Markolines Pavement Technologies Limited Stock Analysis

Revenue momentum accelerated with consolidated 9M revenue at Rs 24,334 lacs (up 28% YoY from Rs 18,592 lacs), indicating strong order book execution across infrastructure segments / Profitability expansion evident with consolidated 9M PAT at Rs 1,487 lacs (up 43% YoY from Rs 1,043 lacs) and PAT margin improving to 6.1% from 5.5% YoY / Working capital efficiency improved dramatically with inventory reduction of Rs 2,437 lacs in 9M FY2026 versus inventory build-up of Rs 264 lacs in 9M FY2025, releasing cash for operations / Associate contribution strengthened with Uniqueuhpc Markolines LLP generating Rs 214 lacs profit in 9M (up 64% from Rs 34 lacs YoY), validating diversification strategy / Specialised Construction segment delivered exceptional performance with 9M revenue at Rs 8,407 lacs (up 78% YoY from Rs 4,725 lacs) and segment profit at Rs 1,983 lacs (up 86% YoY) / Tax efficiency improved with effective tax rate at 27.7% in Q3 versus 32.8% in 9M, aided by Rs 31.8 lacs earlier year tax reversal

Other expenses spiked dramatically to Rs 6,094 lacs in Q3 consolidated (versus Rs 3,302 lacs in Q3 FY2025), representing 65.5% of revenue and compressing margins despite revenue growth / Unallocated segment recorded persistent losses of Rs 558 lacs in Q3 and Rs 1,548 lacs in 9M, indicating overhead burden or corporate costs not fully absorbed by operating segments / Finance costs remained elevated at Rs 425 lacs for 9M despite inventory reduction, suggesting ongoing debt servicing requirements that limit cash flow flexibility / Material consumption volatility evident with Q3 at Rs 1,105 lacs versus Q2 at Rs 2,606 lacs, creating margin unpredictability tied to project mix and procurement timing / Subsidiary joint venture Markolines Evrascon JV reported loss of Rs 23.7 lacs in 9M FY2026, indicating execution challenges in certain partnerships / Exceptional item of Rs 16.2 lacs for labor code impact in Q3 signals ongoing regulatory compliance costs that may recur or expand in future quarters

Standalone 9M revenue rose 24.2% YoY to Rs 23,085.27 lakh (from Rs 18,591.82 lakh), indicating strong growth traction. / Standalone 9M PAT increased 42.6% YoY to Rs 1,486.75 lakh (from Rs 1,042.68 lakh), materially faster than revenue growth. / Q3 standalone profitability improved with PBT at Rs 864.34 lakh vs Rs 741.07 lakh YoY (+16.6%); PBT margin expanded to about 10.5% from about 9.0%. / Standalone Q3 EPS improved to Rs 3.22 from Rs 2.86 YoY, and 9M EPS rose to Rs 6.75 from Rs 4.67. / Segment mix remains supportive: Standalone Specialised Construction 9M revenue jumped to Rs 8,407.25 lakh from Rs 4,725.00 lakh (~77.9% YoY), while MMR stayed large at Rs 14,678.02 lakh.

Revenue growth quality in Q3 is modest on standalone basis: Rs 8,046.45 lakh vs Rs 8,006.21 lakh YoY (+0.5%), implying dependence on margin/cost swings for earnings growth. / Cost structure is volatile: 'Changes in inventories' moved from -Rs 2,500.00 lakh in Q2FY26 to +Rs 636.56 lakh in Q3FY26, which can distort quarter-to-quarter profitability. / Other expenses are elevated at Rs 4,851.25 lakh in Q3 (vs Rs 3,301.86 lakh YoY, +46.9%), and consolidated other expenses are Rs 6,093.72 lakh, pressuring operating leverage. / Finance costs increased YoY in Q3 standalone to Rs 131.07 lakh from Rs 85.94 lakh (+52.5%), indicating higher funding burden despite sequential easing. / Disclosure risk remains: trade receivables/payables/loans-advances are 'subject to balance confirmations,' and part of consolidated JV/associate numbers were management-certified rather than fully reviewed.