OBSC Perfection Ltd Q1 FY26 Earnings Analysis

- FY26 automotive revenue expected to be ~80-85% of total, with 25% from EVs and 60% from non-EV vehicles. - Non-automotive sectors (defense, marine, aerospace) projected to grow rapidly, expecting 35% revenue share in 2-3 years, with defense and marine growing at 45-50% CAGR. - Order book as of FY25 is Rs.722-725 crores, significantly up from Rs.290 crores in FY24, indicating strong upcoming revenue. - Defense order book of Rs.130 crores extends over 10 years with monthly revenue run rate ~Rs.1 crore. - Capacity expansions (new plants in Pune and Gujarat) will support revenue growth; with installed capacity enabling Rs.200+ crores revenue currently and further CAPEX in pipeline. - Expectation of over 40% growth in FY26 based on new orders, product segments, and customer additions (e.g., Tata AutoComp becoming a major customer). - Shift from ~98-99% automotive two years ago to expected ~65% automotive by FY28, highlighting diversification and volume growth in non-automotive sectors.

- OBSC Perfection expects over 40% growth in revenue for FY26 driven by automotive and non-automotive expansion. - EBITDA margin target is to improve by 2% in FY26, with a medium-term aspiration of 4-5% margin expansion over 3-4 years. - Defense and marine segments are expected to grow at 40-50% CAGR, contributing to higher margin and revenue mix diversification. - Order book of Rs.700+ crores provides strong revenue visibility for 6-7 years. - ROE is expected to recover to around 40% in 2-3 years after IPO-related equity dilution. - New facilities and CAPEX in forging and machining are expected to enhance operating leverage and profitability. - Enhanced in-house R&D and process expansions will contribute to margin improvement and faster customer onboarding. - Overall, strategic diversification into defense, marine, and EV sectors is expected to drive earnings and EPS growth sustainably.

- A new forging facility has been opened in Pune in April 2025, with machine lines ordered and expected to be operational in the next three months. - Rs.20 crores of IPO proceeds remain unutilized; Rs.15 crores allocated for CAPEX at the third facility in Chennai and Rs.5 crores for the fourth facility in Pune. - Additional CAPEX of Rs.20 crores allocated, with further CAPEX planned for forging, which has high asset turnover and lower machinery requirement compared to machining. - New machining capacity of approximately Rs.200+ crores revenue potential with current and upcoming infrastructure. - Expansion plans include a dedicated plant for shock absorber rods in Sanand for commercial and electric vehicles. - Long-term vision to consolidate plants into a single integrated "giga factory" with multiple processes in-house on 5-6 acres. - In-house R&D investments and new software/tools aim to reduce costs, improve turnaround, and support capacity and product expansion.

- As of the latest update, OBSC Perfection has Rs.20 crores of unutilized IPO proceeds lying in their bank accounts. - These funds are planned to be utilized for CAPEX in existing and new facilities during the current financial year. - There is no mention of any new fundraising through equity or debt in the transcript. - The company is focused on using existing resources and CAPEX plans to support growth, including expansion of machining and forging capabilities. - No explicit plans for additional debt or equity fundraising were disclosed during the call.

- Current confirmed order book stands at approximately Rs. 723-725 crores as of FY25. - In FY24, the order book was around Rs. 290 crores. - There is an extended defense order book of Rs. 130 crores spanning 10 years (~Rs. 13 crores revenue per year). - The rest of the order book (excluding defense) is expected to be executed over the next 5 years. - Overall, the order book represents new projects/orders above and beyond current revenues. - A nomination-based order book totaling about Rs. 750 crores is treated as confirmed due to binding nomination letters with customers. - Additional pipeline RFQs and validation parts, especially in defense and overseas markets like Israel, indicate potential large future orders. - The company expects strong order wins contributing to over 40% growth in FY26.