Ador Welding Ltd (ADOR) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, you've been connected to the Ador Welding conference call. Please stay connected, the call will begin shortly. Participants, you have been connected to Ador Welding Limited conference call. Please stay connected, the call will begin shortly. Thank you.
Moderator: Ladies and gentlemen, good day and welcome to Ador Welding Limited Q2 FY '27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Aditya Malkani, Managing Director and CEO of Ador Welding Limited. Thank you, and over to you, sir.
Aditya Malkani (Ador Welding Ltd): Thanks. You can hear me? I can carry on?
Moderator: Yes, sir.
Aditya Malkani (Ador Welding Ltd): Okay, perfect. Thank you for attending the call. I apologize for the slight delay. We had a technical issue on our side. Good morning and a very warm welcome to everyone present. With me today are Mr. Suryanarayan, our CFO and Head of Strategy; and Mr. Biday, our Company Secretary and Chief Compliance Officer; as well as SGA, our Investor Relations advisors. I hope you have received our investor deck. This year has has been special for Ador. In fact, yesterday, we completed 75 years. In 1951, we became the first India's first welding manufacturer. Today we have five manufacturing units
Aditya Malkani (Ador Welding Ltd): fifty people, a presence in over 1500 companies, fifteen 15 countries and a government-recognized R&D center. To reward our shareholders for their trust, the board has declared an interim dividend of ₹7.5 per equity share. Let me start with the headline. Revenue for the quarter grew about 23% year-on-year to ₹345 crores, and H1 revenue was also up 23% at ₹654 crores. Growth was supported by healthy demand across core end markets, including infrastructure, power, oil and gas, railways, shipbuilding, defence, and heavy fabrication. Strong capital goods activity in India provided a favorable operating environment during the quarter. We also want to address the margin issue directly. Gross margins for the quarter were 34.2%, with input cost inflation, particularly higher. Steel and other raw material prices being one of the key pressures. We have taken calibrated price increases and will continue to do so in a measured manner. Despite this pressure, EBITDA grew 19% in the quarter, and H1 EBITDA margin was 11.2%, slightly higher than last year. Our objective of steadily improving EBITDA margins remains unchanged, although input cost cycles may affect pace of progress in individual quarters. Three drivers underpin this growth, expanding our international reach, improving product mix, and deepening customer engagement. The first part is exports. The Middle East remains our principal international market, served through the Dubai hub. Building on that base, we are expanding our network and evaluating opportunities in Europe to create a broader and more diversified international presence. Product mix, supported by collaborations, our partnerships enable us to offer higher-end welding power solutions as well as mixed solutions. As Hypertherm's master distributor in India, we provide advanced plasma cutting systems. In consumables, we continue to introduce specialised, high-performance products for demanding applications. Third is customer engagement. We're strengthening direct relations with key customers while continuing to support and expand our distribution network. Our technical support training and application teams connect these channels by helping customers select, deploy, and optimize the right solutions. Automation remains a strategic priority as rising labor costs and shortages of skilled welders drive customers large, mid-sized, and small to invest in productivity. Our partnership with Liburdi brings orbital welding technology to the power to the power, nuclear, oil and gas, shipbuilding sectors, helping customers improve consistency, efficiency, and weld quality. On operations, we are investing in new consumables line in line with the capex plan we had shared earlier. These investments will modernize our manufacturing base, support future demand, and improve our ability to scale efficiently. With that, I now open the floor for questions and answers.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, anyone who wishes to ask a question, please press star and one. First question is from the line of Rudraksh Raheja from I-thought Financial Consulting. Please go ahead.
Rudraksh Raheja (I-thought Financial Consulting): Yeah, thank you for the opportunity, sir. I hope hope I am audible.
Aditya Malkani (Ador Welding Ltd): Yeah, go ahead.
Rudraksh Raheja (I-thought Financial Consulting): Yeah, sir, I wanted to get more clarity on the gross margin side. I think you have highlighted in your opening commentary as well that raw material pricing pressure was there, but and we have taken some price hikes. So, how are we thinking on the gross margins line, because they seem a bit on the lower side? So, because of the price hike, should we expect more recovery in the second half?
Aditya Malkani (Ador Welding Ltd): Yeah. So So So let's let's analyze Q2 for for what Q2 is. And if you ask me, approximately 80% of the reason that you're seeing a gross margin dip has to do with quite severe inflation in costs. Across the board, and I think this is a lot of people are feeling it across the board in many ways. I'd say 80% of it stems from there. And about 15-20% stems from an aggressive strategy in terms of a growth plan that we have, which is okay, which does not impact margins very very heavily.
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