Financial Performance Highlights (Q4 FY26 and FY26)

The company reported its highest quarterly Profit After Tax (PAT) in approximately 14 years for Q4 FY26.

Q4 FY26 Standalone Financials (₹ Crore, except EPS and margins):

  • Revenue from Operations: ₹57.00 (vs. ₹50.27 in Q4 FY25)
  • Other Income: ₹2.24 (vs. ₹0.00 in Q4 FY25)
  • Total Income: ₹59.24 (vs. ₹58.14 in Q4 FY25)
  • EBITDA: ₹9.00 (vs. ₹5.55 in Q4 FY25)
  • EBITDA Margin: 15.2% (vs. 9.5% in Q4 FY25)
  • Depreciation: ₹2.64 (vs. ₹2.04 in Q4 FY25)
  • Finance Costs: ₹0.24 (vs. ₹2.06 in Q4 FY25)
  • Profit Before Tax (PBT): ₹6.13 (vs. ₹1.45 in Q4 FY25)
  • Tax Expense: ₹0.25 (vs. ₹0.42 in Q4 FY25)
  • Profit After Tax (PAT): ₹5.88 (vs. ₹1.03 in Q4 FY25)
  • PAT Margin: 9.9% (vs. 1.8% in Q4 FY25)
  • Basic EPS: ₹16.17 (vs. ₹2.83 in Q4 FY25)

FY26 Full Year Standalone Financials (₹ Crore, except EPS and margins):

  • Revenue from Operations: ₹234.64 (vs. ₹235.88 in FY25)
  • Other Income: ₹3.58 (vs. ₹3.27 in FY25)
  • Total Income: ₹238.22 (vs. ₹239.15 in FY25)
  • EBITDA: ₹31.58 (vs. ₹26.51 in FY25)
  • EBITDA Margin: 13.3% (vs. 11.1% in FY25)
  • Depreciation: ₹9.55 (vs. ₹7.87 in FY25)
  • Finance Costs: ₹7.66 (vs. ₹7.04 in FY25)
  • Profit Before Tax (PBT): ₹14.37 (up 23.8% YoY from ₹11.60 in FY25)
  • Tax Expense: ₹5.05 (vs. ₹3.29 in FY25)
  • Profit After Tax (PAT): ₹9.32 (vs. ₹8.31 in FY25) - highest profitability in ~14 years
  • PAT Margin: 3.9% (vs. 3.5% in FY25)
  • Basic EPS: ₹25.60 (vs. ₹22.86 in FY25)

Operational and Strategic Highlights

  • EBITDA Margin Expansion: Achieved a 15.2% margin in Q4, marking the second consecutive quarter above 15%. This was driven by exiting low-margin business, Vriddhi Council projects, plant engineering initiatives, improved material and power cost discipline, and operational stabilization.
  • Order Wins: Secured three major orders in Q4:
  • An OEM Wheel Hub contract worth approximately ₹20 Crore in annual revenue.
  • New business from SKF.
  • New business from Schaeffler.

All are scheduled to ramp up from Q1 FY27.

  • Business Mix Optimization: Phase 4 of this initiative is underway. The strategy involves:
  • Exiting unrelated, non-core product lines.
  • Reducing exposure to low-margin customers with credit risk.
  • Pruning low-volume, low-price export and legacy programs.
  • Reallocating resources and capex to core, high-volume customers.

Approximately ₹40 Crore of 'non-fit' business was phased out in FY26. OEM revenues increased to ₹37.3 Cr in Q4.

  • Capex and Assets: Property, Plant & Equipment (PPE) stood at ₹86.5 Cr (vs. ₹60.4 Cr in FY25). Capital Work in Progress (CWIP) was ₹10.3 Cr. A reclassification moved ₹10 Cr of Dies and Tooling from inventory to fixed assets to align with industry benchmarks and improve inventory management. The Fixed Asset Turnover ratio is 3.5x, compared to an industry average of 1.5–2x. The capex strategy for FY27 has a 60% allocation to future growth areas (Driveline and Axle).
  • Working Capital: Inventory was rationalized by ₹21.7 Cr, reducing from ₹57.2 Cr to ₹35.5 Cr, leading to meaningful working capital improvement.
  • ROCE and CCC: Return on Capital Employed (ROCE) improved from 14% in Q1 FY26 to 18% in Q4 FY26. The Cash Conversion Cycle (CCC) peaked in Q2 FY26 and has started to improve sequentially.
  • FY27 Focus: The company's focus for the coming year is on profitable growth, CCC reduction, ROCE improvement, and sustaining EBITDA margins of 15% or higher.

Sales and Business Development

  • Product Groups: Sales are categorized into Driveline and Axle. The product mix remained stable, with core business growth focused on OEMs. The domestic Passenger Vehicle (PV) business experienced increased demand.
  • Segments: The company saw strong growth in Passenger Cars, Trucks, and the Agro segments. Sales in the 'Other' segment are on a downward trend, in line with strategic exit plans.
  • Geography: Core exports business is growing, while legacy 'non-fit' export business has been reduced.
  • Business Development: The company highlighted its unique position as the only forging company offering a combination of Engine, Driveline, and Axle components to OEMs, leveraging both Hot and Warm forging technologies. It received additional business allocation from top customers for its core engine business.

Corporate Overview

  • Company Stats: Established in 1978 (approx. 50 years in industry). Publicly listed on NSE (KALYANIFRG) and BSE (513509). Workforce headcount is 1,000+. Located in Pune, Maharashtra, India (190km from Mumbai sea port). Operates 5 plants: Hot Forging Division HFD1, HFD2; Machined Components Division MCD1, MCD2; Cold and Warm Forging Division MFD.
  • Diversification: The company serves Trucks, Cars, Industrial, and Agro markets, leveraging expertise in automotive standards to differentiate from competitors and hedge against cyclicality.
  • Leadership: The Board of Directors includes:
  • Rohini Kalyani (Executive Chairperson)
  • Viraj Kalyani (Managing Director)
  • Gaurishankar N. Kalyani (Director)
  • Ajay Tandon (Independent Director)
  • Jeevan Mahaldar (Independent Director)
  • V. Swaminathan (Independent Director)

The board is described as having deep experience, automotive and manufacturing domain knowledge, global exposure, and strong strategic skills.

  • Milestones: Key historical milestones include founding in 1979 by Dr. Neelkanth Kalyani, an IPO, developing the 1st Fracture Split Conrod in India, forays into Passenger Car and Truck segments, establishing warm forging (1st in India), and recent initiatives like launching a Wheel Hub business and a Digital Shopfloor project.

Forward-Looking Statements

The presentation contained forward-looking statements regarding the company's outlook, strategies, and expectations. These statements are subject to risks including economic conditions, fluctuating demand, government regulations, competitive pressures, raw material price volatility, and foreign exchange fluctuations. The company assumes no obligation to update these statements.