Financial Performance Q1 FY27

  • Consolidated revenue from operations: ₹75 crore, representing 20% year-on-year growth
  • EBITDA: ₹12 crore, up 28% year-on-year
  • EBITDA margins: 16.51%
  • Net profit: ₹8 crore, representing 29% year-on-year growth
  • PAT margins: 11.44%

Operational Highlights

Business Overview: Gala Precision is a manufacturer of high-quality precision components serving renewable energy, industrial, and mobility sectors. The company supplies to Tier 1 OEM and channel partners across 25 countries with over 800 SKUs serving 175 active global customers.

Segmental Performance Q1 FY27:

  • Disc Springs (DSS) business: Sales grew 31% year-on-year, contributing 54% of revenue
  • Special Fasteners (SFS): Revenue of ₹223 million (29% of total revenue)
  • Coil Springs (CSS): Revenue of ₹125 million (17% of total revenue)

Order Booking:

  • Order booking growth of approximately 40% year-on-year
  • Order book as of July 1, 2026: Approximately ₹110 crores (compared to ₹80-85 crores same period last year)
  • First bulk commercial order secured from one of India's leading electrolyzer manufacturers

Capacity Expansion and Facilities

Chennai Facility:

  • New fastener manufacturing facility with installed capacity of 4,600 metric tons
  • Successfully commissioned and productionized new hot-dip galvanized plant
  • Current monthly production run rate: ₹4-5 crores
  • Phase 1 capacity utilization: 70-80% in Q1, expected to reach 80-90% in Q2
  • Phase 2 construction: 10,000 sq ft mezzanine floor expected completion in Q2, operational in Q3

Wada Expansion:

  • Signed MoU for acquisition of 10.15 acres of land adjacent to existing facility
  • Land acquisition under due diligence, expected to complete in 2-3 months
  • Planned construction: Approximately 50,000 sq ft factory shed
  • Capex plan: ₹40-45 crores, majority expenditure expected in next financial year

Strategic Initiatives

  • Appointed KPMG for comprehensive working capital optimization study (initiated in July, report expected by August end or Q2)
  • Working capital days currently at approximately 180 days (FY26 level)
  • Successfully completed development of bolt for industrial construction equipment applications
  • Seatbelt retractor spring approved by European customer after testing and audit, pilot orders expected

Guidance and Outlook

Revenue: Maintain 20-25% year-on-year growth guidance for FY27

Margins:

  • EBITDA margin guidance maintained at 17-19% for FY27
  • Expected drivers for margin improvement: Optimal utilization of Chennai facility (Q3-Q4), revenue growth improving fixed overhead absorption

Tax Rate: Effective tax rate expected around 20% or lower (FY26 rate: 18.5-19%) due to:

  • Deductions under Section 35(1)(i) for new product development expenditure
  • ESOP perquisite value deductions
  • Higher depreciation benefits
  • Solar project commissioning in Q3 providing additional tax benefits

Foreign Exchange Management

  • Reduced forward cover from 70% to 40% of estimated export collections
  • Decision based on currency volatility, consultant advice, and expectation of rupee weakening
  • Coverage primarily on EUR and USD exports
  • Current hedging strategy covering 12-month period at approximately 4%

Market and Product Development

Fastener Business:

  • Wind turbine fastener contribution: 25-26% of total sales in Q1
  • Offshore wind fastener products expected to reach 10% of total fastener sales by FY27 end
  • Kitting solutions contribute 15-17% of sales
  • Addressable market: USD 2.5 billion globally

Customer Base:

  • 85% products customized to customer specifications
  • 15% sold to fastener distributors
  • Direct billing to OEMs including Vestas, ABB, Siemens, Schaeffler, John Deere
  • Typical customer approval process takes 12-24 months

Competitive Position:

  • 10-20% cost advantage compared to European competitors
  • 3-4% cost of fasteners in wind turbine total cost
  • Focus on customized, special requirement products rather than commodity items

Q&A Session Highlights

  • Chennai facility expected to reach EBITDA comparability with Wada operations in Q4 or next year Q1
  • HDG plant commissioning expected to improve margins, delivery efficiency, and attract new customers
  • Bolt production ramp-up proceeding as planned
  • Cross-selling opportunities exist between disc spring customers and fastener/wedge lock washer products
  • New products contribute 30-35% of order book