Key Financial Performance (FY2026)

Revenue: ₹319.6 Crores, representing a growth of 66% over FY2025 (₹192.4 Crores).

H2 FY2026 Revenue: ₹229.1 Crores, reflecting a growth of 114% over H2 FY2025 (₹107.3 Crores).

EBITDA: ₹64.2 Crores, with a margin of 20.1%.

Profit After Tax (PAT): ₹39.1 Crores, representing growth of 52% YoY, with a PAT margin of 12.2%.

Return on Equity (ROE): 22.4%

Return on Capital Employed (ROCE): 24.9%

Operational & Strategic Highlights

Business Model Evolution: The company is transforming from a component supplier to an integrated engineering and manufacturing platform, executing complete interiors, assemblies, and turnkey projects.

Growth Drivers: Key drivers include Vande Bharat trains, Amrit Bharat trains, metro rail projects, EMUs, refurbishment programs, and border modernization initiatives.

Defence & Aerospace Segment: FY2026 was a foundational year. A joint venture with Big Bang Boom Solutions is expected to be formally incorporated by June 15, 2026. The JV will focus on autonomous drones and high-power microwave laser systems for defence. Airfloa will invest ₹25 Crores in the JV, which will hold the technology, while manufacturing rights will be granted to Airfloa.

Order Book & Pipeline: As of May 2026, the unexecuted order book stood at ₹486.9 Crores. The active bid pipeline is approximately ₹1,200 Crores, with a historical bid-win ratio of 20-25%. Of the ₹1,200 Cr pipeline, ~₹900 Cr is from Indian Railways, ~₹120 Cr from metros, and ~₹60-70 Cr from HAL for defence.

Capacity & Expansion: Capacity utilization is at 90%. The company is developing a new 14-acre integrated manufacturing facility, with a planned capex of ₹30-35 Cr in FY2027. This will add 50,000 to 1 lakh square feet of space initially, with a long-term plan to expand to 3-4 lakh square feet.

Channel Partner Model: To efficiently cater to zonal railway contracts across India without heavy capex, the company is creating a network of channel partners. This model is expected to improve profitability and working capital efficiency by saving on EMD, BG, PBG, security deposits, and infrastructure overheads.

Margins & Cost Structure

Margin Pressure: EBITDA margin declined from 25% (implied from context) to 20.1% primarily due to significant raw material inflation. Aluminium prices increased by over 80% and stainless steel by 60-65% YoY. Price variation clauses in contracts offset only 50-60% of these losses.

Other Expenses: Increased due to higher CSR expenditure, bill discounting charges, and foreign exchange-related costs from procurement and commodity volatility.

Finance Cost: Declined despite scale-up due to lower processing costs, repayment of facilities, reduced delayed payment charges, and supplier management.

Working Capital & Leverage

Trade Receivables: Stood at ₹214 Crores as of March 31, 2026, elevated due to heavy execution in March. Collections post-year-end have been encouraging, with 20% collected by May-end and an expectation of 70% collection by end-June 2026.

Inventory & Receivable Days: Receivable days improved by 24 days; inventory days improved by 48 days.

Other Current Assets: Increased due to advance payments made to suppliers to secure material availability.

Net Debt-to-Equity: Remained comfortable at 0.2x as of March 31, 2026.

Funding for Growth: The company has tied up for debt funding of ₹120 Crores (₹60 Cr already sanctioned, another ₹60 Cr expected by June 30, 2026) at an interest rate of 8.25%. No equity raise is planned for FY2027.

Guidance & Outlook

FY2027 Guidance: Revenue target of approximately ₹500 Crores with PAT margins maintained in the range of 12% to 13%.

Medium-Term Target: The aspiration to achieve ₹1,000 Crores in revenue has been extended modestly due to a disciplined approach to bidding (avoiding low-margin projects) and commodity volatility. The company remains confident in the long-term opportunity.

R&D Spend: Planned R&D expenditure is expected to increase to 8-9% of sales in FY2027 (from ~4% in FY2026), predominantly focused on defence and aerospace projects and the new flexible electronics subsidiary.

Subsidiary Update

A subsidiary has been formed to develop electroluminescent dynamic display boards and flexible electronics for railway signage, aerospace, and space applications. Commercial revenue from this venture is expected in FY2027.

Q&A Session Key Takeaways

Working Capital: Management aims to reduce the receivable cycle to 60-70 days (from 90-95 days) within 3-4 months.

Revenue Coverage for FY2027: 70-75% of the ₹500 Cr guidance is covered by the existing order book, with the remainder expected from new wins from the ₹1,200 Cr pipeline.

Defence Revenue: The current order book includes ₹29 Cr from defence, with an additional ₹60-70 Cr expected from HAL in FY2027.

Machinery Procurement: The procurement of high-precision machinery from China is delayed due to a new requirement for an end-user certificate from the Indian government. The company is considering alternative machinery suited for lightweight interior production.

Competition: Key competitors include Kineco, Hindustan Fiberglass Works, DTL Ancillaries, Vibgyor, Universal Engineers, and Tata (for seating segments).

Participants in the Call

Management: Mr. Venkatesan Dakshinamoorthy (MD), Mr. Manikandan Dakshinamoorthy (JMD), Mr. Venkatesan Sathishkumar (Director), Mr. Jay Manikandan (Financial Advisor), Mr. Haraprasad Rout (Company Secretary), Mr. Ragavendran V (Finance Manager).

Moderator: Mr. Rutul Shah (Atlas Capital).