Premier Explosives (NSE:PREMEXPLN) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Conference Call hosted by Premier Explosives Limited. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now have the conference over to Mr. From Stellar IR. Thank you and over to you sir. Thank you, Steve. Good afternoon everyone. I on behalf of Stellar Investor Relations, welcome you all to the Premier Explosives Q1 FY 'twenty seven Earnings Conference Call. We shall be sharing the key operating and financial highlights for the first quarter ended on 06/30/2026.

0:52 Today, we have with us the senior management team of Premier Explosives. Mainly, have Mr. TV Choudhry sir. He is our managing director. Along with we have Mr. Vijayaji Kumar. He is our chief financial officer. Before we begin, I would like to state that this call may contain some of the forward looking statements, which are completely based upon the company's beliefs, opinions and expectations as of today. The statements made in today's call are not a guarantee of future performance and also involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward looking statements to reflect development that occur after the statement is made. Document relating to the company's financial performance, including the investor presentation, has already been uploaded on the stock exchange.

1:40 With that, I now invite Mr. TV Chaudhry, sir, to share his opening remarks on the company's performance for the first quarter. Thank you, and over to you, sir. Thank you, Mr. Akhlish, and good afternoon, everyone. I welcome you all to the earnings conference call of Premier Explosives for the first quarter ended 06/30/2026. Thank you for joining us. I trust you have reviewed our Q1 financial year twenty twenty seven results along with the investor presentation available on the stock exchanges and on our website. During Q1 FY twenty twenty seven, we reported revenue of crores, reflecting a decline of 28% year on year. The quarter was impacted by delays in dispatches and project execution, primarily due to ongoing global headwinds and supply chain disruptions across certain programs.

2:39 While these factors affected near term revenue recognition, the underlying demand environment for our products and solutions remains robust. On the profitability front, operating performance was impacted by elevated raw material costs amid prevailing global market conditions. The increase in input prices created temporary pressure on margins during the quarter. However, we continue to focus on operational efficiency, cost optimization and disciplined execution of mitigate execution to mitigate these challenges. Encouragingly, we believe that many of these external headwinds are gradually easing as supply chain stabilize and execution improve, we expect a stronger operational performance and better revenue conversion in the coming quarters.

3:30 Most importantly, our business fundamentals remain strong. As of today, our order book stands at INR1393 crore with approximately 94% of the order book coming from different segment. The LDR backlog provides strong revenue visibility and reinforces our confidence in the company's growth trajectory. Also regarding the recent acquisition of Apollo Microsystems, acquisition by Apollo Microsystems, we believe this marks a significant milestone in Premier Explosives' growth journey and opens up exciting opportunities for the company. The partnership brings together Apollo's strengths in defense electronics and mission critical systems with Premier's capability in energetic materials, rocket motors, ammunition and propulsion systems, creating a broader and more integrated defense platform.

4:26 For Premier, the strategic benefits are clear, enhanced access to larger and more complex defense programs, stronger technology and R and D capabilities, a wider customer reach and improved operational efficiencies through scale and collaboration. The combined strengths will also strengthen our position in India's growth defense, growing defense indigenization and export opportunities. We believe this partnership will accelerate PREMEX next phase of growth, strengthen our competitive positioning and create long term value for all stakeholders. We remain excited about the opportunities ahead and look forward to unlocking the full potential of this partnership. Now I request Mr. Vijay Kumar, our CFO, to share the financial performance.

5:15 Thank you, sir. Good afternoon, everyone. The result presentation for the quarter ended 06/30/2026, has been uploaded on the stock exchanges and on the company's website. I believe we may have gone through the same. The revenue from operations for Q1 FY 'twenty seven degrew by 28% year on year to INR102.6 crores. For EBT for Q1 FY 'twenty seven, they grew by 80% year on year to INR4.8 crores. The EBIT margin for the quarter stands at 4.7%. Our net profit decreased by 80% year on year to INR 3 crores. The PAT margin for the quarter stands at 3%. Now coming to the order book. The company's current order book stands at INR $13.93 crores, out of which, defense segment order is majority of $130.09 crores, which is equal to 94 percent of the total order book.

6:07 Exposure segment stands at INR42 crores, which is equal to 3% of the total order book and Service segment, which is Operational and Maintenance Services segment stands at INR42 crores, which is equal to 3% of the total order book. This order book reflects the strong growth visibility we see over the coming years. We remain confident that supported by sustained execution momentum, continued development of new products and our ongoing expansion initiatives, the company will continue to maintain a strong growth trajectory in the forthcoming quarters. With this, we will now open the floor for questions and answers. Thank you. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone.

6:56 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. The first question comes from the line of Paras Kulkarni with Ignite Capital. Firstly, on the cost side, we have seen a sharp decline in other expenses from INR 20 crores to INR 11 crores 1Q. So if I were to build it for the entire year, what is the run rate cost do we expect for the full year?

7:51 And also what attribute take to this degree? There are earlier in earlier quarters, were provisions expected credit loss provision and there was a decline in ForEx decrease in ForEx losses. So those are it is not comparable for exact apples to apples. There is a reduction in cost. Okay. So this... Other expense, some sense. Yes. So is it 11 crores sort of sustainable? Yeah. It is... You can say around 9 crores kind of thing. You can see in 06/30/2025 also, it is around 9 crores. So 9 to 10 kind of.

8:42 Okay. Understood. And now coming to the gross margin, you did in your opening remarks that the geopolitical situation affected the margin. So looking at FY 2027, where do we see the gross margin? Do we see that improving sequentially? Or should we maintain the 35% as a decent assumption? Yes. Margins will definitely improve because we have different products and there is book of products. So depending on the dispatches of the product, it keeps on increasing. Yes. I did my order book and execution pattern, we have already discussed this movement of materials and all those goods, use of the contracts that will improve in the coming quarters.

9:34 Okay. So could you please quantify as to whether this is the baseline and we should assume 40% kind of gross margin going on looking at Q4, which way? Even in earlier calls also, we said that we are targeting an EBITDA of 15% to 20%. So I think same line we are trying to achieve it. You mentioned about enhancing your product offerings, and you said that we'll be also looking at drones and UAVs. So what is the current stage of development here? I mean, do... Are we trying to develop our own UAV technologies or or we are... We will be partnering with other companies?

10:21 So could you provide some light? We are not developing our own drone technologies that is for the birds and all those. We are partnering with several drone manufacturing industries for the payloads. We are making the payloads and then participating along with them and as a partner, not an independent stand alone supplier. Okay. Okay. Understood. And now with Apollo taking up I mean, taking over, so do you expect any orders from the Neiman side of the business because they have got good relations with the Navy and they have got orders with respect to sea mines and submarine.

11:15 So do you see any traction going ahead in the order book from level side? Yes. We are hoping that this association will help us to strategically strengthen ourselves. And but the total potential of this will come to know by December only. Okay. Thank you so much. And last question around the export licenses. In fourth quarter, we have talked about around 400 crores of export license we have not received. So when do we sort of have we received them currently? Because last time, we had said that we would be expecting to get those licenses within three to four months. So what is the status there? And what is the export portion which we would be expecting in FY seven from the current order book, the execution?

12:13 Yes. Past one week, we have received several export licenses, and we have also moved out the material from the factories. And some of them are in pipeline. We are expecting them to arrive in one or two days. So it's quite satisfactory, the receipt of export licenses and what material is moving out. All the backlogs of previous quarter, I think, will be completing in this quarter. Okay. So is it fair enough to expect around INR $203,100 crores of export in 27 crores as stated earlier? Yes, we are targeting some 200 crores in this quarter. It's INR 1 and 50 crores to INR 200 crores.

13:01 Understood. Yes. I'll join my team. Thank you for answering. The next question comes from the line of Varun Jain with Northland Capital. So I have a couple of questions. Starting with this July 2023 declares order, this was guided for completion in Q1 FY 'twenty seven and the 30 CR of LD reversal was expected. So any update on that? Yes. LD still is in process. Maybe by this quarter end or by October normalizing, we'll come to know. Think a lot of process are there. It's going on. And as far as the place are concerned?

13:51 Yes. Others in pipeline and we have started production in our own plant and all those. So we are hoping that this will contribute well in the coming quarters. No, no. Earlier order also, are going to complete it in another three to four months. There is a backlog of about INR75 crores. So that will be completed in the next four, five months. So just for clarity, this July 2023 order will get completed in the next four, five months. Is that right? Yes. It. Okay. And sir, earlier management had guided for this $4.30 CR order of October 2025 that approximately two thirds will be done in FY 'twenty seven. So that would be close to $2.85 CR.

14:42 So is that guidance on track? And how much how much did we do in Q1? Q1, it was only INR 21 crores kind of thing. And in the second quarter, we're expecting a better number. And for the entire year, will we do close to $2.85 or something? No, no, had to complete the order before this financial year. So the entire $4.30 CR will be done in FY 2027? Yes. We have the capability like the capacity to do the entire order? Yes, yes. Yes, we have. The shaft material payload, we are dependent on imports, which we have completed, we have executed. The place we do in our own plant, so we have the capability to complete.

15:29 Got it, sir. And sir, on the guidance front, I think in FY 2027, management had guided for INR600 crores, INR700 crores. So we have done close to 103 CR in FY '20... In this q one. So do... In the balance nine months, can we do five, 600 CR more? I mean, is that... Do we have that kind of capacity? And Yes. Capacity was like I explained, we have the capacity for flares and other products to make, whereas for items like shafts, are dependent on imports there. It depends on the conditions prevailing there. But otherwise, slates and other things are made in our own facility and then we'll be able to execute that.

16:17 So you retain the crore guidance for FY 2027, is that right? Yes. Okay, sir. Got it. And sir, last quarter, you mentioned that there was a new alternate raw material, which DRDO you had sent to DRDO for approval, and this was going to be used for these land mines and loitering venetions for drones. Any update on that? There is a considerable progress on it. They have they are conducting the tests of our material what we have proposed, and that is being done by DRDO, ARDE and HMRL. Once it is complete, I think they will give us a clearance to use that material. That will open a door for completely getting into mines that is Adrushi Mines and Ulka mines, which are very much in demand from Indiraupi.

17:16 So by when do we expect like any completion of survey by DRDO? Hardware part, have assembled all together and then other components and then chemicals, it's going on. It may take another six months. Another six months, okay. Got it, sir. And so on the Kartapalli, this CapEx, so we had earlier said that by Q1 end some assets will start commissioning, then by Q2 some will start. So did we see anything commissioned by end of Q1 or even till now because we are halfway through Q2 also? The integration of the pipelines and the plant and machinery erection and installation for the RDX and HMX production is almost complete and then we are expecting to take up the water trials in September month.

18:17 That water trials will take a month and after that it will come into production of the products intended for. Is about RDS and HMX. About mixing plant, where 2.5 tons planetary mixer is installed, some of the components which are imported by the supplier of the mixer, they got delayed because of the moment maritime movement of ships and all those. So now we have put pressure on them and then make them ship it by air. So that also we are hoping that end of September, we'll be ready with the plant and then we'll take up the tummy trials. Got it, sir. And sir, on the Andhra Pradesh, this expansion plan, like after the acquisition of some motor stake by Apollo, are we continuing with it? And have we finalized a land parcel for it?

19:15 Land parcel, the pricing was an issue. We were requesting the government for a reasonable price, which we can afford to install because as a explosive industry, we require large landed areas. Such large area, the price makes a big difference. So we have requested the government for reworking the price and then to give us a better price through which we can gain benefit. So at present, it is at that status. And this expansion will be going on even post like the Apollo will continue with it, right? Yeah. The requirements are there, which definitely I think once they come into the picture, and then we'll be taking a call after making the presentation of our.

20:05 Okay, sir. Got it. And just the last one from my side, sir. What what changes do you expect, like, post Apollo? Like, what... With the new capabilities they bring in, what more can you do, really? Any synergy benefit or any guidance there? We are expecting their capabilities are in the defense electronics. So we are in which area where we have no expertise. So we are expecting that we'll be able to get a good gainful benefits from them with their expertise and then the systems which where you more integrated with the electronics and high energy materials, that's where I think we can definitely we are looking forward to be better strategically beyond to be better on that. These all will come more details will come probably by the next quarter.

20:59 Okay, sir. Got it. Thank you and all the best. Thank you. The next question comes from the line of Chandresh with Diveshay. Please go ahead. Yes. Hi, sir. Thank you for the opportunity. Sir, two questions on the order book side. Can you provide the program wise breakup of the order book? You can only give a breakup of industrial explosives and defense, that we have a 94% defense orders and 6% the regular explosives, industrial explosives. Okay. Sir, secondly, with respect to this project, I mean, BER is also expecting about thirty to forty thousand.

21:48 So on that side, how much is Premier is supposed to be expecting in the QR term category? Couldn't get the question. Could you please repeat? So basically, I mean, the QR, Sam, how much is you are expecting and the... QR, Sam. No. We... If you have participated in a tender and something, then we can say that the tender itself are not yet called. Okay. Got it. Yeah. Thank you so much, sir. Thank you. Participants who wish to ask a question may press star and 1. The next question comes from the line of Parish Kulkarni with Ignite Capital. Please go ahead.

22:39 Yes. Just one question on the order book side. What is the order inflow guidance for FY 'twenty seven? Already, we have INR $13.93 crores. So FY 'twenty seven, we are submitting INR 200 to INR 300 crores. Okay. INR 200 to INR 300 crores. And the integration will be in FY 2027 and so for No, no. All our orders are for next two years. We're expecting a run rate of INR 1,000 crores plus whatever we execute. And after that, it will be Okay. Like Okay. Yes, understood. Thank you. Thank you. The next question comes from the line of Deepak, an individual investor. Please go ahead.

23:31 Hello? Hello? Yes, sir. You're audible. Please go ahead. Okay. Hi. Good afternoon, sir. So I have a particular question on in Q1 FY 'twenty seven, the revenue declined by 28% year on year. Due to the start and execution delays, which specific projects are were impacted and what portion of our deferred revenue is expected to recover during FY 2027? Particularly the export orders what we have, those deliveries were delayed because of the maritime problems. Similarly, some of the components which we are importing for delivery to the finished product that is countermeasures, which are supposed to components are supposed to come from abroad. There also the delays have caused delays in deliveries.

24:28 This is the main reason for the things, which we are expecting to overcome or complete those executions in the current quarter, second quarter that is. Okay. Understood, sir. And in Defense and Space, revenue declined by 35 year on year despite a strong defense environment as you mentioned. Was the only timing related or there have been delay in a customer procurement and acceptance process? Some delays are there, which are because of the delay in getting the export licenses, where the export orders are there. But now, like I mentioned in the beginning, most of the license are received and we are in the process and we hope that in second quarter and third quarter we'll be completing all this.

25:21 Okay. So there are no delay from a customer of the government and acceptance? No. Okay. And what will be the revenue guidance for FY twenty seven? And does management still expect to achieve meaningful growth despite a weak start of this year? Like we mentioned, we are expecting a target of around 600 crores turnover, which is a considerable increase in the previous year, two years if you take it. Okay. Understood, sir. Okay, sir. Thank you for the opportunity. I will run back the queue. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and The next question comes from the line of Arun Chai with Dollar Capital. Please go ahead.

26:23 So just a couple of follow ups. So on this April twenty twenty six three fifty CR international order for defense products, so have we received the export license for this one? It's in process, actually. So like when can we receive export license for this and when will the... Too much we are expecting, yes. Usually, it takes three to four months at least for every processing of export license. And before we submit for processing, we have to receive the import licenses from the importing country. So this process takes time, at least minimum three to four weeks months.

27:11 The importing license, I didn't understand. Why do you need the importing license for this? Other importing. The country where we are going to export, they have to issue an import license to the importer there. Okay. Got it. Got it. So once that comes, then then you start production. So I... Like, is it safe to assume that in this calendar year, there will be no production for this order? Actually, we are some dispatches. Last quarter, got it. And sir, on this bulk explosives business, what is the guidance for FY 2027 and FY 2028 also if you can give?

28:00 It's difficult to predict that FY 2028 because the prices are very much dependent on the raw materials import car prices. So and multiple manufacturing capacities are there at also more than 40 layers in this field. So difficult to predict transaction. For FY 2027, if you can give because I think we are already done with 40% of 2027. So some guidance of what kind of revenue there will be and what is the margin profile right now? Hello.

29:05 Yes. We have an executed contract with Singhalini Kalvir. So the balance part of about 25 crores to 30 crores that will be executed this year, this financial year. So and other than that nothing, just that much? Other than that we have debt net interest orders and all this thing. Also we have export orders. So those things will be continuing. So close to 80 CR, I think we can get right in '27 in this revenue? Yes, just like last year. Got it, sir. What is the margin profile you are getting here right now? Because from what I've heard, like the Coal India and Singh Reni margins have been very, very down.

29:55 They are are good margins. In fact, the Coal India, we have withdrawn last year also and then last year also because of the prices, very low prices. Singer Neeny, yes, we are servicing because we are it is close by. So a little better than Coal India prices, our net cost and all those. But otherwise, yes, margins are very, very thin. Many places, it is negative. It is like low single digit margins then, right? Yes. Got it, sir. And just last one, What is the like in the international market, sir, what is the scenario with RDX and HEMEX supply, demand and pricing? If you can give us some color there. Demand is good, but getting licenses is difficult.

30:49 And pricing of IDH, HMX? Yes, exporting to different countries. So depending on Present because what scenario and all those push the demand up. So for the present, yes, prices are good. May after two years or three years, what happens, we'll have to see that. Can you quantify the prices? Can you give us some band that would be helpful for RDX, HMX, any other major grade of explosives? We are competing in this area also. So we don't want to say anything on that. No. That's the, you know, this is the industry price brand, what what price brand it operates and not not the... You are selling price. You can get easily from the Internet and other places other than.

31:38 Okay. Okay. No issues, sir. That's all from me. Thank you and all the best. Thank you. The next question comes from the line of Deepak, an individual investor. So my question is related to the EBITDA margin that we have seen a drastically decline in EBITDA margin from 15% to 6% in Q1 FY twenty twenty seven. So like can you share the like what's the reason behind? As Ramdesar explained, there is a bucket of bulk of products. So depending on product dispatch, it slightly varies. But overall, our guidance is about 15% to 20% is our yearly target.

32:31 So in this how much margin has been erosion due to like raw material costs and under absorption of fixed cost? The difference what you are seeing is there, but I think in the coming quarters we'll be making it up. Okay. So in this that raw material price has been started normalize? Yes. It is not normalizing, but already we have some contracts are there. So we are to execute them. Once we complete the contracts, we'll be increasing the price also. Okay. So, if the like raw material prices get normalized, what EBITDA margin range we can expect? Is it same like 15% to 20%?

33:17 Right. For this financial. And sir, one last question on order book that we have nearly million to $14,000,000 of our order book equivalent to nearly $35,000,003,600,000 of FY 'twenty six revenue. So what percentage of this order book is executed in like next twelve to eighteen months? As per our turnover, the run rate we are expecting is about INR500 crores to INR600 crores rather INR600 crores we are targeting. So, yeah. INR500 crores to INR600 crores we are targeting in next twelve to eighteen months. Yes. Okay. Okay. Thank you, sir. Thank you so much for the opportunity and all the best for next quarter.

34:05 Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. TV Chaudhry for closing comments. Yes. Thank you, Mr. Ghailesh. And thank you everybody, all the stakeholders for showing interest in the company and then wishing us a good success in the future endeavors.

35:00 Thank you very much. Thank you. Thank you. On behalf of Premier Explosives Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.