MBECL - McNally Bharat

📊 NSE: MBECL 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/14/2025 9:43

💰 Financial Performance

Revenue Growth by Segment

The company operates primarily in a single segment: Construction and Engineering. Standalone revenue for H1 FY26 was INR 3,314.18 Lakhs, representing a 37.59% decline compared to INR 5,310.69 Lakhs in H1 FY25. Q2 FY26 revenue was INR 1,835.46 Lakhs, down 31.82% from INR 2,691.90 Lakhs YoY.

Geographic Revenue Split

Not explicitly disclosed in percentages, but the company has a presence in India and previously Singapore (MBE Mineral Technologies Pte Limited, now deregistered) and Zambia (MBE Minerals Zambia Limited).

Profitability Margins

Operating Profit Margin improved from -2.35% to -0.30% (a 205 bps improvement). Net Profit Margin improved from -10.83% to -5.27% (a 556 bps improvement) due to decreased losses following the resolution process.

EBITDA Margin

Not explicitly stated as EBITDA, but Operating Profit Margin improved by 87.42% relative to the previous year's negative margin, moving toward break-even at -0.30%.

Capital Expenditure

Purchase of property, plant, and equipment was minimal at INR 0.47 Lakhs for the period ended September 30, 2025, compared to nil in the previous year.

Credit Rating & Borrowing

Borrowing costs (Finance Costs) were INR 50.27 Lakhs for the period. Total current borrowings were reduced by 97.06% from INR 3,09,423.86 Lakhs to INR 9,086.62 Lakhs following the NCLT resolution plan implementation.

⚙️ Operational Drivers

Raw Materials

Not specifically named, but typical for EPC business includes steel, cement, and electrical components. Raw material costs are reflected in project execution expenses.

Capacity Expansion

Not disclosed in available documents; focus is currently on project execution and recovering from insolvency.

Raw Material Costs

Not disclosed as a separate line item; however, the company is focusing on a supply chain risk management system to capture macro risks like commodity price variations and WPI Indices.

Manufacturing Efficiency

Inventory turnover ratio improved by 57.96% YoY, increasing from 189.84 to 299.86 times, indicating higher efficiency in clearing project-related stocks.

📈 Strategic Growth

Growth Strategy

The company is transitioning from a cost-minimization EPC outlook to a value-add approach focusing on time-saving and environment-friendly solutions. Growth is supported by the implementation of a Resolution Plan (NCLT order Dec 19, 2023) which cleared INR 3,00,337.24 Lakhs in current borrowings, and digital transformation via Oracle Cloud Infrastructure (OCI) for data-enabled solutions.

Products & Services

Engineering, Procurement, and Construction (EPC) services for the core sector, including mineral technologies and infrastructure projects.

Brand Portfolio

McNally Bharat Engineering Company Limited (MBECL).

New Products/Services

Focusing on environment-friendly EPC solutions and value-added project execution; specific revenue contribution percentages are not disclosed.

Market Expansion

The company has JVs including EMC MBE Contracting Company LLC and McNally-Trolex, indicating historical expansion into specialized engineering niches.

Strategic Alliances

Joint Ventures include EMC MBE Contracting Company LLC, McNally – Trolex, McNally – AML, and McNally – Trolex – Kilburn.

🌍 External Factors

Industry Trends

The EPC industry is shifting toward environment-friendly and time-saving solutions. MBECL is positioning itself to partner with major expansions in the core sector using digital transformation to capture macro risks.

Competitive Landscape

The company operates in a competitive EPC market for core sectors like mining and infrastructure, currently recovering from a period of financial distress.

Competitive Moat

Competitive advantage stems from its long-standing EPC expertise and the successful completion of the Corporate Insolvency Resolution Process (CIRP), which significantly deleveraged the balance sheet (Equity improved from negative INR 5.89 Lakh Cr to positive INR 69,922 Lakhs).

Macro Economic Sensitivity

The company is sensitive to commodity price variations and WPI Indices, which are now being tracked via OCI Analytics Solutions to mitigate project cost overruns.

Consumer Behavior

Not applicable for B2B EPC services.

Geopolitical Risks

Exposure through international subsidiaries in Zambia and formerly Singapore; deregistration of the Singapore entity highlights regulatory risks in foreign jurisdictions.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and SEBI LODR. The company faced a non-compliance notice for Regulation 17(1) regarding the failure to appoint a woman director for the quarter ended Sept 30, 2025, resulting in SOP fines.

Environmental Compliance

The company is shifting its EPC outlook toward environment-friendly solutions to meet evolving industry standards.

Taxation Policy Impact

Income tax refund of INR 87.74 Lakhs was recorded in the cash flow for the period ended September 30, 2025.

Legal Contingencies

Trade receivables, financial assets, and trade payables are subject to the outcome of pending arbitrations and claim settlements. The company implemented a Resolution Plan under NCLT Kolkata order dated Dec 19, 2023, which overrode certain Ind AS requirements for accounting treatment.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty involves the reconciliation and confirmation of trade receivables and advances, which are subject to pending arbitrations. The impact of these adjustments has not yet been ascertained.

Geographic Concentration Risk

Primarily India-based operations following the deregistration of the Singapore subsidiary.

Third Party Dependencies

High dependency on financial creditors for bank guarantee (BG) coverage; creditors maintain a charge over assets until BGs are released or the third tranche of the resolution plan is paid.