Company Overview

Frontier Springs Limited is a manufacturer established in 1981, producing hot coiled compression springs, air springs, and forging for wagons, railways, carriages and locomotives. The company's springs are used on Vande Bharat Express, India's fastest train. The company is IRIS (International Rail Industry Standard) certified, enabling direct exports. Has RDSO (Research Designs and Standards Organization) approval for spring-single coil for EMD locomotives. Operates two manufacturing facilities.

Business Divisions

Coil Springs Division: Manufacturing hot coiled springs for Indian Railways since 1991. Produces springs from 10 mm to 65 mm wire thickness with maximum height of 1,000 mm using chrome molly and chrome silicon steel rods.

Forging Division: Established in 2011, manufactures train parts including Anti Roll Bar Assembly, Screw Couplings, Draft Gear Assembly and BSS Hangers. Uses hammers of 1 tonne, 3 tonnes and 6 tonnes capacity for parts from 100 grams to 80 kg.

Air Spring Division: Produces Air Spring suspension systems for LHB coaches for Indian Railways. Signed MoU with Contitech Germany to supply Air Springs. Manufacturing plant started in 2022 with ongoing capital expenditure to enhance capacity.

Products

  • Air Springs for LHB coaches
  • Suspension Coil Springs for freight stock
  • Suspension Coil Springs for coaching stock
  • Suspension Coil Springs for diesel and electrical locomotives
  • Forging components: Block Hanger, Knuckle Thrower, TMCLH and VLH Coil Springs for power sector, Brake Top Follower and Wedge

Key Clients

  • Chittaranjan Locomotive Works
  • Banaras Locomotive Works
  • Frontier Alloy Steels Limited
  • Patiala Locomotive Works

Financial Highlights Q2FY27

Revenue from Operations: ₹99.73 crore, up 20.54% YoY from ₹82.74 crore in Q2FY26

Other Income: ₹0.12 crore vs ₹0.17 crore in Q2FY26 (-29.96%)

Total Income: ₹99.85 crore, up 20.43% YoY

Total Operating Expenses: ₹70.00 crore, up 15.38% YoY

EBITDA: ₹29.73 crore, up 34.69% YoY

EBITDA Margin: 29.81% vs 26.68% in Q2FY26 (313 bps improvement)

Finance Cost: ₹0.04 crore vs ₹0.06 crore in Q2FY26 (-31.40%)

Depreciation & Amortization: ₹1.30 crore vs ₹1.09 crore in Q2FY26 (+19.16%)

Profit Before Tax: ₹28.50 crore, up 35.19% YoY

Profit After Tax: ₹21.33 crore, up 35.79% YoY

Balance Sheet Position (as of latest)

Shareholders Fund: ₹218.67 crore

Non-Current Liabilities: ₹7.66 crore

Long Term Borrowings: ₹1.35 crore

Current Liabilities: ₹33.02 crore

Short Term Borrowings: ₹4.00 crore

Total Equity & Liabilities: ₹259.35 crore

Non-Current Assets: ₹143.08 crore

Net Block: ₹71.68 crore

Current Assets: ₹116.27 crore

Inventories: ₹37.96 crore

Trade Receivables: ₹42.97 crore

Cash & Bank Balances: ₹32.73 crore

Total Assets: ₹259.35 crore

Cash Flow Statement

Cash Flow from Operating Activities: ₹63.48 crore

Cash Flow from Investing Activities: (₹28.69) crore

Cash Flow from Financing Activities: (₹5.56) crore

Net Cash Flow: ₹29.22 crore

Cash at Beginning of Period: ₹3.50 crore

Cash at End of Period: ₹32.73 crore

Management Commentary

From Managing Director Kapil Bhatia:

  • Q2 growth partly from executing orders that could not be completed in Q1 due to raw material constraints from geopolitical situation
  • Expect to maintain current run-rate with strong demand across verticals and robust order position
  • Higher steel, oil and gas prices could pressure margins in coming quarters
  • Coil springs: tenders for 4,000 wagons finalized, driving next growth leg
  • Air springs: running at ~250 coach sets monthly with strong order book
  • Forging: growth driven by railways, taking automotive job work to improve capacity utilization
  • FIBA system received RDSO approval, trial order expected shortly (6-8 month trial period)
  • FY27 gross revenue expectation: at least ₹450 crore, working toward ₹500 crore guidance

Industry Context & Growth Opportunities

Indian Railways Initiatives:

  • ₹2.93 lakh crore capital allocation in Union Budget 2026-27 (10.5% above FY26 revised estimate)
  • Record freight performance: 1,670 MT in FY2025-26 (3.25% YoY increase)
  • Massive wagon orders: ~72,000 wagons placed, 40,000 more anticipated
  • 96.4% of Dedicated Freight Corridor commissioned, targeting logistics cost reduction from 15% to 8% of GDP by 2030
  • Private wagon ownership rising due to government schemes
  • Vande Bharat expansion: 136 trains incorporated (₹58,000 Cr opportunity)
  • Metro projects allocation: ₹31,239 Crores in budget
  • Freight target: 3,000 million tonnes by 2027 requiring ~500,000 wagons
  • Replacement cycle: ~35% of existing wagons older than 15 years due for replacement

Board of Directors

  • Mr. Kundan Lal Bhatia (Chairman cum Managing Director)
  • Mr. Kapil Bhatia (Managing Director)
  • Mrs. Manju Bhatia (Whole-time Director)
  • Mr. Neeraj Bhatia (CFO and Whole-time Director)
  • Mrs. Mamta Bhatia (Whole-time Director)
  • Mr. S. K. Luthra (Independent Director)
  • Mr. Sudhanshu Mani (Independent Director)
  • Mr. Kapil Kumar Agrawal (Additional Independent Director)
  • Mr. K. P. Somkuwar (Independent Director)
  • Mr. Surendrakumar Gupta (Independent Director)

Investment Rationale Presented

  • Robust balance sheet
  • Experienced management team
  • New product (Air Springs) to improve margin profile
  • Strong industry tailwinds and growth visibility
  • New product (Air Springs) to significantly contribute to topline growth