Classification of NuWays AG to INDUS Holding AG

Company Name:	INDUS Holding AG
ISIN:	DE0006200108
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 37
Target price on sight of:	12 months
Last rating change:
Analyst:	Sarah Hellemann

INDUS kicks off FY26 with a strong Q1 and raised guidance

Yesterday, INDUS released its Q1 report, following the release of preliminary revenue and adj. EBITA on April 30th. Key details from this strong Q1-release:

Kicking off the year with a strong Q1 performance, Q1 revenue grew by 9.4% yoy to € 442m, driven by improvements across segments. Inorganic growth contributed 2.2% yoy. The adj. EBITA rose by 70.7% yoy to € 42.5m, with the adj. EBITA margin increasing by 3.4pp yoy. Due to BETEK's successful management of the price increase in tungsten carbide as a key raw material, Material Solutions showed significantly elevated margins.

Material Solutions adj. EBITA margin came in hiked by 7.9pp yoy to 16.8% (eNuW: 14.7%) through positive pricing and volume developments in BETEK (51% of Material Solutions revenue in FY25). This clearly underlines once again BETEK's proactive and dynamic management of the special situation concerning tungsten. Not only has it established sufficient supply, despite significant elevation of cost. Backed by the holding, it is seizing the opportunity to gain market share in tungsten-related products, as smaller competitors partially signal silent retreat. Segment revenue rose by 17.5% to € 168m (eNuw: € 174m) and adj. EBITA soared by 122% yoy to € 28.2m (eNuW: € 24.7m).

Engineering beat growth expectations with revenue of € 131m (eNuW: € 124m), up 6.1% yoy, based on stronger than anticipated organic growth of 2.3% yoy. Inorganic growth contributed + 3.8% yoy. The adj. EBITA margin reached only 3.9% (eNuW: 5.5%), impacted by seasonality and capacity utilization, leading to an adj. EBITA of € 5.1m (eNuW: € 6.8m), down 20.3% yoy.

Infrastructure beat bottom-line expectations. The adj. EBITA rose by 36% yoy to € 13.6m, due to cost optimization, efficiency gains and the successful repositioning of a portfolio company. Revenue grew by 6.1% yoy to € 143m (eNuW: € 144m) largely in line with expectations and supported by inorganic growth of 5.1% yoy from FY25 acquisitions.

The order backlog rose by 24.5% yoy to € 826m, supported by strong order intake, up 15.4% yoy to € 525m (book-to-bill ratio 1.19). This was mainly driven by growth in tungsten carbide-tipped wear tools supporting a 28.3% yoy increase in Material Solutions orders and strong demand for digital infrastructure products leading to a 25.5% yoy increase in Infrastructure orders. Engineering orders came in slightly lower by 3.8% yoy at € 165m, while maintaining a strong book-to-bill for the segment at 1.26x.

Working Capital increased by € 57.8m yoy, reflecting investments in inventory of c. € 68.5m yoy. C. € 48m (eNuW) of this should be related to higher tungsten-related material prices and risen tungsten purchase volume. Under current circumstances, we view increased procurement of tungsten at higher prices as essential to raising BETEK's market share against small competitors. While the pricing volatility could also pose risks of normalization, we view the demand for tungsten to remain high in the months to come. This investment into inventory has a strong negative impact on the Free Cash Flow, reported at € -74.1m, it is seen as an investment into stronger organic growth in BETEK for the short- to mid-term.

Starting strong into the year on a positive signal, the increased FY26 guidance reflects the expectation of solid underlying developments and a short-term catalyst from the tungsten special situation. FY26e revenue is anticipated at € 1.92 bn (eNuW), implying growth of 10.7% (eNuW). Adj. EBITA is seen to rise by 21.1% yoy to € 179m (eNuW), supported by a stronger topline, disciplined cost management, operational excellence improvements and inorganic first-time contributions. Over the course of the year, we expect the topline to strengthen, driven by positive price and volume effects from organic growth, seasonality and first-time revenue contributions from acquisitions announced so far. Confirming BUY at a PT of € 37.0, based on FCFY 26e.

You can download the research here: indus-holding-ag-2026-05-13-update-en-a74d9
For additional information visit our website: https://www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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