EKC - Everest Kanto

📊 NSE: EKC 🏢 Packaging 📅 Last Updated: 12/13/2025 22:00

💰 Financial Performance

Revenue Growth by Segment

The CNG segment is the primary driver, contributing INR 588 Cr (64% of total revenue) in FY25 with a 22% increase in volumes. The Industrial segment contributed INR 310 Cr (34%), while the Jumbo Cylinder business accounted for INR 18 Cr (2%). Consolidated revenue grew 23% YoY to INR 1,499.21 Cr in FY25.

Geographic Revenue Split

In H1 FY26, India operations contributed INR 469.3 Cr (62.8% of revenue, up 7.9% YoY), the USA business contributed INR 195.3 Cr (26.1%, up 9.8% YoY), and the UAE business contributed INR 87.2 Cr (11.7%).

Profitability Margins

Consolidated PAT for FY25 stood at INR 98 Cr, maintaining a 6.5% margin, which was at par with FY24. Q2 FY26 PAT margin moderated to 3.8% (INR 13.7 Cr) due to higher operating costs and lower dispatches in the US and India.

EBITDA Margin

Consolidated EBITDA margin was 11.7% in FY25 (INR 176 Cr), a decrease from 13.3% in FY24 due to raw material price volatility. Q1 FY26 saw a spike to 15.85% driven by higher margins in the US subsidiary, while Q2 FY26 settled at 11.9%.

Capital Expenditure

EKC is executing a total capex of INR 320 Cr for new manufacturing facilities in Mundra, Gujarat, and Egypt. This is funded through a mix of 55% debt (INR 176 Cr) and 45% internal accruals, with operations expected to commence by early FY27.

Credit Rating & Borrowing

The company holds a CARE A- (Stable) / CARE A2+ rating. Interest coverage ratio stood at 10.81x in FY25, reflecting a comfortable capital structure despite a slight decline from 16.18x in FY24 due to increased debt for capex.

⚙️ Operational Drivers

Raw Materials

Seamless steel tubes are the critical raw material, accounting for approximately 50-55% of the total cost of operations.

Import Sources

Over 80% of seamless steel tubes are imported, primarily from international markets, involving a significant lead time of 4 to 5 months.

Key Suppliers

Not disclosed in available documents, though the company maintains long-standing relationships with global suppliers for seamless steel tubes.

Capacity Expansion

Current expansion includes a greenfield facility at Mundra for composite cylinders and a new plant in Egypt to serve as a hub for the Middle East and Africa, targeting CNG, hydrogen, and biogas lines.

Raw Material Costs

Raw material costs are highly volatile; while price changes are passed to customers, there is a lag of approximately 3 months, which can squeeze margins during price spikes.

Manufacturing Efficiency

Manufacturing efficiency is supported by a workforce of 756 individuals. The company is investing in 'people and capability-building' in the US to improve cost efficiency and support scale-up.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be achieved through capacity expansion in Mundra and Egypt, diversification into composite cylinders for the automotive sector, and targeting high-growth energy segments like Hydrogen and Biogas. The Egypt plant will specifically target the MEA regional hub demand.

Products & Services

High-pressure seamless cylinders for CNG and industrial gases (Oxygen, Nitrogen, Argon, Helium), jumbo cylinders, cascades, jumbo-skids for bulk transport, and fire safety equipment.

Brand Portfolio

EKC (Everest Kanto Cylinder), CP Industries Holdings, Inc. (USA subsidiary).

New Products/Services

Composite cylinders and specialized storage solutions for Hydrogen and Biogas are the primary new product focuses, expected to contribute to revenue growth from FY27 onwards.

Market Expansion

Targeting the Middle East and Africa through the Egypt facility and expanding domestic presence in India via the Mundra plant by FY27.

Market Share & Ranking

EKC is one of the leading players in the domestic Indian market for high-pressure seamless steel cylinders.

🌍 External Factors

Industry Trends

The industry is shifting toward eco-friendly fuels with a current growth trend in CNG infrastructure expansion. EKC is positioning itself for the future by investing in Hydrogen and Biogas storage technology.

Competitive Landscape

The industry is regulated with high entry barriers; key competition comes from other specialized cylinder manufacturers, though EKC maintains a leading domestic position.

Competitive Moat

The moat is built on high entry barriers due to stringent safety regulations and quality standards (PESO) for high-pressure vessels, combined with 40+ years of manufacturing experience and established customer trust.

Macro Economic Sensitivity

Highly sensitive to natural gas pricing policies and crude oil indexing, which affects the adoption rate of CNG vehicles.

Consumer Behavior

Increasing consumer preference for CNG due to lower operating costs compared to petrol/diesel, though this is sensitive to the price gap between fuels.

Geopolitical Risks

The Russia-Ukraine war previously caused gas price volatility; future disruptions in the Middle East could impact the Egypt project's stability and supply chains.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with strict quality and safety standards for high-pressure cylinders. CNG pricing is now indexed to crude oil with a floor and ceiling to stabilize demand.

Environmental Compliance

Environmental risk is rated as low because the manufacturing of seamless cylinders does not cause significant air or water pollution.

Legal Contingencies

The company faces infrequent litigation related to commercial or contractual matters; however, no specific case values in INR were disclosed in the documents.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility and the successful ramp-up of the debt-funded Egypt and Mundra projects are the primary uncertainties, with potential margin impacts of 2-3%.