PREMEXPLN - Premier Explosives Ltd. Share Price

Management's outlook for Premier Explosives Limited indicates a positive trajectory despite a dynamic operating environment. The company reported an outstanding order book of INR 1,294 crores, which is 3.1 times the financial year '25 revenue, providing robust medium-term visibility. A significant order valued at INR 429 crores was secured from the Ministry of Defense for chaffs and flares, reinforcing their leadership in countermeasure systems. Management highlighted ongoing demand across defense and explosive segments and expressed confidence in their growth trajectory.

Key forward-looking points from management include:

1. Anticipated revenue contribution from the newly secured contract: Approximately 50% of the INR 429 crores order from October is expected to be executed within the next financial year.

2. Revenue projections from enhanced capacity: The expansion of RDX and HMX manufacturing is expected to contribute around INR 150 crores to INR 200 crores in FY '27, with operational commencement planned for Q1 FY '27.

3. Guidance for financial year '26: The management has revised its revenue guidance to INR 500 crores to INR 550 crores, with expectations to meet this target dependent on timely inspections and deliveries related to ongoing contracts.

4. Capex plans for FY '27: A budget of INR 60 crores is allocated for expansions in Katepally and PDK, focusing on manufacturing capabilities for propellants and rocket motors.

5. Profitability expectations: Management anticipates EBITDA margins between 15% to 20%, influenced by product mix and ongoing projects.

Overall, the management remains optimistic about continuing to drive execution excellence and expanding their global presence while navigating challenges in defense procurement and raw material volatility.

1. Question: "What is the discrepancy in the order book? You reported an inflow of INR519 crores, but it seems only an increase of INR85 crores was added."

Answer: No, the INR430 crores came in October, which was included in our last call's figures. The current reported numbers reflect orders as of February 15, 2026, and include all data points up until now.

2. Question: "What is the status of the RDX, HMX expansion at Katepally?"

Answer: The civil works for the expansion are complete, and equipment installation is ongoing. We expect production to commence in the first quarter of FY '27, contributing around INR150-200 crores in that fiscal year.

3. Question: "For the October order of chaffs and flares, how much of that will contribute to FY '27 revenue?"

Answer: Nearly 50% of the order must be executed within one year, meaning a significant part will be reflected in FY '27, although some revenue will also be from the current financial year.

4. Question: "Do you still expect to meet your guidance of INR500-550 crores for FY '26?"

Answer: Yes, as long as inspections and deliveries to the Ministry of Defense proceed smoothly. We have pending stocks that need to be completed by the end of the fiscal year.

5. Question: "Can you elaborate on the anti-personnel and anti-armored vehicle mines as part of your product offerings?"

Answer: We are executing an existing order for these mines, having completed about 50% so far, with the remainder currently in delivery and inspection phases.

6. Question: "What has led to a lower order booking in Q3?"

Answer: Our order book is healthy at INR1,290 crores, with no significant decline. New orders, including the October order of INR430 crores, contribute positively to our pipeline.

7. Question: "Can you provide the breakup of exports and domestic sales in the current quarter and nine months?"

Answer: For the nine months, our exports total around INR40 crores. In the current quarter, the domestic and export figures are INR40 crores and INR16 crores, respectively.

8. Question: "What is your revenue guidance for FY '27?"

Answer: We expect to achieve a turnover between INR500-600 crores for FY '27, factoring in current challenges and our experience from FY '26.

9. Question: "What is the capex guidance for FY '27 and FY '28?"

Answer: For FY '27, we estimate a capex of around INR60 crores, focused on expansions in Katepally and PDK. No specific plans for FY '28 have been finalized yet.

10. Question: "What cash conversion cycle do you expect moving forward?"

Answer: We aim to maintain our improved cash conversion cycle of around 90 days. This may vary based on product mix and the specifics of Defense procurement processes.