore; Proflex Div Rs 209.272 crore], translating into about 0.85 times of its FY25 revenue.

Company’s Sanand plant is the only PEB manufacturing facility in India with a certification from the American Institute of Steel Construction (“AISC”), as per AISC website.

The Indian PEB industry is expected to record a CAGR of 11-12 % over FY2024-29

Weakness

PEB market in the country is intensely competitive with low entry barrier and thus the market share of the unorganized industry in the pre-engineered steel buildings industry is higher at 53-58%. And the business is also working capital intensive due to higher inventory holding.

Loss or decline in the demand of pre-engineered buildings (77.35% of revenue in FY25) on slowdown in industrial capex in the country may result in an adverse effect on business of the company.

Net cash flow from operating activities has reduced over Fiscal 2023 to Fiscal 2024.

Some of the promoters/directors have interest in entities (i.e. Phenix Engineering Services Private Limited and Phenix Building Solutions Private Limited), which are in businesses similar to that of the company and may result in conflict of interest.

Top 1/5/10 customers account for 14.71%, 42.64% and 54.89% of revenue from operations in FY25.

Have not yet placed orders in relation to the capital expenditure for the purchase of equipment and machinery, building works, solar rooftop grid and transport vehicles at its manufacturing facilities.

Contracts of the company with its customers generally do not include a raw material price variation clause and therefore the company is required to maintain inventories of raw materials to ensure that when it submit quotations to a customer for a project, it have a high degree of certainty on raw material prices.

Depend on third-party builders and erectors for timely completion of its projects. Any delay by third-party builders in the execution of projects or adverse relation with such builders could have an adverse effect on the business, future prospects and future financial performance.

Company proposes to expand its capacity through the offer proceeds, despite low capacity utilization levels over the past three years. While capacity utilisation of PEB plant at Sanand was 63.27% in FY25 it was mere 23.34% in FY25.

Have had instance of delays in payments of statutory dues.

Company does not own the logos i.e. M&B Engineering which are used by it for certain business activities.

Susceptible to volatility in steel prices, the major raw material. The operating margins are also volatile.

PEB manufacturing facilities of the company is currently concentrated in Gujarat and Tamil Nadu.

Valuation

Consolidated re-stated revenue stood higher by 24% to Rs 988.55 crore in FY 2025. With OPM expand by 280 bps to 12.8%, the operating profit was up by 59% to Rs 126.38 crore. Eventually the net profit was up by 69% to Rs 77.05 crore.

The EPS for FY2025 on expanded equity at the upper price band is Rs 13.5. The P/E at the upper price band works out to 28.6 times.The company quotes at a P/BV of 2.6 times.

In comparison Interarch Building Products quotes at a PE of 33.9 times and P/BV of 4.9 times. Companies that have a sizeable PEB business such as Pennar Industries quotes at a PE of 27.6 times and P/BV of 3.3 times. Similarly the Everest Industries quote at a P/BV of 1.4 times. Bansal Roofings, a small player quotes at a PE of 29.4 times and a P/BV of 4.9 times.