Great thread !
Had I not read this thread while understanding Interarch or EPACK, I would have missed so many perspectives. I think, inside the commodity business someone with a large Staying Power, Big Capacity and Design Engineering strength will become from small=>mid=>large. In my opinion as well, the valuations of 30-40x of earnings are pretty high and I will personally wait for infrastructure slowdown; giving lower growth to PEB sector and hence lower multiples to wait for an entry.
I am also assuming, what happened with RCC and Cement sector in the last decade, would also happen with PEBs in the long run, consolidation in the sector, great volume growth, might not result in equivalent revenue and profit growth, also a well diversified / distributed player with factories/assembling units would win the race as even though logistics cost might not be a great challenge (like Cement) but quick availability would give the large player/ well distributed player some edge.
pardon my ignorance/lesser knowledge.
Thank you for such an insight. I had just a small query, you said 30-40X PE is high for these companies, then what according to you shall be a reasonable PE ?
Secondly, when you say infra slowdown, can u highlight basic traits of such a slowdown, so that we can understand its actually a slowdown, because when we see private capex, it already saw a dip in fy25 (CY2024 Post- election). At that time people said that earnings of companies were not transformed into a capex of same level. Since then we have seen government has been pushing hard to revive economy ( and even capex, though indirectly) , donât you think we can see a growth in infra in upcoming time ?
Well this was just my view, would love to hear yours.
Thank you
Is it common to not disclose client name?
yes. its totally as per the contract between the 2 companies.
Indian steel prices are increasing in early January 2026, driven by the governmentâs recent imposition of a safeguard duty (12% for the first year) on steel imports, making domestic steel more competitive and boosting producersâ margins. Will this affect interarch and other PEB companies in the long run?
- none of the companies (to my best of knowledge, & I may be wrong) are backward integrated in PEB space, so definitely they wonât be able to increase their margins forsure.
- I guess these companies have pass on clause in case Raw material price increases.
- They mostly buy Steel/Raw material according to contract received. So Inventory days hover only about 60-70 days.
- In such scenarios, margins may âOPTICALLYâ look lower (degrowth in %) while Top-line would look growing. Q4 would look like this. But since these all are forward contracts, absolute numbers would show healthy growth.
In recent few years what we saw might be the peak margins? I saw in the last 10 years that 10-11% are the highest OPM while they went to as low as 2% in 2019 and in 2020. So can this be the reason for the correction and de-reating? Market maybe expecting the margins to come down because the company is already at âpeakâ margins historically.
So the company is doing a QIP any further details on this - reasons and objective, size of QIP. https://www.bseindia.com/xml-data/corpfiling/AttachLive/a9435d14-768e-413a-a56b-79fcbecaaf4c.pdf
- About backward integration : As defined in Q2 FY26 Concall, of Interarch the management explained how they manufacture 99% of building parts in house, no prefab stays in inventory. It is so because Different PEB has different requirements. Every part of building is designed in house by their engineers, and later its efficiently produced within the company itself and also it is largely erected by companyâs employees on site ( except few works such as base building which is generally done by civil contractors) just steel is procured as a raw material from outside. So we already see everything is done in house, then can u clarify which sort of backward integration are you talking about? ( would love to hear that to build more understanding of this sector)
- About passing of price rise to customers, here they have a bit disadvantage because they have to give one price (estimated one) to customers. That includes, raw material, engineering & design cost. So on this matter there estimate have to be up to the mark.
I think market is beating stocks due to expected rise in steel prices (due to recent metal rise + Import duty hike on finished steel products which are raw materials for interarch)
So we can see margin crunch on existing & onboarded contracts(orderbook) , which means margin crunch maybe visible for next 6-9 months. But beyond that if new orders come in they will primarily be on new steel prices, which means company may recover its margins.
As interarch management comments that they are targeting to increase OPM in long run (they must have something in mind) . But we can say it that in near terms yes, OPM might crunch & so is market beating the PEB Stocks, but this Margin crunch will remain there (fallen) it can not be said yet. Because if we see E-pack prefab & M&B they have good margins, so it can be assumed that it is achievable for interarch as well.
Also Interarch management informed that since they have been investing in capacity, training of engineers etc. They couldnât expand margins, but once the operating leverage comes in , we can see margin rise.
Letâs see what happens next
Also we have a good news for PEB :
Manufacturing Boost = Potential Demand for PEB
Interarch Q3FY26 Result Update
Strong quarter. Revenue up 44% YoY to âš522 cr, PAT up 32% YoY to âš37 cr.
Margins stable despite higher execution and manpower costs.
9M FY26 PAT at âš98 cr (+41% YoY) shows consistent growth momentum.
Order execution remains strong. Capacity expansion (AP Phase 2 + Gujarat land) signals confidence in demand.
QIP of up to âš100 cr likely for growth capex.
One-time labour code impact and ongoing IT search remain monitorables.
Overall: Healthy growth + expansion mode + execution strength intact.
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Approved purchase of land in Kheda, Gujarat â New manufacturing plant. -
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Approved Phase 2 of Andhra Pradesh plant.
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Approved QIP up to âš100 Cr.
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CEO Manish Garg appointed as Executive Director (5 years).
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âš3.24 Cr exceptional expense due to new labour laws.
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IPO money âš30 Cr still unutilised.
PEB can be the biggest boom in next 2-3 years. Primarily because since all Trade deals are taking place, we can see manufacturing side of India getting huge benefits in next few years.
Even the measures taken by Indian Government (during US Tariffs announcements) to protect the domestic economy, has given a strong push to consumption (that in turn pushes the manufacturing).
So, overall manufacturing boost can be seen in next few years, hence directly benefiting PEB sector.
There isnât enough historical data for this company.
From ipo prospectus we got to know only the sales and profit numbers since Covid.
Anyone has visited the company or met manager or have some insights on how the numbers were before Covid? Maybe 3 to 5 years before covid?
Well The capacity expansion timeline can answer your question.
It has started picking up only since 2024 after a long gap, and in 2026 I think they are doing a massive capacity expansion in their entire history.
Anyone who heard the concall of interarch ? because it is falling consistently after concall, is there any negative update or any QIP price that has been announced ?
SBI Bank The largest lender has confirmed in its recent results, about loan growth derived by increasing private capex. Even Bank of Maha has the same view
I read the recent concall and have observed that the stock price has gone down by around 10% post the concall inspite of the US trade agreement.
In my limited understanding here are the three reasons which could be hurting the sentiments
- Company has announced QIP of 100cr, management said that this is required for capex only and not for working capital requirements, 2 new plants are getting commissioned by Q2FY27. One of the plants is a AP plant 2 for heavy structures this is where management have said that they are not totally confident that the demand will come in immediately after commissioning but they feel that it is better to have the capacity so as and when demand comes company is ready to execute. The capacity of this plant is also huge around 40000 tons
- Order book muted . There is no substantial growth in the order book for which management has clarified that though booked Order is less but executed Order YoY is quite substantial ( 363cr Q3FY25 vs 522cr Q2FY26), also company is deliberately not taking new orders as they want to focus on execution also no big company will place a long term ( more than a year )Order for a PEB so company is increasing capacity for timely execution and to increase Order intake but the new capacity is only due by Aug-Sept 2027 so Order book will be limited till then.
- Steel price inflated . This is the 3rd reason I feel which is hurting the sentiments as the prices of steel have increased more since last quarter there is a possibility that the margins might be affected but in the concall the management has clarified that they are aware of the prices and acknowledge that commodity is a cyclical play and they anticipate the cycle and prepare a quote accordingly to protect the margins.
I believe that by end of Q2FY27 we will get clarity as the capacities will be added the more orders and executions will follow also we will know if there is indeed heavy demand for the new heavy structure plant so to track the utilisation of this plant will be interesting.
Disclosure : Not sebi registered, not a buy/sell recommendation. I am invested so maybe biased