Kalyani Forge Q2 PAT Up 86.7% YoY, Approves ₹45 Cr Funding

Kalyani Forge Limited – Investor Presentation Summary

Key Operational Highlights

• H1 FY27 PBT ₹9.39 Cr, up 118.8% YoY; PAT ₹6.64 Cr (+86.7% YoY); EPS ₹18.25
• Q2 FY27 PBT ₹3.24 Cr (+42.9% YoY); PAT ₹2.16 Cr; EPS ₹5.94
• Fourth consecutive quarter with EBITDA margin above 14%; Q2 EBITDA margin 14.2% (up 158 bps YoY)
• H1 FY27 EBITDA margin 15.3% vs 11.1% in H1 FY26 (420 bps expansion); H1 EBITDA up 38.8% to ₹18.67 Cr
• Planned transitions absorbed in Q2: two-month reconditioning of 2500T press and relocation of driveline machining plant to MCD1 cut sequential revenue to ₹54.4 Cr (−18.5%)
• Receivables increased due to remittances delayed during banking changeover and slower legacy last-time-buy lifting
• Collections and export credit lines being normalized
• ROCE: 13% on annualized Q2 earnings; H1 annualized ROCE 17%
• H1 FY27 PAT margin 5.5%, up from 3.0% in H1 FY26

Key drivers of operational performance: Cost optimization, Vriddhi Council initiatives, improved operating efficiency, business mix optimization toward higher-growth, better-margin programs

Segment-wise Performance

• Engine: ₹40 Cr in Q2 FY27, up 46% YoY and steady sequentially (−2%) despite 2500T press reconditioning; now 73% of sales (vs 55% a year ago)
• Axle: ₹5.9 Cr in Q2 FY27, up 16% YoY; now 11% of sales; lower sequentially due to 2500T planned reconditioning
• Driveline: ₹6.6 Cr in Q2 FY27; moderated due to low volume parts consolidation and machining plant relocation from MCD3 to MCD1 with 2 months production disruption
• Legacy non-fit business cut from 15% to 4% of sales; core Engine, Driveline and Axle groups now make up 96% of business

Explanation of significant changes in segment performance: Growth in Trucks segment driven by strong OEM demand; planned transitions temporarily affected Axle and Driveline segments

Financial Highlights

Revenue: Not specified for Q2 (implied ₹54.4 Cr sequential)

EBITDA: H1 FY27 ₹18.67 Cr (+38.8% YoY)

PAT: H1 FY27 ₹6.64 Cr (+86.7% YoY); Q2 FY27 ₹2.16 Cr

EPS: H1 FY27 ₹18.25; Q2 FY27 ₹5.94

Margins: H1 FY27 EBITDA margin 15.3%; Q2 FY27 EBITDA margin 14.2%; H1 FY27 PAT margin 5.5%

YoY/QoQ comparison: Q2 revenue down 18.5% sequentially; all profitability metrics showing strong YoY improvement

Drivers of financial performance: Higher margin business mix, cost optimization initiatives, operational efficiencies

Comparison to market estimates: Not specified

Key Risks: Economic conditions in India and globally, fluctuating demand in key industries, government regulations and policies, customer preference shifts, competitive pressures, raw material price volatility, foreign exchange fluctuations, technological adaptation challenges

Geographical Revenue Split

Domestic vs Export/Regional Revenue:

• Exports: ₹7.6 Cr in Q2 FY27 (14% of sales), broadly in line with 15% a year ago
• Domestic: Implied ₹46.8 Cr (86% of sales)

Regional Breakdown: Not specified

Balance Sheet Snapshot

Net Debt/Equity: Not specified

Reserves: Not specified

Current Assets/Liabilities: Not specified

Working Capital/Leverage Metrics: Cash Conversion Cycle increased to 231 days in Q2 FY27 from 148 days in Q1 FY27; Debt to EBITDA ratio not specified

Financial Health Insights: Board-approved ₹45 Cr funding plan to strengthen liquidity; collections and bank facilities being normalized

Capex & Cash Flow Health

Capital Expenditure: FY27 capex plan ₹30 Cr; ₹8.0 Cr deployed in H1 FY27 (Q1 ₹6.9 Cr, Q2 ₹1.1 Cr)

Free Cash Flow: Not specified

Operating Cash Flow: Not specified

Net Debt Movement: Not specified

Investment Rationale: Ramp-up programs ₹10 Cr, new business ₹10 Cr, future business ₹5 Cr, existing business ₹5 Cr; focused on CV OEM ramp-up programs and machining de-bottlenecking

Strategic & R&D Initiatives

Investments in Innovation: Machining capacity expansion (conrod machining capacity increased by 10%), new wheel hub line installed (up to 30% planned capacity), large engine conrod start of production for AI data center application, digital shopfloor project with Kalyani Studio

Expected impact on growth: New engine and wheel hub orders (~₹20 Cr annual) ramping up; long-term industrial and defense product roadmap initiated for high-volume applications

Strategic Rationale: Focus on top 20 high value customers; capacity allocation prioritized for high-volume business; engineering effort focused on core business; expanding into higher-growth markets

Industry Trends & Business Environment

Macro/Industry Trends: Rising demand in trucks segment; growth in automotive, agriculture, and industrial equipment sectors

Impact on Company: Driving shift toward higher-growth, better-margin programs; creating opportunities for capacity expansion and new order wins

Management Commentary & Growth Outlook

Strategic Outlook: H2 priorities include CV OEM ramp-up programs and machining de-bottlenecking; recovery on track with press and MCD lines back in operation

FY Guidance: Not explicitly provided

Market Share Targets: Not specified

Risks and Opportunities: Economic conditions, demand fluctuations, regulatory changes, competitive pressures, raw material volatility, foreign exchange fluctuations, technological adaptation challenges highlighted in safe harbor statement