1. At a Glance – The Comeback Quarter Nobody Expected
Everest Kanto Cylinder Ltd (EKC) is currently trading at ₹120 with a market cap of ₹1,352 crore. In the last 3 months, the stock is down -0.97%, and over 1 year it has corrected -7.41%. Meanwhile, the business just delivered Q3 FY26 consolidated PAT of ₹35.7 crore, up 98.9% YoY.
Let that sink in.
Revenue stood at ₹365.1 crore (flat YoY), EBITDA at ₹59.2 crore (up 48.4%), and EBITDA margin expanded to 16.2% from 10.9%. EPS came in at ₹3.18 for the quarter.
The stock trades at:
- P/E: 11.4
- Price to Book: 1.05
- EV/EBITDA: 6.57
- ROCE: 11.8%
- Debt to Equity: 0.15
- Earnings Yield: 11.9%
Industry P/E is 29.2.
So here’s the spicy question: Why is the market valuing Asia’s largest high-pressure cylinder manufacturer like it sells plastic buckets?
Let’s investigate.
2. Introduction – From Bankruptcy Hangover to Clean Energy Hype
Everest Kanto Cylinder has been around since 1978. That’s before half of India knew what CNG was.
But this company has had drama.
There were years of losses, debt stress, tax orders, penalties, restructuring, and then a recovery. The five-year profit growth stands at 90.5%, but three-year profit growth is negative at -26.6%. This is not a smooth ride. This is a Bollywood plot.
Now in Q3 FY26, the company posts:
- PAT up 98.9% YoY
- PBT up 97% YoY
- Margin expansion of 534 bps
Suddenly, the cylinder business looks like a margin machine.
But wait.
There’s GST litigation of ₹1,267.22 crore (they plan to appeal).
There’s a 1% penalty of ₹11.29 crore from KASEZ.
There was a ₹3.1 crore exceptional loss this quarter due to new labour codes.
So yes, it’s profitable.
Yes, margins are expanding.
But it’s not a boring FMCG stock. It’s industrial, cyclical, policy-sensitive, and occasionally spicy.
Are we looking at a turnaround maturing… or a temporary margin spike?
3. Business Model – WTF Do They Even Do?
Ever seen those big red cylinders at CNG stations?
That’s them.
Everest Kanto manufactures high-pressure seamless gas cylinders used for:
- CNG storage
- Medical oxygen
- Industrial gases
- Fire extinguishers
- Hydrogen cylinders
- Aluminum cylinders
- Jumbo cylinders
They serve:
- City Gas Distribution companies
- CNG vehicle manufacturers
- OEMs like Bajaj Auto, Tata Motors, Ashok Leyland, M&M
- Oil companies like HPCL, IOCL
- Adani Gas, Torrent Gas
Geographical split (9M FY25):
- India: 63.52%
- UAE: 11.38%
- USA & Hungary: 25.10%
So this is not just a Tarapur factory story. It’s global.
Manufacturing footprint:
- India: Tarapur & Kandla SEZ
- Dubai facility
- Pittsburgh, USA
- Upcoming Egypt facility (commercial production expected May 2026)
