Mixed: FY26 annual results showed robust 19.9% revenue growth and 27% PAT growth, but Q4 FY26 revenue declined 2.3% YoY and EBITDA margin contracted 20bps, while net debt turned positive for the first time in two years. quarter Investor Presentation One-Pager? Jun 2026

Revenue

₹1,107.4 Cr

+19.9% YoY; Q4 fell 2.3% to ₹263.6 Cr

EBITDA Margin

27.0%

−20bps YoY; Q4 margin 22.7%, down from 27.8% last year

PAT

₹258.9 Cr

+27.0% YoY; Q4 PAT up 4.9% due to other income

Net Debt/Equity

0.02x

Reversed from (0.06)x net cash; net debt ₹37.7 Cr

What Went Right

FY26 revenue grew 19.9% to ₹1,107.4 Cr, driven by 19.3% EBITDA growth to ₹299.5 Cr.
PAT improved 27% to ₹258.9 Cr, with PAT margin expanding to 22.7% from 21.7%.
Defence/Aerospace/Railways revenue share rose to 13% of revenue (FY24: 5%) and 50% of order book, including a 5-year large-calibre ammunition MoU and first aerospace order.
Capacity expansion on track: forging capacity to increase from 100,000 to 150,000 MTPA; machining from 45,000 to 80,000 MTPA, with a new 360,000 shells/year line commercialized.
ICRA credit rating upgraded to [ICRA]A-(Stable) / A2+, reflecting improved financial profile.

What to Watch

Q4 FY26 revenue declined 2.3% YoY and 15.3% QoQ, indicating a sluggish quarter.
EBITDA margin in Q4 fell to 22.7% from 27.8% a year ago, under pressure from elevated raw material costs and perhaps product mix shifts.
Net debt turned positive at ₹37.7 Cr (FY25: net cash ₹60.3 Cr) as borrowings surged to ₹1,267 Mn from ₹359 Mn, largely to fund capex.
Working capital days jumped to 140 from 104, driven by a sharp increase in trade receivables (₹425 Cr vs ₹327 Cr) and inventories (₹145 Cr vs ₹98 Cr).
ROCE halved to 21.7% from 30.1% and ROE dropped to 19.6% from 25.4%, reflecting higher equity base and lower capital efficiency.

Management Guidance

Forging capacity to increase from 100,000 MTPA to 150,000 MTPA; machining capacity from 45,000 MTPA to 80,000 MTPA.
Defence, Aerospace & Railways targeted to become a larger share of revenue mix (currently 13% of revenue, 50% of order book).
ESG targets: 100% renewable energy by 2035, net zero emissions by 2040, zero liquid discharge by 2037.

Investor Lens

The FY26 results indicate strong annual growth but a weak Q4 exit, raising questions about near-term momentum. The sharp increase in borrowings and working capital days, alongside declining ROE/ROCE, suggest the company is investing heavily in capacity before revenue scales. The 50% order book share from defence/aerospace provides long-term visibility, but investors should watch Q1 FY27 cash conversion, margin recovery, and debt paydown. The 5-year ammunition MoU is a key catalyst, but execution risk remains given the nascent defence segment.

From investor presentation · AI-generated analysis · Not investment advice

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📊 MIXED Revenue dips 2% YoY, net profit up 5% aided by higher other income

Revenue

Revenue at ₹264 crore declined 2.2% YoY and 15.1% QoQ, indicating softening demand in the quarter.

Profitability

Net profit rose 4.8% YoY to ₹66 crore despite lower revenue, driven by other income of ₹23 crore and a low tax rate of 13%. EPS fell 5.4% YoY to ₹5.42 from ₹5.73.

Margins

Operating profit margin contracted sharply to 23% from 28% YoY and 27% QoQ, reflecting cost pressures and lower scale.

Balance Sheet

Borrowings stood at ₹152 crore against reserves of ₹1,473 crore, resulting in a low debt-to-equity ratio of 0.1. Total assets were ₹1,851 crore.

Key Risks

Declining revenue and operating margins signal weakening core business. High reliance on other income (38% of operating profit) poses sustainability risk. Further sales erosion could compress profitability.

Outlook

Continued revenue and margin trends suggest near-term pressure unless demand revives. The low leverage provides financial flexibility, but profit quality needs improvement beyond non-operating income.

Generated by AI · Mar 2026 results · Not investment advice

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