Gala Precision Engineering Ltd Q4 FY26 Earnings Analysis

- Current year revenue growth expected to be around 28%. - For the next 2 to 3 years, management aims to maintain a growth guidance of 20% to 25% annually. - Growth driven by expanding market share and wallet share with existing customers. - Addition of new products and customers globally, especially in Europe, US, and India. - Focus sectors for growth: industrial, renewable energy, and mobility. - Order book currently at around Rs. 85 crores with expected 20% to 25% growth rate in order inflow. - Capacity expansions like Phase 2 of Chennai plant (starting Q1 FY27) to support volume growth. - Strong momentum expected in renewable energy segment, especially wind turbine fasteners with a target market share of 15% to 20% in India over 2-3 years. - Export revenue expected to remain steady around 35-40%, mainly from Europe and US.

- The company expects revenue growth of around 28% for the current financial year. - For the next 2-3 years, management aims to maintain a growth guidance of 20% to 25% annually. - Profitability in Q3 was impacted by one-time items totaling Rs. 1.64 crores but margins are expected to normalize. - EBITDA margins are projected to sustain between 17% to 19% going forward. - The company targets expanding wallet share with existing customers and adding new customers, especially in industrial, renewable, and mobility sectors. - There is a focus on scaling operations at new facilities, like the Chennai plant phase two starting Q1 FY27, which will support revenue growth. - Market share in wind turbine fasteners in India is expected to grow to around 15%-20% in 2-3 years. - Overall, Gala Precision Engineering projects steady and strong growth in earnings and operating profits with expanding margins.

- Gala Precision is developing a 1.8 MW solar power plant (under open access model) for captive consumption to reduce power costs and move toward carbon-neutral power. Total CAPEX estimated at approx. Rs. 6.2 crore, including one-time statutory approvals. Purchase order and technical consultant already appointed. (Page 4) - Migration to SAP HANA planned in FY 2027 with a five-year license agreement costing Rs. 3.48 crore payable over five years. Implementation expected to start in Q1 FY’27 and go live by Q3 FY’27. (Page 4) - Phase two expansion of Chennai plant expected to commence in Q1 FY’27 to increase capacity as phase one is near peak utilization. (Page 5) - Phase two of Chennai expansion CAPEX estimated at Rs. 9-10 crore, planned in IPO. (Page 11) - Potential land acquisition (5-10 acres) near Wada planned for future capacity expansion, pending finalization. (Page 11)

- Currently, Gala Precision Engineering is funding its projects, such as the 1.8 MW solar power plant, through bank borrowing. - The solar project has required a total CAPEX of approximately Rs. 6.2 crore, including statutory approvals. - There is no explicit mention of any new fundraising plans through equity or large-scale debt beyond ongoing bank borrowings for specific projects. - The company is in the process of migrating to SAP HANA with a five-year license agreement costing Rs. 3.48 crore, planned to be financed through subscriptions, not indicating external fundraising. - No other immediate plans for new debt or equity fundraising were indicated in the call transcript.

- Current order book stands at around Rs. 85 crores as of the date of the call. - Orders come regularly and are supported by 3 to 6 months forecast and firm demand from OEMs and tier 1 companies. - The order book is expected to grow at a rate aligned with projected revenue growth of 20% to 25% for the next year. - No specific pending orders mentioned, but steady growth in order inflow is anticipated.