M & B Engineering

Basis of our Recommendation

M&B Engineering's management has expressed a bullish outlook, driven by a structural shift towards steel-based construction and strong export demand, which are expected to support a targeted 25% revenue growth in FY27. The company's strategic capacity expansion, particularly in Sanand and Cheyyar, aims to alleviate current utilization bottlenecks and enhance operational efficiency. However, management has adopted a cautious stance on margin guidance due to volatility in international freight costs and geopolitical uncertainties. Vista's financial outlook aligns with these developments, projecting stable margins and a robust revenue trajectory, supported by a favorable industry backdrop characterized by increased investment in infrastructure and a recovery in project awards. The anticipated growth in high-margin export markets and domestic segments like data centers further reinforces Vista's positive valuation outlook, with an expected upside of approximately 61.85%. Over the next 12-24 months, key opportunities include the expansion into high-growth sectors and the potential stabilization of input costs, while watchpoints include geopolitical risks and competitive pricing pressures that could impact margins