Tega Industries FY26: ₹1,692 Cr Revenue, 8.4% Reported PAT Margin, Molycop Deal Closes

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1. At a Glance

Tega Industries closed FY26 with ₹1,692 Cr in consolidated revenue, a modest 3% YoY uptick that masks a sharp deceleration—sales growth has fallen from 12% three years ago to near-zero in recent quarters. Reported PAT margin contracted to 8.4% (from 12.2% in FY25), pulled down by exceptional acquisition costs of ₹775 Cr. Strip those out and the underlying EBITDA margin sits at 22%, a level the company has held for two years but that tells no story of expansion.

The company has just closed the $1.455 billion Molycop acquisition (effective June 1, 2026), adding a global grinding media platform to its mill liner business. This is a transformative bet, but the timing lands hard: Tega carries ₹398 Cr in debt (a low absolute figure), but combined balance sheet debt will spike to ~₹10,000 Cr+, and near-term leverage metrics will remain under water for 24 months before earnings accretion kicks in.

Two teases: an order book at ₹1,206 Cr (with ₹906 Cr executable within 12 months) signals visibility, but consumables volumes—the lifeblood—were flat in FY26 despite order inflow. Logistics delays claimed credit, but the market is watching whether that softness was real or a warning signal.

2. Introduction

Tega Industries, founded in 1976, designs and manufactures specialized consumable products—mill liners, wear-resistant components, hydrocyclones, screening solutions—for global mining and mineral processing. The company holds the #2 global position by revenue in polymer mill liners, a category that benefits from the recurring, mission-critical demand profile of grinding media in copper and gold operations.

FY26 was a pivoting year. Consumables, which once formed 97% of revenue (FY23), now account for 84%, with equipment emerging as a genuine second leg. The company added 8.6 Cr shares via preferential allotment at ₹1,994 per share in November 2025, raising ₹1,713 Cr to help fund Molycop. The CFO, Sharad Kumar Khaitan, departed in May 2026; Shyama Prasad Ganguly stepped in as interim CFO.

Credit ratings firmed: CRISIL downgraded the long-term facility from AA- to A+ (keeping it on Stable watch) in May, while ICRA assigned [ICRA]A+ to new facilities and placed them on Watch with Developing Implications, awaiting deal close. The deregistration of Tega Industries Australia (effective June 2, 2026) signals housekeeping post-consolidation.

3. Business Model: WTF Do They Even Do?

Tega operates on a simple playbook: consumables + equipment, both aimed at the global mining value chain.

Consumables (84% of FY26 revenue = ₹1,421 Cr): Mill liners, wear-resistant composite blocks, and hydrocyclones. These are critical to operate—a mine cannot grind ore without them. Replacement is frequent (every 6–18 months depending on ore hardness and throughput), making the category a revenue powerhouse with 75%+ repeat order rates. Gross margin here hovers near 60%, though EBITDA margins vary by product and geography (Q4 FY26 operating margin was 11%, a seasonal low; Q3 was 28%, more typical).

Equipment (16% of FY26 revenue = ₹271 Cr, up 25% YoY): Crushing, screening, grinding, and mineral processing equipment. Tega acquired Tega McNally Minerals (TMML) in Feb 2023 for ₹165 Cr to get here. Equipment is lumpier—project cycles run 3–6 months post-order—but margins are recovering (PBT margin scaled from 4% in FY25 to 8% in FY26). A new “aggregate business” product line is in the works via a Japanese collaboration, due Q3 FY27.

Geographic spread: 85–90% of standalone revenue is export-driven. Tega operates 10 manufacturing plants across India, Chile, South Africa, and Australia, complemented by sales offices in North America, Latin America, Africa, Europe, and Asia-Pacific. The Chile plant (under construction, 50–60% civil work done as of early 2026) is meant to serve Latin America and copper operations, but revenue is stuck awaiting regulatory approvals—possibly not until end-FY27 or beyond.

Customer base & stickiness: The company serves 90+ countries with 75% repeat orders (baked into contracts and customer relationships). Direct sales model with 160+ sales executives. Order book sits at ₹1,206 Cr (₹906 Cr within 12 months)—visibility out 9–12 months in a bespoke, design-led business.

The tension: Consumables revenue flatlined in FY26 (₹1,415 Cr in FY25 vs ₹1,421 Cr in FY26, +0.4%), while order intake ran strong. Management blamed logistics—vessels, container scarcity, Middle East shipping disruptions—plus the timing of late-year order receipt pushing execution into the next fiscal. But that excuse has shelf life. Molycop is supposed to unlock scale and margin, not just offset volume headwinds.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Key observations from the P&L:

Operating profit collapsed in Q4 (₹60 Cr vs ₹150 Cr, Q4 FY25), partly due to Q4 seasonality (historically strong in Q3, softer in Q4) and partly due to the order-execution timing mismatch noted above. The full-year EBITDA margin fell from 21% (FY25) to 14% (FY26), a sharp 700 bps drop driven by the operating deceleration plus a jump in “Other Expenses” (₹496 Cr in FY26 vs ₹48 Cr in FY25, largely ₹775 Cr in acquisition costs and ₹64 Cr in labour code adjustments, partially offset by other income).

Stripping out exceptional items: normalized EBITDA would be ₹1,006 Cr (₹231m operating profit + ₹775m exceptional), a 22% margin, which aligns with management guidance of ~21–22% normalized blended EBITDA margin (consumables at ~25%, equipment at 12–13%).

Other income jumped to ₹88 Cr in FY26 (from ₹48 Cr in FY25)—this includes mark-to-market gains, finance costs, and miscellaneous items unrelated to core operations.

From the concall (June 2, 2026):

Management reiterated normalized EBITDA margin guidance of ~21–22%. Consumables orders “came in February and March,” pushing execution into Q1/Q2 FY27. A “significant disruption” in logistics—vessel connectivity, container availability—increased finished goods inventory by ~₹50 Cr, representing “₹100 Cr of additional revenue” once shipped. Execution of bespoke mill liners typically takes 3–6 months post-order.

Equipment guidance for FY27: ~25% growth, with EBITDA margin capped at 12–13% (management explicitly rejected 14% as a baseline, flagging execution and project-mix risk).

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 91.5x trailing earnings for Tega (using ₹19.0 EPS annualized), against a 5-year historical average of 45x. This reflects a doubling of the multiple, even as ROE and ROCE have compressed—a pricing pattern at odds with the underlying returns narrative.

EV/EBITDA sits at 35.5x, substantially above peer median (12–15x for industrial products companies), signaling the market is pricing in either a significant earnings accretion story (Molycop synergies) or a longer-duration narrative around mining cycle recovery and geographic expansion.

The company’s own 5-year average ROE stands at 13%, but recent ROE has fallen to 5.94% (FY26), reflecting the capital raise (₹1,713 Cr in new equity for Molycop)